Time-Consistent Majority Rules and Heterogenous Preferences in Group Decision-Making
AbstractThis paper studies a collective decision problem in which a group of individuals with interdependent preferences vote whether or not to implement a public project of unknown value. A utilitarian social planner aggregates these votes according to a majority rule; but, unlike what is commonly assumed in the literature, the planner is unable to commit to the rule before votes are cast. Characterizing the time-consistent majority rules, we find that the ex ante optimal majority rule is time-consistent; but for groups whose members have sufficiently homogenous preferences, there is an ex ante suboptimal rule that is also time-consistent. Thus, in the absence of an ex ante commitment, the social planner prefers a relatively heterogeneous group in which strategic voting incentives are weak. This finding is in sharp contrast with the observation that under an exogenously given majority rule, the social planner prefers the most homogenous group. Applications to trial jury and advisory committee formations as well as academic hiring decisions are discussed.
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Bibliographic InfoPaper provided by Duke University, Department of Economics in its series Working Papers with number 10-76.
Date of creation: 2010
Date of revision:
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Postal: Department of Economics Duke University 213 Social Sciences Building Box 90097 Durham, NC 27708-0097
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time-consistency; majority rule; heterogeneity; group decision-making;
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- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- D7 - Microeconomics - - Analysis of Collective Decision-Making
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