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Group formation and governance

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  • Ludovic Renou

Abstract

This paper studies the impact of the governance of a group, whether be it unanimity, simple majority or qualified majority, on its size, composition, and inclination to change the status quo. Somewhat surprisingly, we show that not only unanimity might favor the formation of larger groups than majority, but also a change of status quo. This paper therefore suggests that unanimity, often blamed for the European inertia of the last two decades, was only a scapegoat.

Suggested Citation

  • Ludovic Renou, 2007. "Group formation and governance," Discussion Papers in Economics 07/07, Division of Economics, School of Business, University of Leicester.
    • Handle: RePEc:lec:leecon:07/7
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    Cited by:

    1. De Fraja, Gianni & Sákovics, József, 2012. "Exclusive nightclubs and lonely hearts columns: Non-monotone participation in optional intermediation," Journal of Economic Behavior & Organization, Elsevier, vol. 84(2), pages 618-632.
    2. Antonin Macé & Rafael Treibich, 2021. "Inducing Cooperation through Weighted Voting and Veto Power," American Economic Journal: Microeconomics, American Economic Association, vol. 13(3), pages 70-111, August.
    3. Ludovic Renou, 2008. "Multi-lender coalitions in costly state verification models," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 36(3), pages 407-433, September.

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    More about this item

    Keywords

    groups; coalitions; alliances; endogenous formation; cost reduction; loss of control; governance; unanimity; majority;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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