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Moral cost, commitment, and committee size

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  • Huck, Steffen
  • Konrad, Kai A.

Abstract

Consider a committee that in the past has made a promise not to confiscate the profits from a foreign investor. After the investment has taken place, there is a material benefit if the committee decides to default on the earlier promise. But there are also some small moral costs for those who vote in favor of default. We show that in such situations small committees are more likely to default than large committees. Thus, constituencies can decide about degrees of commitment by choosing committee sizes appropriately. Experimental data confirms our predictions. -- Untersucht wird das Entscheidungsverhalten eines Komitees, das als politische Instanz mit Mehrheitsentscheidung über die mögliche Beschlagnahmung oder konfiskatorische Besteuerung des Anlagevermögens eines ausländischen Direktinvestors entscheiden kann und diesem Direktinvestor in der Vergangenheit vor dessen Investitionsentscheidung versprochen hatte, solche Maßnahmen nicht zu ergreifen. Nachdem die Investition erfolgt ist, kann das Komitee durch das Nichteinhalten des Versprechens einen materiellen Gewinn erzielen. Allerdings entstehen den Befürwortern des Nichteinhaltens (geringe) moralische Kosten. In diesem Zusammenhang zeigen wir, dass kleine Komitees ihr Versprechen mit höherer Wahrscheinlichkeit brechen als große Komitees. Der Grad der Selbstbindung des Komitees kann somit von den Wählern über die Größe des Komitees gesteuert werden. Wir belegen, dass die theoretischen Hypothesen über das Verhalten des Komitees durch Experimente bestätigt werden.

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Bibliographic Info

Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Market Processes and Governance with number SP II 2003-31.

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Date of creation: 2003
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Handle: RePEc:zbw:wzbmpg:spii200331

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Keywords: coordination; commitment; democracy; voting;

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  1. Matthias Messner & Mattias K. Polborn, 2004. "Voting on Majority Rules," Review of Economic Studies, Wiley Blackwell, vol. 71(1), pages 115-132, 01.
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Cited by:
  1. Rothenhäusler, Dominik & Schweizer, Nikolaus & Szech, Nora, 2013. "Institutions, shared guilt, and moral transgression," Discussion Papers, Research Unit: Economics of Change SP II 2013-305, Social Science Research Center Berlin (WZB).
  2. Kai A. Konrad & Florian Morath, 2011. "Social Mobility and Redistributive Taxation," Working Papers social_mobility_and_redis, Max Planck Institute for Tax Law and Public Finance.
  3. Rothenhäusler, Dominik & Schweizer, Nikolaus & Szech, Nora, 2013. "Institutions, shared guilt, and moral transgression," Working Paper Series in Economics 47, Karlsruhe Institute of Technology (KIT), Department of Economics and Business Engineering.

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