Club-in-the-club: Reform under unanimity
In many organizations, decisions are taken by unanimity giving each member veto power. We analyze a model of an organization in which members with heterogenous productivity privately contribute to a common good. Under unanimity, the least efficient member imposes her preferred effort choice on the entire organization. The threat of forming an “inner organization” can undermine the veto power of the less efficient members and coerce them to exert more effort. We also identify the conditions under which the threat of forming an inner organization is executed. Finally, we show that majority rules effectively prevent the emergence of inner organizations.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gradstein, Mark, 2004. "Political bargaining in a federation: Buchanan meets Coase," European Economic Review, Elsevier, vol. 48(5), pages 983-999, October.
- Milgrom, Paul R & Weber, Robert J, 1982.
"A Theory of Auctions and Competitive Bidding,"
Econometric Society, vol. 50(5), pages 1089-1122, September.
- Daron Acemoglu & James A. Robinson, 2000.
"Why Did The West Extend The Franchise? Democracy, Inequality, And Growth In Historical Perspective,"
The Quarterly Journal of Economics,
MIT Press, vol. 115(4), pages 1167-1199, November.
- Acemoglu, Daron & Robinson, James A, 1998. "Why did the West Extend the Franchise? Democracy, Inequality and Growth in Historical Perspective," CEPR Discussion Papers 1797, C.E.P.R. Discussion Papers.
- repec:spo:wpmain:info:hdl:2441/c8dmi8nm4pdjkuc9g7287gghh is not listed on IDEAS
- repec:cup:cbooks:9780521477185 is not listed on IDEAS
- Effrosyni Diamantoudi & Eftichios S. Sartzetakis, 2001.
"Stable International Environmental Agreements: An Analytical Approach,"
04001, Concordia University, Department of Economics, revised Feb 2003.
- Effrosyni Diamantoudi & Eftichios S. Sartzetakis, 2006. "Stable International Environmental Agreements: An Analytical Approach," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(2), pages 247-263, 05.
- Effrosyni Diamantoudi & Sartzetakis, Eftichios, . "Stable International Environmental Agreements: An Analytical Approach," Economics Working Papers 2001-10, School of Economics and Management, University of Aarhus.
- Effrosyni Diamantoudi & Eftichios Sartzetakis, 2002. "Stable International Environmental Agreements: An Analytical Approach," Others 0201001, EconWPA.
- d'ASPREMONT, Claude & JACQUEMIN, Alexis & GABSZEWICZ, Jean J. & WEYMARK, John A., .
"On the stability of collusive price leadership,"
CORE Discussion Papers RP
-522, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Berglöf, Erik & Burkart, Mike & Friebel, Guido & Paltseva, Elena, 2012.
"Club-in-the-club: Reform under unanimity,"
Journal of Comparative Economics,
Elsevier, vol. 40(3), pages 492-507.
- Avinash Dixit, 2003. "Clubs with Entrapment," American Economic Review, American Economic Association, vol. 93(5), pages 1824-1829, December.
- Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
- Bordignon, Massimo & Brusco, Sandro, 2001.
"Optimal secession rules,"
European Economic Review,
Elsevier, vol. 45(10), pages 1811-1834, December.
- Coeurdacier, Nicolas & Martin, Philippe, 2009.
"The geography of asset trade and the euro: Insiders and outsiders,"
Journal of the Japanese and International Economies,
Elsevier, vol. 23(2), pages 90-113, June.
- Nicolas Coeurdacier & Philippe Martin, 2009. "The geography of asset trade and the euro: Insiders and outsiders," NBER Chapters, in: Financial Globalization, 20th Anniversary Conference, NBER-TCER-CEPR National Bureau of Economic Research, Inc.
- Coeurdacier, Nicolas & Martin, Philippe, 2006. "The Geography of Asset Trade and the Euro: Insiders and Outsiders," ESSEC Working Papers DR 06020, ESSEC Research Center, ESSEC Business School.
- Coeurdacier, Nicolas & Martin, Philippe, 2007. "The geography of asset trade and the euro: insiders and outsiders," CEPREMAP Working Papers (Docweb) 0701, CEPREMAP.
- Coeurdacier, Nicolas & Martin, Philippe, 2007. "The Geography of Asset Trade and the Euro: Insiders and Outsiders," CEPR Discussion Papers 6032, C.E.P.R. Discussion Papers.
- Matthias Messner & Mattias K. Polborn, 2004.
"Voting on Majority Rules,"
Review of Economic Studies,
Oxford University Press, vol. 71(1), pages 115-132.
- Hans-Peter Weikard, 2009.
"Cartel Stability Under An Optimal Sharing Rule,"
University of Manchester, vol. 77(5), pages 575-593, 09.
- Erlenmaier, Ulrich & Gersbach, Hans, 2004. "Bundling and the Unanimity Rule," CEPR Discussion Papers 4808, C.E.P.R. Discussion Papers.
- Buchanan, James M & Faith, Roger L, 1987. "Secession and the Limits of Taxation: Toward a Theory of Internal Exit," American Economic Review, American Economic Association, vol. 77(5), pages 1023-31, December.
- Sylvie Thoron, 1998. "Formation of a Coalition-Proof Stable Cartel," Canadian Journal of Economics, Canadian Economics Association, vol. 31(1), pages 63-76, February.
- Bolton, Patrick & Roland, Gerard, 1997.
"The Breakup of Nations: A Political Economy Analysis,"
The Quarterly Journal of Economics,
MIT Press, vol. 112(4), pages 1057-90, November.
- Bolton, Patrick & Roland, Gérard, 1995. "The Break up of Nations: A Political Economy Analysis," CEPR Discussion Papers 1225, C.E.P.R. Discussion Papers.
- Philippe Aghion & Patrick Bolton, 2003.
"Incomplete Social Contracts,"
Journal of the European Economic Association,
MIT Press, vol. 1(1), pages 38-67, 03.
- repec:spo:wpecon:info:hdl:2441/c8dmi8nm4pdjkuc9g7287gghh is not listed on IDEAS
- Fearon, James D., 1995. "Rationalist explanations for war," International Organization, Cambridge University Press, vol. 49(03), pages 379-414, June.
- Bard Harstad, 2006. "Flexible Integration? Mandatory and Minimum Participation Rules," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(4), pages 683-702, December.
- Gradstein, Mark, 2004. "Political Bargaining in a Federation: Buchanan meets Coase," CEPR Discussion Papers 4188, C.E.P.R. Discussion Papers.
- Mathias Dewatripont & Francesco Giavazzi & Jürgen von Hagen & Ian Harden & Didier Baudewyns & Gérard Roland & Howard Rosenthal & André Sapir & Guido Tabellini, 1995. "Flexible integration: towards a more effective and democratic Europe," ULB Institutional Repository 2013/9541, ULB -- Universite Libre de Bruxelles.
- Vislie, Jon, 1994. "Efficiency and equilibria in complementary teams," Journal of Economic Behavior & Organization, Elsevier, vol. 23(1), pages 83-91, January.
When requesting a correction, please mention this item's handle: RePEc:eee:jcecon:v:40:y:2012:i:3:p:492-507. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.