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Moral Cost, Commitment, and Committee Size

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  • Steffen Huck
  • Kai A. Konrad

Abstract

Consider a committee that in the past has made a promise not to confiscate the profits from an investor. After the investment has taken place, there is a material benefit if the committee decides to default on the earlier promise. But in some situations there are also some small moral costs for those who vote in favor of default. For the symmetric equilibrium, for given benefits of default, time-consistent default can be ruled out for sufficiently large committees.

Suggested Citation

  • Steffen Huck & Kai A. Konrad, 2005. "Moral Cost, Commitment, and Committee Size," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 161(4), pages 575-575, December.
  • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(200512)161:4_575:mccacs_2.0.tx_2-2
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    Citations

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    Cited by:

    1. 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.
    2. Dominik Rothenhaüsler & Nikolaus Schweizer & Nora Szech, 2016. "Guilt in Voting and Public Good Games," Working Papers 2016-026, Human Capital and Economic Opportunity Working Group.
    3. Konrad, Kai A., 2017. "Large investors, regulatory taking and investor-state dispute settlement," European Economic Review, Elsevier, vol. 98(C), pages 341-353.
    4. Konrad, Kai A. & Morath, Florian, 2010. "Social mobility and redistributive taxation," Discussion Papers, Research Professorship & Project "The Future of Fiscal Federalism" SP II 2010-15, Social Science Research Center Berlin (WZB).
    5. Rothenhäusler, Dominik & Schweizer, Nikolaus & Szech, Nora, 2016. "Guilt in voting and public good games," Working Paper Series in Economics 99, Karlsruhe Institute of Technology (KIT), Department of Economics and Business Engineering.
    6. repec:eee:gamebe:v:104:y:2017:i:c:p:430-443 is not listed on IDEAS
    7. 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).
    8. repec:eee:eecrev:v:101:y:2018:i:c:p:664-681 is not listed on IDEAS
    9. Szech, Nora & Rothenhäusler, Dominik & Schweizer, Nikolaus, 2014. "Institutions, Shared Guilt, and Moral Transgression," Annual Conference 2014 (Hamburg): Evidence-based Economic Policy 100518, Verein für Socialpolitik / German Economic Association.
    10. Dominik Rothenhäusler & Nikolaus Schweizer & Nora Szech, 2015. "Institutions, Shared Guilt, and Moral Transgression," CESifo Working Paper Series 5525, CESifo Group Munich.
    11. repec:rss:jnljms:v6i1p3 is not listed on IDEAS

    More about this item

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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