A Theory of Conservatism
A free-rider problem arises when a group choice between two alternatives has to be made on the basis of privately collected evidence, leading to insufficient effort in gathering evidence and an ex ante welfare loss for the group. To alleviate the free-rider problem, the group can commit to a "conservative" rule, whereby the decision is made against the alternative favored by the group's preference or prior when evidence supports it but is not preponderant. Optimal conservatism increases private incentives to gather evidence and improves the quality of the group decision. My result explains why sometimes groups appear overly cautious toward favored alternatives.
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.
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.:
- Dearden, J. & Ickes, B.W. & Samuelson, L., 1988.
"To Innovate Or Not To Innovate: Incentives And Innovation In Hierarchies,"
0-88-1, Pennsylvania State - Department of Economics.
- Dearden, James & Ickes, Barry W & Samuelson, Larry, 1990. "To Innovate or Not to Innovate: Incentives and Innovation in Hierarchies," American Economic Review, American Economic Association, vol. 80(5), pages 1105-1124, December.
- Dearden, J. & Ickes, B.W. & Samuelson, L., 1988. "To Innovate Or Not To Innovate: Incentives And Innovation In Hierarchies," Papers 9-88-4, Pennsylvania State - Department of Economics.
- Prendergast, Canice, 1993. "A Theory of "Yes Men."," American Economic Review, American Economic Association, vol. 83(4), pages 757-770, September.
- Gilbert, Richard & Klemperer, Paul, 1993.
"An Equilibrium Theory of Rationing,"
CEPR Discussion Papers
805, C.E.P.R. Discussion Papers.
When requesting a correction, please mention this item's handle: RePEc:ucp:jpolec:v:109:y:2001:i:3:p:617-636. 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: (Journals Division)
If references are entirely missing, you can add them using this form.