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Decision making in committees: transparency, reputation, and voting rules

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  • Levy, Gilat

Abstract

In this paper I analyze the effect of the transparency of the decision making process in committees on the decisions that are eventually taken. I focus on committees whose members are motivated by career concerns, so that each member tries to enhance his own reputation. When the decision making process is secretive, the individual votes of the committee members are not exposed to the public but only the final decision. Thus, individuals are evaluated according to the group's decision. I find that in such a case, group members are induced to comply with preexisting biases. For example, if the voting rule demands a supermajority to accept a reform, individuals vote more often against reforms and exacerbate the conservatism of the voting rule. When the decision making process becomes transparent and individual votes are observed, this effect disappears and such committees are then more likely to accept reforms. I also find that coupled with the right voting rule, a secretive procedure may induce better decisions than a transparent one.

Suggested Citation

  • Levy, Gilat, 2007. "Decision making in committees: transparency, reputation, and voting rules," LSE Research Online Documents on Economics 3697, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:3697
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    References listed on IDEAS

    as
    1. Andrea Prat, 2005. "The Wrong Kind of Transparency," American Economic Review, American Economic Association, vol. 95(3), pages 862-877, June.
    2. repec:cup:apsrev:v:92:y:1998:i:01:p:23-35_20 is not listed on IDEAS
    3. DanielJ. Seidmann, 2008. "Optimal Quotas in Private Committees," Economic Journal, Royal Economic Society, vol. 118(525), pages 16-36, January.
    4. Levy, Gilat, 2004. "Anti-herding and strategic consultation," European Economic Review, Elsevier, vol. 48(3), pages 503-525, June.
    5. David Austen-Smith & Tim Feddersen, 2002. "Deliberation and Voting Rules," Discussion Papers 1359, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    6. Nicola Persico, 2004. "Committee Design with Endogenous Information," Review of Economic Studies, Oxford University Press, vol. 71(1), pages 165-191.
    7. Anne Sibert, 2003. "Monetary Policy Committees: Individual and Collective Reputations," Review of Economic Studies, Oxford University Press, vol. 70(3), pages 649-665.
    8. repec:cup:apsrev:v:90:y:1996:i:01:p:34-45_20 is not listed on IDEAS
    9. Trueman, Brett, 1994. "Analyst Forecasts and Herding Behavior," Review of Financial Studies, Society for Financial Studies, vol. 7(1), pages 97-124.
    10. Ottaviani, Marco & Sorensen, Peter, 2001. "Information aggregation in debate: who should speak first?," Journal of Public Economics, Elsevier, vol. 81(3), pages 393-421, September.
    11. John Fingleton, 2005. "Career Concerns of Bargainers," Journal of Law, Economics, and Organization, Oxford University Press, vol. 21(1), pages 179-204, April.
    12. Bengt Holmström, 1999. "Managerial Incentive Problems: A Dynamic Perspective," Review of Economic Studies, Oxford University Press, vol. 66(1), pages 169-182.
    13. Timothy Feddersen & Wolfgang Pesendorfer, 1996. "Convicting the Innocent: The Inferiority of Unanimous Jury Verdicts," Discussion Papers 1170, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    14. Bengt Holmstrom, 1999. "Managerial Incentive Problems: A Dynamic Perspective," NBER Working Papers 6875, National Bureau of Economic Research, Inc.
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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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