Committee Design with Endogenous Participation
We investigate the optimal design of a committee in a model with the endogenous participation of experts who have private information about their own abilities. We study three different dimensions of committee design: members' wages, the number of seats, and the communication system. We show that, surprisingly, higher wages lead to lower quality experts. By contrast, transparency improves the quality of experts on the committee. We provide a complete characterization of optimal committees. They are characterized by low wages and can be transparent or opaque. An increase in the significance of the decision requires a larger optimal committee, but does not call for different wages or for another communication system. Finally, we prove that the optimal committee design represents the best possible mechanism for the principal.
|Date of creation:||12 Jun 2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://www.wiwi.uni-konstanz.de/fb
More information through EDIRC
|Order Information:||Web: http://www.wiwi.uni-konstanz.de/fb|
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.:
- Jackson, Matthew O., 1999.
"A Crash Course in Implementation Theory,"
1076, California Institute of Technology, Division of the Humanities and Social Sciences.
- Holmstrom, Bengt, 1999.
"Managerial Incentive Problems: A Dynamic Perspective,"
Review of Economic Studies,
Wiley Blackwell, vol. 66(1), pages 169-82, January.
- Bengt Holmstrom, 1999. "Managerial Incentive Problems: A Dynamic Perspective," NBER Working Papers 6875, National Bureau of Economic Research, Inc.
- Szentes, Balazs & Koriyama, Yukio, 2009. "A resurrection of the Condorcet Jury Theorem," Theoretical Economics, Econometric Society, vol. 4(2), June.
- Scharfstein, David S & Stein, Jeremy C, 1990.
"Herd Behavior and Investment,"
American Economic Review,
American Economic Association, vol. 80(3), pages 465-79, June.
- Harald Uhlig, 1996.
"A law of large numbers for large economies (*),"
Springer, vol. 8(1), pages 41-50.
- Hahn, Volker & Gersbach, Hans, 2001.
"Should the Individual Voting Records of Central Bankers be Published?,"
Discussion Paper Series 1: Economic Studies
2001,02, Deutsche Bundesbank, Research Centre.
- Hans Gersbach & Volker Hahn, 2008. "Should the individual voting records of central bankers be published?," Social Choice and Welfare, Springer, vol. 30(4), pages 655-683, May.
- César Martinelli, 2005.
"Rational Ignorance and Voting Behavior,"
784828000000000461, UCLA Department of Economics.
- Kahn, Charles M. & Green, Jerry, 1983.
3203642, Harvard University Department of Economics.
- Gershkov, Alex & Szentes, Balázs, 2009.
"Optimal voting schemes with costly information acquisition,"
Journal of Economic Theory,
Elsevier, vol. 144(1), pages 36-68, January.
- Alex Gershkov & Balazs Szentes, 2004. "Optimal Voting Schemes with Costly Information Acquisition," NajEcon Working Paper Reviews 122247000000000311, www.najecon.org.
- Bauke Visser & Otto H Swank, 2007. "On Committees of Experts," The Quarterly Journal of Economics, MIT Press, vol. 122(1), pages 337-372, 02.
- Daniel Seidmann, 2011. "A theory of voting patterns and performance in private and public committees," Social Choice and Welfare, Springer, vol. 36(1), pages 49-74, January.
- Marco Ottaviani & Peter Norman Sørensen, 2006. "Reputational cheap talk," RAND Journal of Economics, RAND Corporation, vol. 37(1), pages 155-175, 03.
- Kiel, Alexandra & Gerling, Kerstin & Schulte, Elisabeth & Grüner, Hans Peter, 2003.
"Information acquisition and decision making in committees: a survey,"
Working Paper Series
0256, European Central Bank.
- Gerling, Kerstin & Gruner, Hans Peter & Kiel, Alexandra & Schulte, Elisabeth, 2005. "Information acquisition and decision making in committees: A survey," European Journal of Political Economy, Elsevier, vol. 21(3), pages 563-597, September.
- repec:rje:randje:v:37:y:2006:1:p:155-175 is not listed on IDEAS
- Volker Hahn, 2010.
"Sequential Aggregation of Verifiable Information,"
CER-ETH Economics working paper series
10/136, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
- Dino Gerardi & Leeat Yariv, 2008. "Costly Expertise," American Economic Review, American Economic Association, vol. 98(2), pages 187-93, May.
- Kaushik Mukhopadhaya, 2003. "Jury Size and the Free Rider Problem," Journal of Law, Economics and Organization, Oxford University Press, vol. 19(1), pages 24-44, April.
- Nicola Persico, 2004. "Committee Design with Endogenous Information," Review of Economic Studies, Wiley Blackwell, vol. 71(1), pages 165-191, 01.
- Gersbach, Hans & Hahn, Volker, 2005.
"Voting Transparency in a Monetary Union,"
CEPR Discussion Papers
5155, C.E.P.R. Discussion Papers.
- Nicola Persico, 2004. "Committee Design with Endogenous Information," Review of Economic Studies, Oxford University Press, vol. 71(1), pages 165-191.
- Azariadis, Costas, 1983. "Employment with Asymmetric Information," The Quarterly Journal of Economics, MIT Press, vol. 98(3), pages 157-72, Supplemen.
- Fox, Justin & Van Weelden, Richard, 2012. "Costly transparency," Journal of Public Economics, Elsevier, vol. 96(1), pages 142-150.
- Volker Hahn, 2012.
"On the Optimal Size of Committees of Experts,"
Working Paper Series of the Department of Economics, University of Konstanz
2012-24, Department of Economics, University of Konstanz.
- Hahn, Volker, 2012. "On the Optimal Size of Committees of Experts," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century 62041, Verein für Socialpolitik / German Economic Association.
- Akerlof, George A, 1982. "Labor Contracts as Partial Gift Exchange," The Quarterly Journal of Economics, MIT Press, vol. 97(4), pages 543-69, November.
- Job Swank & Otto H. Swank & Bauke Visser, 2008. "How Committees of Experts Interact with the Outside World: Some Theory, and Evidence from the FOMC," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 478-486, 04-05.
When requesting a correction, please mention this item's handle: RePEc:knz:dpteco:1312. 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: (Gundula Hadjiani)
If references are entirely missing, you can add them using this form.