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Moral cost, commitment, and committee size
[Moralische Kosten, Selbstbindung und die Größe von Komitees]

  • Huck, Steffen
  • Konrad, Kai A.

Consider a committee that in the past has made a promise not to confiscate the profits from a foreign investor. After the investment has taken place, there is a material benefit if the committee decides to default on the earlier promise. But there are also some small moral costs for those who vote in favor of default. We show that in such situations small committees are more likely to default than large committees. Thus, constituencies can decide about degrees of commitment by choosing committee sizes appropriately. Experimental data confirms our predictions.

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Paper provided by Social Science Research Center Berlin (WZB) in its series Discussion Papers, Research Unit: Market Processes and Governance with number SP II 2003-31.

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Date of creation: 2003
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Handle: RePEc:zbw:wzbmpg:spii200331
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  1. Tim Besley & Stephen Coate, . "An Economic Model of Representative Democracy," Penn CARESS Working Papers ecf70d639d700dba5327ab0c8, Penn Economics Department.
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  9. Fernandez, Raquel & Rodrik, Dani, 1991. "Resistance to Reform: Status Quo Bias in the Presence of Individual-Specific Uncertainty," American Economic Review, American Economic Association, vol. 81(5), pages 1146-55, December.
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