consensus building how to persuade a group many decisions in private and public organizations are made by groups the paper explores strategies that the sponsor of a proposal may employ to convince a qualified majority of group members to approve the proposal adopting a mechanism design approach to communication it emphasizes the need to distill information selectively to key members of the group and to engineer persuasion cascades in which members who are brought on board sway the opinion of others the paper unveils the factors such as the extent of congruence among group members and between them and the sponsor and the size and governance of the group that condition the sponsor s ability to maneuver and get his project approved

lords of the harvest third party influence and regulatory approval of genetically modified organisms little is known about the factors that influence regulatory agency decision making we posit that regulatory agencies are influenced by the firms they regulate but not exclusively via dyadic exchanges as is traditionally argued in the regulatory capture and business government literatures instead regulatory decisions are indirectly shaped via third party actors who shield agencies from legitimacy threats focusing empirically on the united states department of agriculture s usda approval of genetically modified organisms gmos we find that product assessments by powerful stakeholders and peer agencies influence product approval and that their effects vary under different threats we also discuss the implications of these findings for businessgovernment relations nonmarket strategy and organization theory

endogenous competence and a limit to the condorcet jury theorem the seminal contribution known as the condorcet jury theorem observes that under a specific set of conditions an increase in the size of a group tasked with making a binary decision guilty or innocent say leads to an improvement in the group s ability to make the correct choice an assumption that is not properly appreciated in the relevant literature is that the competency of the group members is assumed to be exogenous in numerous applications members of the group make investments to improve the accuracy of their decision making e g pre meeting efforts we consider the collective action problem that arises we show that if individual competence is endogenous then increases in the group size encourages free riding this trades off with the value of information aggregation thus the value of the larger group size is muted extensions illustrate that if committee members are allowed to exit not participate the equilibrium committee size is reduced additionally supermajority voting rules encourage investments and consequently individual competence

compulsory versus voluntary voting an experimental study abstract we report on an experiment comparing compulsory and voluntary voting institutions in a voting game with common preferences rational choice theory predicts sharp differences in voter behavior between these two institutions if voting is compulsory then voters may find it rational to vote insincerely i e against their private information if voting is voluntary so that abstention is allowed then sincere voting in accordance with a voter s private information is always rational while participation may become strategic we find strong support for these theoretical predictions in our experimental data moreover voters adapt their decisions to the voting institution in place in such a way as to make the group decision accuracy differences between the two voting institutions negligible the latter finding may serve to rationalize the co existence of compulsory and voluntary voting institutions in nature

unanimous rules in the laboratory we study the information aggregation properties of unanimous voting rules in the laboratory in line with theoretical predictions we find that majority rule with veto power dominates unanimity rule we also find that the strategic voting model is a fairly good predictor of subject behavior finally we exploit a framing effect to study how the presence of less sophisticated agents affects veto s welfare properties

consumer demand and the life cycle allocation of household expenditures the purpose of this paper is to estimate the parameters of household preferences that determine the allocation of goods within the period and over the life cycle using micro data in doing so the authors are able to identify important effects of demographics labor market status and other household characteristics on the intertemporal allocation of expenditure they test the validity of the life cycle model using excess sensitivity tests and find that controlling for demographics and labor market status variables can largely explain the excess sensitivity of consumption to anticipated changes in income

majority rules and incentives a club s majority rule defines the number of members that must approve a policy proposed to replace the status quo since the majority rule thus dictates the extent to which winners must compensate losers it also determines the incentives to invest in order to become a winner of anticipated projects if the required majority is large members invest too little because of a holdup problem if it is small members invest too much in order to become a member of the majority coalition to balance these opposing forces the majority rule should increase in the project s value and the club s enforcement capacity but decrease in the heterogeneity in preferences externalities can be internalized by adjusting the rule with heterogeneity in size or initial conditions votes should be appropriately weighted or double majorities required

costly information acquisition is it better to toss a coin abstract this paper presents a strategic model of common value elections with endogenous information acquisition it proves that majoritarian elections can fail to aggregate information when voters have heterogeneous skills and provides necessary and sufficient conditions for information aggregation inefficiencies can be partially corrected by limiting participation to the most competent citizens a result which provides a rational foundation for epistocratic government

monetary policy committees and interest rate setting abstract this paper shows that it is preferable for monetary policy to be conducted by a committee instead of a single policy maker if there is uncertainty about potential output we examine three decision procedures an optimal procedure averaging and voting and find that the latter is the appropriate way to reach decisions if policy makers are not equally skilled finally we demonstrate that efficient decision procedures reduce the persistence of shocks

potential pitfalls for the purchasing power parity puzzle sampling and specification biases in mean reversion tests of the law of one price the ppp puzzle is based on empirical evidence that international price differences for individual goods loop or baskets of goods ppp appear highly persistent or even nonstationary the present consensus is these price differences have a half life that is of the order of five years at best and infinity at worst this seems unreasonable in a world where transportation and transaction costs appear so low as to encourage arbitrage and the convergence of price gaps over much shorter horizons typically days or weeks however current empirics rely on a particular choice of methodology involving i relatively low frequency monthly quarterly or annual data and ii a linear model specification in fact these methodological choices are not innocent and they can be shown to bias analysis towards findings of slow convergence and a random walk intuitively if we suspect that the actual adjustment horizon is of the order of days then monthly and annual data cannot be expected to reveal it if we suspect arbitrage costs are high enough to produce a substantial band of inaction then a linear model will fail to support convergence if the process spends considerable time random walking in that band thus when testing for ppp or loop model specification and data sampling should not proceed without consideration of the actual institutional context and logistical framework of markets

from streets to suites how the anti biotech movement affected german pharmaceutical firms how do social movements affect decisions within corporations such as the commercialization of new technologies we suggest that the effect of movement activism is conditioned by the internal polity and therefore varies across organizations this article examines how the anti genetic movement in germany during the 1980s affected six domestic pharmaceutical firms commercialization of biotechnology we develop a process model of how movements penetrate the relatively closed polity of private organizations external contestation weakened the position of internal champions of biotechnology precipitated divisions among organizational elites and undermined collective commitment to the technology the movement also increased perceptions of investment uncertainty but the consequences of this uncertainty depended on organizational logics of decision making as a result investments in some firms were tilted away from domestic biotechnology projects the model also explains this variation in organization level outcomes of movement contestation

viewpoint decision making in committees this article reviews recent developments in the theory of committee decision making a committee consists of self interested members who make a public decision by aggregating imperfect information dispersed among them according to a pre specified decision rule we focus on costly information acquisition strategic information aggregation and rules and processes that enhance the quality of the committee decision seeming inefficiencies of the committee decision making process such as over cautiousness voting and delay emerge as partial remedies to these incentive problems cet article passe en revue certains developpements recents dans la theorie de la prise de decision en comite un comite est defini comme un groupe de membres qui ont des interets particuliers et qui prennent une decision publique en agregeant une information imparfaite et dispersee a travers le groupe selon une regle de decision pre etablie les auteurs portent leur attention sur l acquisition couteuse d information l agregation de l information strategique et les regles et procedures qui accroissent la qualite de la decision en comite ce qui apparait comme des inefficacites du processus de prise de decision en comite sur precaution votes delais s avere etre des remedes partiels aux problemes d incitation

voter motivation and the quality of democratic choice abstract the efficiency of committee voting and referenda with common interest issues critically depends on voter motivation i e on voters willingness to cast an informed vote if voters are motivated voting may result in smart choices because of information aggregation but if voters remain ignorant delegating decision making to an expert may yield better outcomes we experimentally study a common interest situation in which we vary voters information cost and the competence of the expert we find that voters are more motivated to collect information than predicted by standard theory and that voter motivation is higher when subjects demand to make choices by voting than when voting is imposed on subjects

utility consistent discrete continuous choices in soil conservation a utility consistent model of participation and participation intensity choices for a voluntary soil conservation program is developed a modified form of roy s identity is used to derive a two equation system that links the discrete dichotomous choice participation and the continuous choice intensity to the same utility function the model corrects for selectivity bias that arises in single equation approaches an application to a filter strip program in two counties in illinois and michigan demonstrates that different factors affect responses to the program across the sample regions estimated willingness to accept payments for participation in the program suggest policy impacts are not uniform across locations

organizational responses to public and private politics an analysis of climate change activists and u s oil and gas firms we explore how activists public and private politics elicit different organizational responses using data on u s petroleum companies from 1982 to 2010 we investigate how climate change activists serving as witnesses at congressional hearings and engaging in firm protests influenced firms internal and external responses we find that public politics induced internally focused practice adoption whereas private politics induced externally focused framing activities we also find that private and public politics had an interaction effect as firms faced more private political pressure they were less likely to respond to public political pressures similarly as firms faced greater public political pressure they were less likely to respond to private political pressures the results suggest that activists can have a significant impact on firm behavior depending on the mix of private and public political tactics they engage in we discuss the implications of our study for social movement research organ

erratum standards versus standards the effects of different pollution restrictions when economists refer to pollution standards they almost universally mean uniform restrictions on pollution emissions e g william j baumol and wallace e oates 1975 ch 13 susan rose ackerman 1973 david besanko 1978 however in practice standards take many forms not only emissions restrictions but restrictions on pollution per unit of output or per unit of an input restrictions on the use of a polluting input or mandated use of a particular pollution control technology these specifications of regulations will have a variety of effects on a firm s resource allocation decisions for instance allowing pollution per unit of output as the standard instead of directly restricting the level of pollution gives the firm some choice in addition to reducing pollution it can increase its output to dilute the pollution this paper examines the effects of five different forms of pollution standards on input decisions the level of production and firm profits the results show that the different standards by providing firms with different incentives change the firm s allocation decisions and affect the relative profitability of the standards section i reviews the existing literature on the incentives of different instruments the following section describes the model to be used five different forms of pollution constraints are individually examined in section iii using a graphical approach their relative effects as well as some special cases are assessed in section iv finally section v raises the case of different standards when firms are not identical

greenwash vs brownwash exaggeration and undue modesty in corporate sustainability disclosure corporate greenwashing has accelerated in recent years bringing in its wake growing skepticism about corporate green claims although a theory of the drivers and deterrents of greenwashing has begun to emerge it is static in nature and does not incorporate the full range of ways in which firms can misrepresent their environmental performance our contribution is threefold first we extend the theory of organizational information disclosure to incorporate the possibility of undue modesty about a firm s environmental social and governance practices second we hypothesize about the drivers of exaggeration and undue modesty based on which of a firm s stakeholders are salient at a given point in time to do so we place the firm within a dynamic context that has largely been missing in the prior literature third we test our hypotheses using a data set that allows us to directly compare corporate green claims against actual performance results reveal that corporate output growth deregulation and low profits under deregulation significantly affect the choice between greenwashing and brownwashing the effects of growth and profits are mitigated by external scrutiny

decision making in committees transparency reputation and voting rules 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

information aggregation rationality and the condorcet jury theorem the condorcet jury theorem states that majorities are more likely than any single individual to select the better of two alternatives when there exists uncertainty about which of the two alternatives is in fact preferred most extant proofs of this theorem implicitly make the behavioral assumption that individuals vote sincerely in the collective decision making a seemingly innocuous assumption given that individuals are taken to possess a common preference for selecting the better alternative however in the model analyzed here we find that sincere behavior by all individuals is not rational even when individuals have such a common preference in particular sincere voting does not constitute a nash equilibrium a satisfactory rational choice foundation for the claim that majorities invariably do better than individuals therefore has yet to be derived

optimal voting schemes with costly information acquisition a group of individuals with identical preferences must make a decision under uncertainty about which decision is best before the decision is made each agent can privately acquire a costly and imperfect signal we discuss how to design a mechanism for eliciting and aggregating the collected information so as to maximize ex ante social welfare we first show that of all mechanisms a sequential one is optimal and works as follows at random one agent at a time is selected to acquire information and report the resulting signal agents are informed of neither their position in the sequence nor of other reports acquiring information when called upon and reporting truthfully is an equilibrium we next characterize the ex ante optimal scheme among all ex post efficient mechanisms in this mechanism a decision is made when the precision of the posterior exceeds a cut off that decreases with each additional report the restriction to ex post efficiency is shown to be without loss when the available signals are sufficiently imprecise on the other hand ex post efficient mechanisms are shown to be suboptimal when the cost of information acquisition is sufficiently small

corporate governance of banks a survey this paper reviews the empirical literature on the corporate governance of banks we start by highlighting the main differences between banks and nonfinancial firms and focus on three characteristics that make banks special i regulation ii the capital structure of banks and iii the complexity and opacity of their business and structure next we discuss the characteristics of corporate governance in banks and how they differ from the governance of nonfinancial firms we then review the evidence on three governance mechanisms i boards ii ownership structures and iii executive compensation our review suggests that some of the empirical regularities found in the literature on corporate governance of nonfinancial institutions such as the positive negative association between board independence size and performance do not hold for banks also existing work provides no conclusive results regarding the relationship between different governance mechanisms and various measures for banks performance we discuss potential explanations for these mixed results

minority voting rights can maximize majority welfare i use condorcet s information aggregation model to show that sometimes the best possible decision procedure for the majority allows the minority to enforce its favored outcome even when overruled by a majority special voting power gives the minority an incentive to participate meaningfully and more participation means more information is aggregated which makes the majority better off this result can be understood as a mathematical corroboration of lani guinier s arguments that voting procedures can be designed to encourage minority participation benefitting everyone

quality leadership when regulatory standards are forthcoming in many markets governments set minimum quality standards while some sellers compete on the basis of quality by exceeding them such quality leadership strategies often win public acclaim especially when they involve environmental attributes using a duopoly model of vertical product differentiation we show that if the high quality firm can commit to a quality level before regulations are promulgated it induces the regulator to weaken standards and welfare falls our results raise doubts about the social benefits of corporate self regulation and highlight the dangers of lengthy delays between legislative mandates for new regulations and their implementation

new estimates of the elasticity of marginal utility for the uk this paper provides novel empirical evidence on the value of the elasticity of marginal utility eta for the united kingdom eta is a crucial component of the social discount rate sdr which determines the inter temporal trade offs that are acceptable to society using contemporaneous and historical data new estimates are obtained using four revealed preference techniques the equal sacrifice income tax approach the euler equation approach the frisch additive preferences approach and risk aversion in insurance markets a meta analysis indicates parameter homogeneity across approaches and a central estimate of 1 5 for eta the confidence interval excludes unity the value used in official guidance by the uk government the term structure of the sdr is then estimated the result is a short run sdr of 4 5 declining to 4 2 in the very long run this is higher and flatter than the uk official guidance the difference stems from incorrect calibration of social welfare and estimation of the diffusion of growth other things equal the results suggest that current uk guidance might need to be updated

strategic disclosure of research results the cost of proving your honesty in situations where a biased sender provides verifiable information to a receiver i study how strategic reporting affects the incentives to search for information research provides series of signals that can be used selectively in reporting i show that the sender is strictly worse off when his research effort is not observed by the receiver he has to conduct more research than in the observable case and in equilibrium discloses all the information he obtained however this extra research can be socially beneficial and mandatory disclosure of results can thus be welfare reducing finally i identify cases where the sender withholds evidence and for which mandatory disclosure rules become more attractive in 2002 editors of eleven of the most prestigious medical journals announced that they would only publish the results of studies that were entered at their start in a publicly available database 1 pharmaceutical firms conduct clinical trials to test the efficacy and potential side effects of their drugs and to compare them to competitors products publishing results of studies is an efficient way to influence doctors prescriptions and patients tastes however firms can conduct multiple trials and select the most favourable results the system of mandatory disclosure adopted by medical journals is a response to the fear of such selective publishing 2 it makes the research effort of pharmaceutical firms more observable and will influence both the information they disclose and the amount of research they perform in the present article i study the interaction between the research and disclosure decisions which is an essential element in many settings the adoption of mandatory disclosure rules has subtle effects and i discover that leaving the research effort unobservable can sometimes be socially beneficial 3 i study the interaction between research and disclosure in a model where a biased sender searches for information and communicates it strategically to a receiver who will

divided majority and information aggregation theory and experiment this paper studies theoretically and experimentally the properties of plurality and approval voting when a majority gets divided by information imperfections the majority faces two challenges aggregating information to select the best majority candidate and coordinating to defeat the minority candidate under plurality the majority cannot achieve both goals at once under approval voting it can welfare is strictly higher because some voters approve of both majority alternatives in the laboratory we find i strong evidence of strategic voting and ii superiority of approval voting over plurality finally subject behavior suggests the need to study equilibria in asymmetric strategies

voluntary voting costs and benefits we compare voluntary and compulsory voting in a condorcet type model in which voters have identical preferences but dierential information with voluntary voting all equilibria involve sincere voting and positive participation thus in contrast to situations with compulsory voting there is no con ict be tween strategic and sincere behavior when voting is costless voluntary voting is welfare superior to compulsory voting even when voting is costly participa tion rates are such that in the limit the correct candidate is elected that is information fully aggregates

unemployment risk labour force participation and savings this paper analyses labour force participation and precautionary savings in the presence of risks of being fired or failing to secure a job offer when out of the labour market we use a finite horizon framework with two employment states and a stage utility function which is cara in consumption but non separable in leisure the results are that there is precautionary labour force participation employment risk lowers the reservation wage generally it also reduces consumption however due to the non separability assumption precautionary savings as usually defined may not be positive we characterize the reservation wage and contrast the results with those in which the stage utility is additive in leisure and consumption we extend the analysis to study the effects of cyclical variation in employment risk of stochastic future wage rates and of adding a third employment state of search

the stages of the policy process and the equal rights amendment 1972 1982 studies of how social movements impact policy outcomes typically treat policy change as a dichotomous phenomenon a governmental unit either adopts or does not adopt a particular policy in a particular time frame this simplistic view of the policy process runs the risk of masking how movements and other factors matter at various stages of the policy process each stage is characterized by different rules and different consequences thus movements and other factors ought to matter differently at each stage the authors examine three stages of policy development with regard to state ratification of the equal rights amendment results show that movements mattered more to legislative decisions in the earlier stages of the policy process but that their effects were eclipsed in later stages by public opinion

in defense of unanimous jury verdicts mistrials communication and strategic voting the requirement of unanimous jury verdicts in criminal trials is widely believed to reduce the likelihood of convicting the innocent this belief depends largely upon the assumption that jurors will vote nonstrategically based on their impression of the trial evidence recent literature however has questioned this assumption and feddersen and pesendorfer propose a model in which it is never a nash equilibrium for jurors to vote nonstrategically under unanimity rule and equilibrium behavior produces higher probabilities of both convicting the innocent and acquitting the guilty under unanimity rule than under numerous alternatives i extend this work by incorporating two additional features of actual jury procedure the possibility of mistrial and communication among jurors under each circumstance i demonstrate that nonstrategic voting is a nash equilibrium under fairly general conditions and that unanimity performs better than any alternative rule in minimizing probability of trial error and maximizing expected utility

information is important to condorcet jurors group decision making is very significant in a broad variety of settings this paper deals with committees that make binary decisions and addresses the question of whether informative decisions can be assumed within this framework we show that when using the optimal decision rule informative decision making is a nash equilibrium thus we justify the assumption of informative decision making and provide support for the relevance of assumptions such as independent decision making when using the optimal decision rule

opinions as incentives we study costs and benefits of differences of opinion between an adviser and a decision maker even when they share the same underlying preferences over decisions a difference of opinion about payoff relevant information leads to strategic information acquisition and transmission a decision maker faces a fundamental trade off a greater difference of opinion increases an adviser s incentives to acquire information but exacerbates the strategic disclosure of any information that is acquired nevertheless when choosing from a rich pool of opinion types it is optimal for a decision maker to select an adviser with some difference of opinion centralization of authority is essential to harness these incentive gains since delegation to the adviser can discourage effort

voting with endogenous information acquisition experimental evidence abstract the condorcet jury model with costless but informative signals about the true state of the world predicts that the efficiency of group decision making increases unambiguously with the group size however if signal acquisition is made an endogenous and costly decision then rational voters have disincentives to purchase information as the group size becomes larger we investigate the extent to which human subjects recognize this trade off between better information aggregation and greater incentives to free ride in a laboratory experiment where we vary the group size the cost of information acquisition and the precision of signals we find that the theory predicts well in the case of precise signals however when signals are imprecise free riding incentives appear to be much weaker as there is a pronounced tendency for subjects to over acquire information relative to equilibrium predictions we rationalize the latter finding using a quantal response equilibrium that allows for risk aversion

a conversational war of attrition we explore costly deliberation by two differentially informed and possibly biased jurors a hawk lones and a dove moritz alternately insist on a verdict until one concedes debate assumes one of two genres depending on bias a juror say lones is intransigent if he wishes to prevail and reach a conviction for any type of moritz next to concede in contrast lones is ambivalent if he wants the strongest conceding types of moritz to push for acquittal both jurors are ambivalent with small bias or high delay costs as lones grows more hawkish he argues more forcefully for convictions mitigating wrongful acquittals if dovish moritz is intransigent then he softens strategic substitutes leading to more wrongful convictions ambivalent debate is new and yields a novel dynamic benefit of increased polarization for if moritz is ambivalent then he toughens strategic complements and so surprisingly a more hawkish lones leads to fewer wrongful acquittals and convictions so more polarized but balanced debate can improve communication unlike in static cheap talk we also show that patient and not too biased jurors vote against their posteriors near the end of the debate optimally playing devil s advocate we shed light on the adversarial legal system peremptory challenges and cloture rules

regulating american industries markets politics and the institutional determinants of fire insurance regulation1 this article assesses three approaches to state regulation capture theory interest group analyses and neoinstitutional research state level event history analyses of fire insurance rate regulation from 1906 to 1930 are used contrary to capture theory regulation was not driven simply by firms interests in market control instead consistent with interest group analyses regulation was more likely when anticompany forces farmers and small businesses could challenge big business politically further as neoinstitutional research suggests regulation was more likely when industry governance evoked legitimacy crises when courts and professions endorsed regulation and its underlying models and when states developed system wide administrative capacities institutional conditions also mediated the effects of markets and politics on regulation using these findings we develop a theory of how political and institutional conditions shape industries governance options

program enrollment and acreage response to reforestation cost sharing programs five alternative sets of predictions are presented of the total acreage of southern pine that would have been planted after clear cut harvest if existing government forest improvement programs had made different levels of cost sharing available to nonindustrial private forest owners the predictions illustrate the importance of separating and accounting for both the number of tracts enrolled and for the size of enrolled tracts predictions are obtained from a profit maximization model that represents the owner s decision as a simultaneous choice of reforestation practice and size of tract to harvest and reforest

get rid of unanimity rule the superiority of majority rules with veto power we study unanimous decision making under incomplete information we argue that unanimous decision rules are not all equivalent we show that majority rules with veto power are i pareto superior to commonly used unanimous rules and ii ex ante efficient in a broad class of situations

when costly voting is beneficial abstract we present a costly voting model in which each voter has a private valuation for their preferred outcome of a vote when there is a zero cost to voting all voters vote and hence all values are counted equally regardless of how high they may be by having a cost to voting only those with high enough values would choose to incur this cost we show that by adding this cost welfare may be enhanced even when the cost of voting is wasteful such an effect occurs when there is both a large enough density of voters with low values and the expected value of voters is high enough

economic prescriptions for environmental problems how the patient followed the doctor s orders o ne of the dangers with ivory tower theorizing is that it is easy to lose sight of the actual set of problems which need to be solved and the range of potential solutions as one who frequently engages in this exercise i can attest to this fact in my view this loss of sight has become increasingly evident in the theoretical structure underlying environmental economics which often emphasizes elegance at the expense of realism in this paper i will argue that both normative and positive theorizing could greatly benefit from a careful examination of the results of recent innovative approaches to environmental management the particular set of policies examined here involves two tools which have received widespread support from the economics community marketable permits and emission charges pigou 1932 dales 1968 kneese and schultze 1975 both tools represent ways to induce businesses to search for lower cost methods of achieving environmental standards they stand in stark contrast to the predominant command and control approach in which a regulator specifies the technology a firm must use to comply with regulations under highly restrictive conditions it can be shown that both of the economic approaches share the desirable feature that any gains in environmental quality will be obtained at the lowest possible cost baumol and oates 1975 until the 1960s these tools only existed on blackboards and in academic journals as products of the fertile imaginations of academics however some countries have recently begun to explore using these tools as part of a broader strategy for managing environmental problems

the economics of movement success business responses to civil rights mobilization1 this article explores why movements are successful in obtaining concessions from economic actors while social movement theorists have suggested that economic actors weigh the costliness of protests the author considers the vulnerability of movement targets to both the cost of disruptions in routine transactions and the cost of conceding to movement demands by addressing the magnitude of these costs and their interaction the author derives an economic opportunity structure to predict the receptivity of economic actors to movement demands and the likely struggles among them over the decision to yield also this cost assessment approach reveals patterns of vulnerability across economic sectors to the costs of disruptive mobilization the author tests this analysis based on case studies of the responses of economic actors to civil rights mobilization in the 1960s in five southern localities these cases depict how the character of protest and variation in the configuration of business communities defined

learning aversion and voting rules in collective decision making abstract in collective decisions with uncertainty some voters may oppose the arrival of new information this note formalizes a justification for supermajority as a voting rule in such environments this is optimal when arrival of information is responsive to voters learning aversion and conservative minorities have some power to block information

life cycle expenditure allocations and the consumption costs of children abstract in this paper we assess whether it is changing needs or intertemporal substitution that dominate household expenditure responses to the presence of children over the life cycle we construct lifetime expenditure paths for households with different demographic profiles and consider the shape of these paths and some possible implications for welfare measures simulated expenditure paths based on consistent single period and multi period models indicate that it is indeed changing needs that dominate such paths in periods when children are present in the household however allowing for intertemporal substitution is still shown to be important since it can introduce new information relevant to the calculation of household welfare

humps and bumps in lifetime consumption in this article we argue that the life cycle model that allows demographics to affect household preferences and relaxes the assumption of certainty equivalence can generate hump shaped consumption profiles over age that are very similar to those observed in household level data sources and in particular match the differences in shape across different education groups liquidity constraints or myopia are not required to explain the empirical features of observed life cycle patterns

public information and electoral bias abstract we present a theory of voting that predicts that elections are more likely to be close and voter turnout is more likely to be high when citizens possess better public information about the composition of the electorate these findings suggest that providing more information to potential voters about aggregate political preferences e g through pre election polls or expert forecasts may undermine the democratic process our analysis reveals that if the distribution of political preferences is common knowledge then the unique type symmetric equilibrium leads to a stark neutrality result in which each alternative is equally likely to win the election by contrast when citizens are ignorant about the preference distribution the majority is more likely to win the election and expected voter turnout is lower welfare is therefore unambiguously higher when citizens possess less information about the preference distribution

the swing voter s curse with adversarial preferences abstract we analyze voting behavior in a large electorate in which voters have adversarial state contingent preferences with incomplete information about the state of the world we show that one type of voter can suffer from the swing voter s curse a la feddersen and pesendorfer the swing voter s curse amer econ rev 86 1996 408 424 and go on to characterize the symmetric nash equilibria of this model under different parameter values we prove that unlike settings with nonadversarial preferences there are equilibria in which in one state of the world a minority preferred candidate almost surely wins the election and thus the election may fail to correctly aggregate information indeed we show that the fraction of the electorate dissatisfied with the result can be as large as 66 2 3

efficient voting with penalties abstract simple majority does not reflect the intensity of voters preferences this paper presents an efficient collective choice mechanism with two alternatives when the designer may use non transferable punishments to persuade agents to reveal their private information the designer faces a dilemma a punishment may induce a more correct choice but its cost is socially wasteful the efficient mechanism is a weighted majority weight of each individual is known ex ante and no punishments are applied if preferences are relatively homogeneous eliciting types through punishments in order to construct type specific weights should occur if preference intensity is relatively heterogeneous

on committees of experts a committee makes a decision on a project on behalf of the public members of the committee agree on the a priori value of the project and hold additional private information about its consequences they are experts who care about the value of the project and about being considered well informed before voting on the project members can exchange their private information simultaneously we show that reputational concerns make the a priori unconventional decision more attractive and lead committees to show a united front these results hold irrespective of whether information can be manipulated or not also reputational concerns induce members to manipulate information and vote strategically if their preferences differ considerably from those of the member casting the decisive vote our last result is that the optimal voting rule balances the quality of information exchange and the alignment of interests of the decisive voter with those of the public

costly participation and heterogeneous preferences in informational committees informational committees are groups of people who are designated to gather information this article develops a simple model of committee size based on costly participation and preference heterogeneity in a setting in which the information structure and policy preferences are both represented by normal random variables i characterize an equilibrium under the mean decision rule and derive the optimal committee size i show that when effort costs are sufficiently high preference heterogeneity can provide members additional incentives to gather information and thus the optimal committee size and the principal s expected payoff can increase in the heterogeneity of committee members policy preferences

the coevolution of industries social movements and institutions wind power in the united states this study of the u s wind energy industry extends theory on the process of industry emergence by developing and testing a coevolutionary model of the relationship between social movement organizations smos institutions and industries building on research that suggests that smos can influence institutions and the path of emerging industries we show that the growth of an industry can also influence the diversity of social movements by motivating the participation of specialist smos these new smos in turn deploy distinct knowledge capabilities goals and strategies to produce institutional changes that are necessary for the continued growth of the industry our study offers a more complete conceptualization of the influence of social movements on industry emergence and growth and it extends understanding of how smo diversity is produced

committee design with endogenous information this paper is concerned with the arrangements for collective decision making in a world where agents must be motivated to acquire information the analysis identifies some basic forces shaping the design of panels of decision makers referees managers jurors etc in situations where decision makers are useful only in so far as they expend some effort to gain information about the alternatives at hand these situations are common one being the refereeing process where an editor requires the opinions of a number of experts who must read the paper acquire information in order to give an opinion as to publication analogously in committees which screen applicants to a programme the committee members must gain information about the applicant s qualifications and likelihood of success in order to evaluate whether to admit him her finally in trial juries it is important that jurors pay attention to the evidence in order to make an informed judgement 1 we focus on environments where information is a public good in the sense that the social benefits of one decision maker acquiring information exceed the private benefits a good mechanism in this environment must not only aggregate information efficiently but also induce the decision makers to acquire information we analyse the design of voting mechanisms our problem is to choose two parameters which determine both the incentive to acquire information and the efficiency with which information is aggregated the first parameter is the size of the decision making unit the number of committee members the second is the plurality required to overturn the status quo the voting rule our main result is this a voting rule that requires a large plurality in the extreme unanimity to upset the status quo can be optimal only if the information available to each committee member is sufficiently accurate when individual information is noisy the drawback

the sensitivity of consumption to transitory income estimates from panel data on households we investigate the stochastic relation between income and consumption specifically consumption of food within a panel of about 2 000 households our major findings are 1 consumption responds much more strongly to permanent than to transitory movements of income 2 the response to transitory income is nonetheless clearly positive 3 a simple test independent of our model of consumption rejects a central implication of the pure life cycle permanent income hypothesis the observed covariation of income and consumption is compatible with pure life cycle permanent income behavior on the part of80 percent of families and simple proportionality of consumption and income among the remaining 20 percent as a general matter our findings support the view that families respond differently to different sources of income variations in particular temporary income tax policies have smaller effects on consumption than do other more permanent changes in income of the same magnitude this abstract was borrowed from another version of this item

would rational voters acquire costly information abstract we analyze an election in which voters are uncertain about which of two alternatives is better for them voters can acquire some costly information about the alternatives in agreement with downs s rational ignorance hypothesis individual investment in political information declines to zero as the number of voters increases however if the marginal cost of information is near zero for nearly irrelevant information there is a sequence of equilibria such that the election outcome is likely to correspond to the interests of the majority for arbitrarily large numbers of voters thus rationally ignorant voters are consistent with a well informed electorate

self regulation taxation and public voluntary environmental agreements an increasingly popular instrument for solving environmental problems is the public voluntary agreement va in which government offers technical assistance and positive publicity to firms that reach certain environmental goals prior papers treat such agreements as a superior low cost instrument that can be used to preempt a threat of traditional inefficient regulation we present a more general model in which public vas may instead be weak tools used when political opposition makes environmental taxes infeasible we explore the conditions under which taxes public vas and unilateral industry actions are to be expected and the welfare implications of the various instruments notably we also show that welfare may be reduced by the introduction of public vas 2002 elsevier b v all rights reserved

an experimental study of jury decision rules we present experimental results on groups facing a decision problem analogous to that faced by a jury we consider three treatment variables group size three or six number of votes needed for conviction majority or unanimity and pre vote deliberation we find evidence of strategic voting under the unanimity rule a large fraction of our subjects vote for a decision analogous to conviction even when their private information indicates a state analogous to innocence this is roughly consistent with the game theoretic predictions of feddersen and pesendorfer although individual behavior is explained well by the game theoretic model there are discrepancies at the level of the group decision contrary to feddersen and pesendorfer in our experiments there are fewer outcomes analogous to incorrect convictions under unanimity rule than under majority rule in the case of no deliberation we simultaneously account for the individual and group data using quantal response equilibrium

expert information and majority decisions this paper shows theoretically and experimentally that hearing expert opinions can be a double edged sword for collective decision making we present a majoritarian voting game of common interest where committee members receive not only private information but also expert information that is more accurate than private information and observed by all members in theory there are bayesian nash equilibria where the committee members voting strategy incorporates both types of information and access to expert information enhances the efficiency of the majority decision however there is also a class of potentially inefficient equilibria where a supermajority always follow expert information and the majority decision does not aggregate private information in the laboratory the majority decisions and the subjects voting behaviour were largely consistent with those in the class of inefficient equilibria we found a large efficiency loss due to t he presence of expert information especially when the committee size was large we suggest that it may be desirable for expert information to be revealed only to a subset of committee members

committees with supermajority voting yield commitment with flexibility abstract a fundamental problem for government is how to combine commitment to certain policies with the flexibility required to adjust them when needed rogoff 1985 rogoff k 1985 the optimal degree of commitment to an intermediate monetary target q j econ 100 4 1169 1189 showed that a way to strike the right balance is to appoint an optimally conservative policy maker in real life however policy makers also have power over decisions where optimal plans are time consistent so delegating to a conservative person could be undesirable a flexible delegation device can be found in a large committee of randomly appointed members voting over policy after observing a shock when facing dynamic inconsistency under a single crossing property there exists a supermajority rule that implements the population median s optimally conservative policy maker with certainty another single crossing property guarantees that if simple majority voting is used to select the voting rule that will govern policy choice the supermajority preferred by the median is chosen for problems where dynamic inconsistency vanishes the committee will choose to make decisions by simple majority implementing median outcomes an application to monetary policy is developed we show that the optimal supermajority is higher when dynamic inconsistency is more severe when preferences are more homogeneous and when the economy is less volatile

eliciting information from a large population abstract this paper studies information transmission in social surveys where a welfare maximizing decision maker communicates with a random sample of individuals from a large population who have heterogeneous preferences the population distribution of preferences is unknown and has to be estimated based on answers from the respondents the decision maker cannot identify the true distribution of preferences even if the sample size becomes arbitrarily large since the respondents have incentive to exaggerate their preferences especially as the sample size becomes larger and each respondent has weaker influence on the decision the quality of communication with each respondent may improve as the sample size becomes smaller and thus we identify the trade off between the quality and quantity of communication we show that the decision maker may prefer to sample a smaller number of individuals when the prior is weaker

an incentive compatible condorcet jury theorem we consider a group of individuals who face a binary collective decision each group member holds some private information and all agree about what decision should be taken in each state of nature however the state is unknown and members can differ in their valuations of the two types of mistakes that might occur and in their prior beliefs about the true state for a slightly randomized majority rule we show that informative voting by all voters is the unique nash equilibrium that this equilibrium is strict and that the condorcet asymptotic efficiency result holds in this setting

the curse of uninformed voting an experimental study we study majority voting over two alternatives in small groups individuals have identical preferences but are uncertain about which alternative can better achieve their common interest before voting each individual can obtain information by buying a valuable but imperfect signal about the better alternative voting is either voluntary or compulsory in the compulsory mode each individual must vote between the two alternatives while in the voluntary mode they can also abstain an uninformed random vote generates a negative externality since it may override an informative group decision in pivotal events in our experiments participants in randomly re matched groups obtain information more often with compulsory than voluntary voting and the average number of signals is greater in larger than smaller groups surprisingly uninformed voting is common even in the voluntary mode finally group performance is poor in all treatments indicating the need to reconsider current practice of jury and committee voting

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

when collective ignorance is bliss theory and experiment on voting for learning abstract when do groups and societies choose to be uninformed we study a committee that needs to vote on a reform which will give every member a private state dependent payoff the committee can vote to learn the state at no cost we show that the committee votes not to learn the state whenever independent voters are more divided than partisans this implies that groups with conflicting preferences tend to seek less information a laboratory experiment shows that committees are substantially more likely to vote against acquiring information when the theory predicts them to do so we also observe deviations from theory that are largely explained by cognitive limitations at the same time subjects with more experience or with greater strategic competence are more likely to vote in line with the theory providing evidence for external validity of the model

information aggregation in polls we study information transmission via polling a policymaker polls constitu ents who differ in their information and ideology to determine policy full rev elation is an equilibrium in a poll with a small sample but not with a large one in large polls full information aggregation can arise in an equilibrium where constituents endogenously sort themselves into centrists who respond truth fully and extremists who do not we find polling statistics that ignore strate gic behavior yield biased estimators and mischaracterize the polvs margin of error we construct estimators that account for strategic behavior finally we compare polls and elections jel c42 d83

strategic voting over strategic proposals prior research on strategic voting has reached the conclusion that unanimity rule is uniquely bad it results in destruction of information and hence makes voters worse off we show that this conclusion depends critically on the assumption that the issue being voted on is exogenous that is independent of the voting rule used we depart from the existing literature by endogenizing the proposal that is put to a vote and establish that under many circumstances unanimity rule makes voters better off moreover in some cases unanimity rule also makes the proposer better off even when he has diametrically opposing preferences in this case unanimity is the pareto dominant voting rule voters prefer unanimity rule because it induces the proposing individual to make a more attractive proposal the proposing individual prefers unanimity rule because the acceptance probabilities for moderate proposals are higher we apply our results to jury trials and debt restructuring

the veil of public ignorance abstract a theory of cooperative choice under incomplete information is developed in which agents possess private information at the time of contracting and have agreed on a utilitarian standard of evaluation governing choices under complete information the task is to extend this standard to situations of incomplete information our first main result generalizes harsanyi s j polit econ 63 1955 309 classical result to situations of incomplete information assuming that group preferences satisfy bayesian coherence and interim pareto dominance these axioms are mutually compatible if and only if a common prior exists we argue that this result partly resolves the impossibility of bayesian preference aggregation under complete information

electoral competition with rationally inattentive voters how do voters allocate costly attention to alternative political issues and how does selective ignorance of voters interact with policy design by politicians we address these questions by developing a model of electoral competition with rationally inattentive voters rational inattention amplies the eects of preference intensity because voters pay more attention where stakes are higher the model has many potential applications and those that we discuss in more detail imply that extremist voters are more attentive and inuential public goods are under provided divisive issues receive more attention and less transparent candidates choose more extreme policies endogenous attention can also lead to multiple equilibria explaining how poor voters in developing countries can be politically empowered by welfare programs

ignorance and bias in collective decisions we study theoretically and experimentally a committee with common interests committee members do not know which of two alternatives is the best but each member can acquire privately a costly signal before casting a vote under either majority or unanimity rule in the experiment as predicted by bayesian equilibrium voters are more likely to acquire information under majority rule and attempt to counter the bias in favor of one alternative under unanimity rule as opposed to bayesian equilibrium predictions however many committee members vote when uninformed moreover uninformed voting is strongly associated with a lower propensity to acquire information we show that an equilibrium model of subjective prior beliefs can account for both these phenomena and provides a good overall fit to the observed patterns of behavior both in terms of rational ignorance and biases

abstention ideology and information acquisition we consider an election in which each voter can collect information of different precision voters have asymmetric information and preferences that vary both in terms of ideology and intensity in contrast to all other models of voting with endogenous information in equilibrium voters collect information of different qualities we show that information and abstention are not necessarily negatively correlated some voters are more likely to abstain the more informed they are we also discuss the manner in which incentives to acquire information are non monotonic in terms of both ideology and the level of intensity

converging winds logic hybridization in the colorado wind energy field this study explores the hybridization of field level logics a process that integrates previously incompatible logics within an organizational field through an inductive study of the wind energy f

temporary and permanent changes in consumption growth this paper examines whether demographic variables and other household characteristics are more likely to affect the intercept of the euler equation or the intertemporal elasticity of substitution ise of the household analysis of british data suggests that demographics affect the growth rate of consumption in a purely transitory way while the educational level and the employment status of the wife appear to have a significant effect on the ise the effect of the employment status of the head is more uncertain after taking these differences into account the hypothesis of no excess sensitivity cannot be rejected for households with two earners

precautionary saving in the small and in the large the theory of precautionary saving is shown to be isomorphic to the arrow pratt theory of risk aversion making possible the application of a large body of knowledge about risk aversion to precautionary saving and more generally to the theory of optimal choice under risk in particular a measure of the strength of the precautionary saving motive analogous to the arrow pratt measure of risk aversion is used to establish a number of new propositions about precautionary saving and to give a new interpretation of the dreze modigliani substitution effect copyright 1990 by the econometric society

voluntary environmental agreements good or bad news for environmental protection abstract there has been growing interest in the use of voluntary agreements vas as an environmental policy tool this article uses a simple model to determine whether vas are likely to lead to efficient environmental protection we consider cases where polluters are induced to participate either by a background threat of mandatory controls the stick approach or by cost sharing subsidies the carrot approach the results suggest that the overall impact on environmental quality could be positive or negative depending on a number of factors including the allocation of bargaining power the magnitude of the background threat and the social cost of funds