American Economic Review Vol. 91 No. 5 2001

Conflicts and Common Interests in Committees

Hao Li¹; Sherwin Rosen²; Wing Suen³

¹ Department of Economics, University of Toronto, 150 St. George Street, Toronto, Ontario M5S 3G7, Canada. · ² Department of Economics, University of Chicago, 1126 East 57th Street, Chicago, IL 60637. · ³ School of Economics and Finance, University of Hong Kong, Pokfulam Road, Hong Kong.

Abstract

Committees improve decisions by pooling members' independent information, but promote manipulation, obfuscation, and exaggeration of private information when members have conflicting preferences. Committee decision procedures transform continuous data into ordered ranks through voting. This coarsens the transmission of information, but controls strategic manipulations and allows some degree of information sharing. Each member becomes more cautious in casting the crucial vote than when he alone makes the decision based on own information. Increased quality of one member's information results in his casting the crucial vote more often. Committees make better decisions for members than does delegation.

DOI

10.1257/aer.91.5.1478

Volume

91

Issue

5

Pages

1478-1497

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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