Journal of Political Economy Vol. 126 No. 1 2018

Collective Commitment

Christian Roessler¹; Sandro Shelegia^2,3; Bruno Strulovici⁴

¹ California State University, East Bay · ² Universitat Pompeu Fabra · ³ Barcelona School of Economics · ⁴ Northwestern University

Abstract

We consider collective decisions made by agents whose preferences and power depend on past events and decisions. Faced with an inefficient equilibrium and an opportunity to commit to a policy, can the agents reach an agreement on such a policy? We provide a consistency condition linking power structures in the dynamic setting and at the commitment stage. When the condition holds, commitment has no value: any agreement that may be reached at the outset coincides with the equilibrium without commitment. When the condition fails, as in the case of time-inconsistent preferences, commitment can improve outcomes. We discuss several applications.

DOI

10.1086/694294

Volume

126

Issue

1

Pages

347-380

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

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