Collective commitment

Christian Roessler, Sandro Shelegia and Bruno Strulovici

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We consider collective decisions made by agents whose preferences and power depend on past events and decisions. Faced with an inecient 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.

JEL-codes: C70 D70 H41 (search for similar items in EconPapers)
Date: 2016-07
New Economics Papers: this item is included in nep-cdm and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Collective Commitment (2018)
Working Paper: Collective Commitment (2016)
Working Paper: Collective Commitment (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1540

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