EconPapers    
Economics at your fingertips  
 

Majority Rules and Incentives

Bård Harstad

The Quarterly Journal of Economics, 2005, vol. 120, issue 4, 1535-1568

Abstract: 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.

Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (33)

Downloads: (external link)
http://hdl.handle.net/10.1162/003355305775097551 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:qjecon:v:120:y:2005:i:4:p:1535-1568.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

The Quarterly Journal of Economics is currently edited by Robert J. Barro, Lawrence F. Katz, Nathan Nunn, Andrei Shleifer and Stefanie Stantcheva

More articles in The Quarterly Journal of Economics from President and Fellows of Harvard College
Bibliographic data for series maintained by Oxford University Press ().

 
Page updated 2025-03-24
Handle: RePEc:oup:qjecon:v:120:y:2005:i:4:p:1535-1568.