Collective Commitment

Christian Roessler, Sandro Shelegia and Bruno Strulovici

Journal of Political Economy, 2018, vol. 126, issue 1, 347 - 380

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.

Date: 2018
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Related works:
Working Paper: Collective Commitment (2016)
Working Paper: Collective commitment (2016)
Working Paper: Collective Commitment (2015)
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