Collective Choice in Dynamic Public Good Provision: Real versus Formal Authority

T. Renee Bowen, George Georgiadis and Nicolas Lambert
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George Georgiadis: Northwestern University

Research Papers from Stanford University, Graduate School of Business

Abstract: Two heterogeneous agents exert effort over time to complete a project and collectively decide its scope. A larger scope requires greater cumulative effort and delivers higher benefits upon completion. To study the scope under collective choice, we derive the agents' preferences over scopes. The efficient agent prefers a smaller scope, and preferences are time-inconsistent: as the project progresses, the efficient agent's preferred scope shrinks, whereas the inefficient agent's preferred scope expands. In equilibrium without commitment, the effcient agent obtains his ideal project scope with either agent as dictator and under unanimity. In this sense, the efficient agent always has real authority.

JEL-codes: C73 D70 D78 H41 (search for similar items in EconPapers)
Date: 2015-12
New Economics Papers: this item is included in nep-cdm, nep-hrm and nep-mic
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Related works:
Working Paper: Collective Choice in Dynamic Public Good Provision: Real versus Formal Authority (2016)
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