EconPapers    
Economics at your fingertips  
 

Club-in-the-club: reform under unanimity

Erik Berglöf, Mike Burkart (), Guido Friebel () and Elena Paltseva

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: In many organizations, decisions are taken by unanimity giving each member veto power. We analyze a model of an organization in which members with heterogenous productivity privately contribute to a common good. Under unanimity, the least efficient member imposes her preferred effort choice on the entire organization. The threat of forming an “inner organization” can undermine the veto power of the less efficient members and coerce them to exert more effort. We also identify the conditions under which the threat of forming an inner organization is executed. Finally, we show that majority rules effectively prevent the emergence of inner organizations.

JEL-codes: D2 D7 P4 (search for similar items in EconPapers)
Date: 2012-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Published in Journal of Comparative Economics, August, 2012, 40(3), pp. 492-507. ISSN: 0147-5967

Downloads: (external link)
http://eprints.lse.ac.uk/69541/ Open access version. (application/pdf)

Related works:
Journal Article: Club-in-the-club: Reform under unanimity (2012) Downloads
Working Paper: Club-in-the-Club: Reform under Unanimity (2009) Downloads
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:ehl:lserod:69541

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().

 
Page updated 2019-12-26
Handle: RePEc:ehl:lserod:69541