Working Paper: CEPR ID: DP6168
Authors: Wouter Dessein
Abstract: I develop a model of group decision-making, in which a committee generates proposals and holds open discussions, but the ultimate decision is either taken by a leader (decision by authority) or by majority vote. Optimal communication processes are studied that combine both cheap talk statements (proposals) and costly state verification (discussions). I show that by favouring one particular agent ? the leader ? authoritative decision-making reduces rent-seeking discussions and often results in a higher decision-quality relative to majority decision-making. Institutions which guarantee a "right to voice" by separating the roles of decision maker and discussion leader may further improve efficiency.
Keywords: Authority; Committees; Debate; Group Decision-Making; Leadership; Majority Rule
JEL Codes: D71; D72; D82; D83
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| authoritative decision-making (D70) | higher decision quality (L15) |
| authoritative decision-making (D70) | reduced rent-seeking discussions (D72) |
| leader's authority (M54) | efficiency of communication (L96) |
| leader's authority (M54) | quality of decisions (D79) |
| leader's predisposition towards their own ideas (D70) | better outcomes (I14) |