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Optimal two stage committee voting rules

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Author Info
Ian Ayres, Colin Rowat and Nasser Zakariya

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Abstract

We study option management by committee. Analysis is illustrated by tenure decisions. Our innovations are two-fold: we treat the committee's problem as one of social choice, not of information aggregation; and we endogenise the outside option: rejecting a candidate at either the probationary or tenure stage returns the committee to a candidate pool. For committees with N members, we find three key results: (1) a candidate's fate depends only on the behaviour of two `weather-vane' committee members - generalised median voters; (2) enthusiastic assessments by one of these weather-vanes may harm a candidate's chances by increasing others' thresholds for hiring him; and (3) sunk time costs may lead voters who opposed hiring a candidate to favour tenuring him, even after a poor probationary performance. We also characterise the optimal voting rule when N = 2. A patient or perceptive committee does best with a (weak) majority at the hiring stage and unanimity at the tenure stage. An impatient or imperceptive committee does best under a double (weak) majority rule. If particularly impatient or imperceptive, this rule implies that any hire is automatically tenured. Perversely, the performance of a patient, imperceptive committee improves as its perceptiveness further declines.

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Publisher Info
Paper provided by Department of Economics, University of Birmingham in its series Discussion Papers with number 04-23r.

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Length: 37 pages
Date of creation: Jan 2006
Date of revision:
Handle: RePEc:bir:birmec:04-23r

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Postal: Edgbaston, Birmingham, B15 2TT
Web page: http://www.economics.bham.ac.uk
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Related research
Keywords: intertemporal strategic voting; real options; social choice; heterogenous priors; tenure;

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Find related papers by JEL classification:
C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
G12 - Financial Economics - - General Financial Markets - - - Asset Pricing

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