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Collective Commitment

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  • Christian Roessler
  • Sandro Shelegia
  • Bruno Strulovici

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.

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  • Christian Roessler & Sandro Shelegia & Bruno Strulovici, 2018. "Collective Commitment," Journal of Political Economy, University of Chicago Press, vol. 126(1), pages 347-380.
    • Handle: RePEc:ucp:jpolec:doi:10.1086/694294
    DOI: 10.1086/694294
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    More about this item

    JEL classification:

    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General

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