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Identifying Structural Models of Committee Decisions with Heterogeneous Tastes and Ideological Bias

Author

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  • Yonghong An

    (Department of Economics, University of Connecticut)

  • Xun Tang

    (Department of Economics, University of Pennsylvania)

Abstract

We study the nonparametric identification and estimation of a structural model for committee decisions. Members of a committee share a common information set, but differ in ideological bias while processing multiple information sources and in individual tastes while weighing multiple objectives. We consider two cases of the model where committee members have or don't have strategic incentives for making recommendations that conform with the committee decision. For both cases, pure-strategy Bayesian Nash equilibria exist, and we show how to use variations in the common information set to recover the distribution of members' private types from individual recommendation patterns. Building on the identification result, we estimate a structural model of interest rate decisions by the Monetary Policy Committee (MPC) at the Bank of England. We find some evidence that recommendations from external committee members are less distorted by strategic incentives than internal members. There is also evidence that MPC members differ more in their tastes for multiple objectives than in ideological bias.

Suggested Citation

  • Yonghong An & Xun Tang, 2013. "Identifying Structural Models of Committee Decisions with Heterogeneous Tastes and Ideological Bias," PIER Working Paper Archive 13-058, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    • Handle: RePEc:pen:papers:13-058
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    Cited by:

    1. Hamza Bennani, 2016. "Measuring Monetary Policy Stress for Fed District Representatives," Scottish Journal of Political Economy, Scottish Economic Society, vol. 63(2), pages 156-176, May.

    More about this item

    Keywords

    Committee decisions; nonparametric identification; MPC at the Bank of England;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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