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

50 Pages Posted: 14 Oct 2013

See all articles by Yonghong An

Yonghong An

Texas A&M University

Xun Tang

University of Pennsylvania - Department of Economics

Date Written: October 7, 2013

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.

Keywords: Committee decisions, nonparametric identification, MPC at the Bank of England

JEL Classification: C14, D71

Suggested Citation

An, Yonghong and Tang, Xun, Identifying Structural Models of Committee Decisions with Heterogeneous Tastes and Ideological Bias (October 7, 2013). PIER Working Paper No. 13-058. Available at SSRN: https://ssrn.com/abstract=2340104 or http://dx.doi.org/10.2139/ssrn.2340104

Yonghong An

Texas A&M University ( email )

3051 Allen Building
4428 TAMU
College Station, TX Texas 77843
United States

Xun Tang (Contact Author)

University of Pennsylvania - Department of Economics ( email )

Ronald O. Perelman Center for Political Science
133 South 36th Street
Philadelphia, PA 19104-6297
United States
215-898-7409 (Phone)
215-573-2057 (Fax)

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