Do We Need a Committee?

31 Pages Posted: 19 Jan 2024

See all articles by Hans Gersbach

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Research; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Akaki Mamageishvili

Offchain Labs

Oriol Tejada

University of Barcelona

Abstract

We study committee design when a homogeneous community is uncertain about which alternative is correct, individuals can acquire costly information about the state of the world, and the decision must be taken via voting with the majority rule. We assume verifiability of costs and cost sharing, which are realistic assumptions in many applications, e.g. if the time spent in learning is determined or recorded, or if reports with a certain content have to be produced.  For a family of information cost functions, we show that the optimal committee size depends on the (local and global) properties of the cost function. If acquiring a bit of information is relatively cheap, the optimal committee typically comprises more than one member and three, or sometimes more, members are sufficient. In other cases, vote delegation to a single individual is optimal, and hence no committee is needed at all. Our results may rationalize the widespread use of small committees in politics and companies for  decision-making.

Keywords: voting, committee, information acquisition, monetary transfers, majority rule, incomplete social contracts

Suggested Citation

Gersbach, Hans and Mamageishvili, Akaki and Tejada, Oriol, Do We Need a Committee?. Available at SSRN: https://ssrn.com/abstract=4699709 or http://dx.doi.org/10.2139/ssrn.4699709

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Research ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland
+41 44 632 82 80 (Phone)
+41 44 632 18 30 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Akaki Mamageishvili

Offchain Labs ( email )

Zurich
Switzerland

Oriol Tejada (Contact Author)

University of Barcelona ( email )

Gran Via de les Corts Catalanes, 585
Barcelona, 08007
Spain

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