Optimal Two Stage Committee Voting Rules

University of Birmingham Economics Working Paper No. 04-23RR

31 Pages Posted: 17 Nov 2004

See all articles by Ian Ayres

Ian Ayres

Yale University - Yale Law School; Yale University - Yale School of Management

Colin Rowat

University of Birmingham - Department of Economics

Nasser Zakariya

Harvard University

Date Written: March 21, 2007

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 information aggregation; and we endogenise the outside option: rejecting a candidate at either the probationary or tenure stage return the committee to a candidate pool. For committees with N members, we find: (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 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.

Keywords: strategic voting, real options, tenure

JEL Classification: C73, D71, D72, D80, G12

Suggested Citation

Ayres, Ian and Rowat, Colin and Zakariya, Nasser, Optimal Two Stage Committee Voting Rules (March 21, 2007). University of Birmingham Economics Working Paper No. 04-23RR. Available at SSRN: https://ssrn.com/abstract=619002 or http://dx.doi.org/10.2139/ssrn.619002

Ian Ayres

Yale University - Yale Law School ( email )

P.O. Box 208215
New Haven, CT 06520-8215
United States
203-432-7101 (Phone)
203-432-2592 (Fax)

Yale University - Yale School of Management

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

Colin Rowat (Contact Author)

University of Birmingham - Department of Economics ( email )

Economics Department
Birmingham, B15 2TT
United Kingdom
+44 121 414 3754 (Phone)
+44 121 414 7377 (Fax)

Nasser Zakariya

Harvard University ( email )

Cambridge, MA 02138
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
140
rank
202,152
Abstract Views
2,901
PlumX Metrics