Committees and Reciprocity

34 Pages Posted: 28 Feb 2006

See all articles by Volker Hahn

Volker Hahn

University of Konstanz

Felix Muehe

ETH Zürich - Center for Economic Research

Date Written: February 2006

Abstract

In this paper we examine the impact of reciprocal motives on decision-making in a committee. We show that any voting behavior that constitutes an equilibrium without reciprocity also represents an equilibrium when people are reciprocally motivated. If reciprocal motives are important, additional equilibria may exist. All of them involve lower material payoffs and lower overall utility for a large majority of members compared to the equilibria where the voting behavior of Nash equilibria is chosen. We discuss mechanisms, for example incentive contracts, that may eliminate the negative effects of reciprocity. Moreover, in a dynamic framework we show that psychological log-rolling equilibria may exist, where some agents perceive others as friendly and therefore accept projects that are detrimental to themselves but beneficial to others.

Keywords: reciprocity, committees, log-rolling, voting

JEL Classification: D71, C70, D63

Suggested Citation

Hahn, Volker and Muehe, Felix, Committees and Reciprocity (February 2006). Available at SSRN: https://ssrn.com/abstract=884368 or http://dx.doi.org/10.2139/ssrn.884368

Volker Hahn

University of Konstanz ( email )

Box 143
Konstanz, 78457
Germany

Felix Muehe (Contact Author)

ETH Zürich - Center for Economic Research ( email )

Weinbergstr. 35
Zurich 8092
Switzerland
+41 44 632 8497 (Phone)
+41 44 632 1867 (Fax)

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