TY - JOUR
T1 - Group decision-making in the shadow of disagreement
AU - Eliaz, Kfir
AU - Ray, Debraj
AU - Razin, Ronny
N1 - Funding Information:
We thank Eddie Dekel, Wolfgang Pesendorfer, Muhamet Yildiz and two anonymous referees for useful comments. Support from the National Science Foundation under Grant no. 0421852 is gratefully acknowledged.
PY - 2007/1
Y1 - 2007/1
N2 - A model of group decision-making is studied, in which one of two alternatives must be chosen. While agents differ in their preferences over alternatives, everybody prefers agreement to disagreement. Our model is distinguished by three features: private information regarding valuations, differing intensities in preferences, and the option to declare neutrality to avoid disagreement. There is always an equilibrium in which the majority is more aggressive in pushing its alternative, thus enforcing their will via both numbers and voice. However, under general conditions an aggressive minority equilibrium inevitably makes an appearance, provided that the group is large enough. Such equilibria invariably display a "tyranny of the minority": the increased aggression of the minority always outweighs their smaller number, leading to the minority outcome being implemented with larger probability than the majority alternative. We fully characterize the asymptotic behavior of this model as group size becomes large, and show that all equilibria must converge to one of three possible limit outcomes.
AB - A model of group decision-making is studied, in which one of two alternatives must be chosen. While agents differ in their preferences over alternatives, everybody prefers agreement to disagreement. Our model is distinguished by three features: private information regarding valuations, differing intensities in preferences, and the option to declare neutrality to avoid disagreement. There is always an equilibrium in which the majority is more aggressive in pushing its alternative, thus enforcing their will via both numbers and voice. However, under general conditions an aggressive minority equilibrium inevitably makes an appearance, provided that the group is large enough. Such equilibria invariably display a "tyranny of the minority": the increased aggression of the minority always outweighs their smaller number, leading to the minority outcome being implemented with larger probability than the majority alternative. We fully characterize the asymptotic behavior of this model as group size becomes large, and show that all equilibria must converge to one of three possible limit outcomes.
KW - Decision-making
KW - Groups
KW - Pivotality
KW - Preference intensities
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U2 - 10.1016/j.jet.2005.07.008
DO - 10.1016/j.jet.2005.07.008
M3 - Article
AN - SCOPUS:33845588328
SN - 0022-0531
VL - 132
SP - 236
EP - 273
JO - Journal of Economic Theory
JF - Journal of Economic Theory
IS - 1
ER -