The Politics of Compromise
An organization must select among competing projects that differ in their payoff consequences for its members. Each agent chooses a project and exerts effort affecting its completion time. When one or more projects are complete, the agents select which one to adopt. The selection rule for multiple p...
| Main Authors: | , |
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| Other Authors: | |
| Format: | Article |
| Language: | en_US |
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American Economic Association
2017
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| Online Access: | http://hdl.handle.net/1721.1/108664 https://orcid.org/0000-0002-9150-2334 |
| _version_ | 1811091210574495744 |
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| author | Bonatti, Alessandro Rantakari, Heikki |
| author2 | Massachusetts Institute of Technology. Department of Economics |
| author_facet | Massachusetts Institute of Technology. Department of Economics Bonatti, Alessandro Rantakari, Heikki |
| author_sort | Bonatti, Alessandro |
| collection | MIT |
| description | An organization must select among competing projects that differ in their payoff consequences for its members. Each agent chooses a project and exerts effort affecting its completion time. When one or more projects are complete, the agents select which one to adopt. The selection rule for multiple projects that maximizes ex post welfare leads to inefficiently high polarization; rules that favor later proposals improve upon ex post optimal selections. The optimal degree of favoritism increases in the cost of effort and discount rate. This trade-off informs the design of process rules in standard-setting organizations and helps explain their performance. (JEL C78, D23, D71, D72, D83, L15) |
| first_indexed | 2024-09-23T14:58:41Z |
| format | Article |
| id | mit-1721.1/108664 |
| institution | Massachusetts Institute of Technology |
| language | en_US |
| last_indexed | 2024-09-23T14:58:41Z |
| publishDate | 2017 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | mit-1721.1/1086642022-10-01T23:44:34Z The Politics of Compromise Bonatti, Alessandro Rantakari, Heikki Massachusetts Institute of Technology. Department of Economics Sloan School of Management Bonatti, Alessandro Rantakari, Heikki An organization must select among competing projects that differ in their payoff consequences for its members. Each agent chooses a project and exerts effort affecting its completion time. When one or more projects are complete, the agents select which one to adopt. The selection rule for multiple projects that maximizes ex post welfare leads to inefficiently high polarization; rules that favor later proposals improve upon ex post optimal selections. The optimal degree of favoritism increases in the cost of effort and discount rate. This trade-off informs the design of process rules in standard-setting organizations and helps explain their performance. (JEL C78, D23, D71, D72, D83, L15) 2017-05-04T16:52:41Z 2017-05-04T16:52:41Z 2016-02 Article http://purl.org/eprint/type/JournalArticle 0002-8282 http://hdl.handle.net/1721.1/108664 Bonatti, Alessandro and Rantakari, Heikki. “The Politics of Compromise.” American Economic Review 106, no. 2 (February 2016): 229–259. © 2016 American Economic Association https://orcid.org/0000-0002-9150-2334 en_US http://dx.doi.org/10.1257/aer.20140316 American Economic Review Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use. application/pdf American Economic Association American Economic Association |
| spellingShingle | Bonatti, Alessandro Rantakari, Heikki The Politics of Compromise |
| title | The Politics of Compromise |
| title_full | The Politics of Compromise |
| title_fullStr | The Politics of Compromise |
| title_full_unstemmed | The Politics of Compromise |
| title_short | The Politics of Compromise |
| title_sort | politics of compromise |
| url | http://hdl.handle.net/1721.1/108664 https://orcid.org/0000-0002-9150-2334 |
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