DP10912 Voting and contributing when the group is watching

Author(s): Emeric Henry, Charles Louis-Sidois
Publication Date: November 2015
Keyword(s): image concern, information aggregation, public good, voting
JEL(s): D71, D72, H41
Programme Areas: Public Economics, Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=10912

Members of groups and organizations often have to decide on rules that regulate their contributions to common tasks. They typically differ in their propensity to contribute and often care about the image they project, in particular want to be perceived by other group members as being high contributors. In such environments we study the interaction between the way members vote on rules and their subsequent contribution decisions. We show that multiple norms can emerge. We draw surprising policy implications, on the effect of group size, of supermajority rules and of the observability of actions.