Voting in Small Committees

A small committee has to approve/reject a project with uncertain return. Members have different preferences: some are value-maximizers, others are biased towards approval. We focus on the efficient use of scarce information when communication is not guaranteed, and we provide insights on the optimal committee composition. We show that the presence of biased members can improve the voting outcome by simplifying the strategies of unbiased members. Thus, heterogeneous committees perform at least as well as homogeneous committees. In particular, when value-maximizers outnumber biased members by one vote, the optimal equilibrium becomes unique. Finally, allowing members to communicate brings no improvement.voting, small committees, committees composition, communication in committees

Voting in Small Committees

We analyze the voting behavior of a small committee that has to approve or reject a proposal whose return is uncertain. Members have heterogenous preferences: some members want to maximize the expected value while other members have a bias toward project approval and ignore their private information. We analyze different voting games when information is costless and communication is not possible, and we provide insights on the optimal composition of these committees. Our main result is that the presence of biased members can improve the voting outcome by simplifying the strategies of unbiased members. Thus, committees with heterogeneous members can function at least as well as homogeneous committees and in some cases they perform better. In particular, when value-maximizing members hold 51% of votes, the socially optimal equilibrium becomes unique.Voting, Small committees.

Pengaruh Corporate Governance terhadap Tax Avoidance pada Perusahaan Pertambangan yang Terdaftar di Bei

This study aims to examine the effect of corporate governance on tax avoidance. This research isconducted on mining companies listed in BEI period 2012-2015. The method used purposivesampling and obtained 10 companies. The data used is secondary data can be downloadedwww.idx.co.id. The results of this study conclude ROA does not affect tax avoidance, because thecompany tries to obtain high profit as an indicator of company performance. Institutional ownership has no effect, it may not be able to supervise any management decision. Managerialownership is influential, it is possible that managerial ownership can increase optimal supervision. The board of independent commissioners is influential, indicating the greater the composition of the commissioner the better the performance. Audit committee is influential, indicatingthe number of audit committees able to improve supervision on management. Audit qualityinfluences indicates that the audit services used can reduce tax avoidance measures

Committee Size and Smart Growth: An Optimal Solution

Wisconsin is one of many states that have enacted a “Smart Growth Initiative” law that requires inclusion of the public in the creation and development of a Comprehensive Plan. One implication of public participation is the strategic development of a comprehensive planning committee. Two crucial decisions occur when the committee is formed: the size of the committee and the composition of the committee. This paper models a relation between committee size and the accuracy of plan, as well as the relationship between the inclusion of experts, whether paid consultants or planners, and the quality of the outcome. Based on a survey of committee members, we test the relationship between the participants’ observations of quality and group size and composition, analyzing the tradeoff between the size of the group with the perception of quality of the decision

Do recruiters prefer applicants with similar skills? Evidence from a randomized natural experiment

In this paper we examine the potential existence of a similar-to-me effect in terms of skills between recruiters and applicants. Using evidence from entry exams to the Spanish Judiciary, where applicants are randomly assigned across evaluation committees, we find that committee members tend to be more demanding at those stages where they are more knowledgeable. As a result, applicants who excel in the same dimensions as recruiters are more likely to be hire

Theoretical Aspects of Collective Decision Making - Survey of the Economic Literature

The article aims at surveying the economic literature related to collective decision making. In order to do so it proposes a coherent framework allowing for a structured analysis of the factors influencing the works of a committee. These factors are divided into external ( shaped outside of the committee e.g. by law) and internal ones (related to the composition of the committee and interactions between its members). The survey of the general economic literature related to collective decision making presented within the proposed framework yields interesting suggestions for further research, including the consequences for the shape of monetary policy committeesArtykuł ma na celu dokonanie przeglądu literatury ekonomicznej z zakresu kolektywnego podejmowania decyzji. W tym celu zaproponowano ramy pozwalające na ustrukturyzowaną analizę czynników wpływających na pracę organu kolektywnego (rady). Dokonano podziału tych czynników na zewnętrzne (tzn. kształtowane poza samą radą, np. przez wymogi prawne) oraz wewnętrzne (związane ze składem rady oraz interakcjami między jej członkami). Dokonany w ramach zaproponowanej struktury przegląd literatury ogólnoekonomicznej dotyczącej kolektywnego podejmowania decyzji pozwala na zaproponowanie interesujących kierunków dalszych badań, w tym konsekwencji dla kształtu rad polityki pieniężnej

Symmetric and Asymmetric Committees

This paper studies the assignment of decision makers to two committees that make decisions by a simple majority rule. There is an even number of decision makers at each of various skill levels and each committee has an odd number of members. Surprisingly, even with the symmetric assumptions in the spirit of Condorcet, a symmetric composition of committees is not always optimal. In other words, decision makers with different skill levels should not generally be evenly divided among the committees. However, in the special case of only two skill levels, it is optimal to compose the committees evenly.committees, collective decision making, simple majority rule

Board committees, CEO compensation, and earnings management

We analyze the effect of committee formation on how corporate boards perform two main functions: setting CEO pay and overseeing the financial reporting process. The use of performance-based pay schemes induces the CEO to manipulate earnings, which leads to an increased need for board oversight. If the whole board is responsible for both functions, it is inclined to provide the CEO with a compensation scheme that is relatively insensitive to performance in order to reduce the burden of subsequent monitoring. When the functions are separated through the formation of committees, the compensation committee is willing to choose a higher pay-performance sensitivity as the increased cost of oversight is borne by the audit committee. Our model generates predictions relating the board committee structure to the pay-performance sensitivity of CEO compensation, the quality of board oversight, and the level of earnings management

Symmetric and Asymmetric Committees

This paper studies the assignment of decision makers to two committees that make decisions by a simple majority rule. There is an even number of decision makers at each of various skill levels and each committee has an odd number of members. Surprisingly, even with the symmetric assumptions in the spirit of Condorcet, a symmetric composition of committees is not always optimal. In other words, decision makers with different skill levels should not generally be evenly divided among the committees. However, in the special case of only two skill levels, it is optimal to compose the committees evenly.collective decision making, simple majority rule, committees