Before a group can take a decision, its members must agree on a mechanism to aggregate individual preferences. In this paper we present a first experimental test of the effect of participation constraints in such group choice situations. While efficient mechanisms are desirable, Myerson and Satterthwaite (1983) show that participation constraints can prevent their implementation. We experimentally show this effect in the context of social choice mechanisms for the provision of an indivisible public good. We find strong indications that individual preferences for choice rules are sensitive to individual expected payoffs. This highlights the importance of considering participation constraints when designing choice institutions. We contrast the empirical performance of the theoretically optimal mechanism (AGV) with the common Simple Majority voting mechanism (SM). Both do not achieve their theoretical efficiency. The SM is more robust to changes in the environment, but the AGV is more efficient in most treatments. (Coauthor Timo Hoffmann)
Rotterdam Brown Bag Seminars General Economics
- Speaker(s)
- Sander Renes (University of Mannheim, Germany)
- Date
- Wednesday, December 16, 2015
- Location
- Rotterdam