Abstract
Policy decisions often involve a repeated proofreading process before implementation. We present a dynamic model of proofreading decisions by a heterogeneous committee before implementing a risky policy. The proofreading process is necessary because the risky policy contains an unknown number of errors. Proofreading continues as long as a qualified majority votes for continuation. Once the proofreading process ends, and the policy is implemented, members receive heterogeneous penalties based on the remaining errors. We characterize the optimal voting rule given the costs and penalties for the committee. We find that any qualified voting rule, including majority rule, for proofreading is inefficient.
| Original language | English |
|---|---|
| Pages (from-to) | 1-17 |
| Number of pages | 17 |
| Journal | Global Economic Review |
| Volume | 51 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 2022 |
Bibliographical note
Funding Information:Duk Gyoo Kim greatly acknowledges financial support from the Deutsche Forschungsgemeinschaft (DFG, German Research Foundation)–Project-ID 139943784–SFB 884 at the University of Mannheim. Jinhyuk Lee's work is supported by a Korea University Grant (K1823451). Euncheol Shin's work is supported by KAIST Faculty Research Grant. We thank Hans Peter Grüner, Jinhee Jo, Charles Louis-Sidois, and Kirill Pogorelskiy for their helpful suggestions and comments. All the authors equally contributed to this paper.
Publisher Copyright:
© 2022 Institute of East and West Studies, Yonsei University, Seoul.
Keywords
- Collective decision
- optimal proofreading
- optimal voting rule
- qualified majority rule
- representative agent
ASJC Scopus subject areas
- Business and International Management
- Economics, Econometrics and Finance(all)
- Political Science and International Relations