Group Formation and Governance

Authors


  • Ludovic Renou, Department of Economics, University of Leicester, LE1 7RH, Leicester, UK (lr78@le.ac.uk).

  • I am grateful to Pierpaolo Battigalli and Gianni De Fraja for numerous conversations. I also thank the Associate Editor and a referee for insightful comments.

Abstract

This paper studies the impact of the governance of a group, whether be it unanimity, simple majority, or qualified majority, on its (endogenously derived) size, composition, and inclination to change the status quo. Somewhat surprisingly, we show that not only unanimity might favor the formation of larger groups than majority, but also a change of status quo.

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