Why a Group Needs a Leader: DecisionMaking and Debate in Committees

I develop a model of group decision-making, in which a committee generates proposals and holds open discussions, but the ultimate decision is either taken by a leader (decision by authority) or by majority vote. Optimal communication processes are studied that combine both cheap talk statements (proposals) and costly state verification (discussions). I show that by favouring one particular agent - the leader - authoritative decision-making reduces rent-seeking discussions and often results in a higher decision-quality relative to majority decision-making. Institutions which guarantee a right to voice by separating the roles of decision maker and discussion leader may further improve efficiency.

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