Mechanism Design with Public Goods: Committee Karate, Cooperative Games, and the Control of Social Decisions through Subcommittees

Abstract

Axioms from social choice theory and the core of cooperative games in effectiveness form are used to design an organization that influences a voting group to choose the alternative preferred by a designer. The designer has information about individual preferences and can dictate organization but cannot dictate choice. The designer's influence works through decision centers (subcommittees). Subcommittee memberships, subcommittee separation, the alternatives available to the subcommittees, the chairpersons and voting rules can be used to create games with appropriate configurations of cores that result in group decisions according to the designer's wishes. The institutions leave considerable flexibility to subcommittee decisions and appear to be fair. Manipulation is not detected. Core alternatives emerge as the group choice. Conflicting individual preferences enable organizational structures such that a wide range of alternative can be made the solution. Experiments demonstrate that the resulting model is a very accurate predictor of the group choice.

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