MEHMET BAC and PARIMAL KANTI BAG COMMITTEE DECISIONS WITH PARTISANS AND SIDE-TRANSFERS

A dichotomous decision-making context in committees is considered where potential partisan members with predetermined votes can generate inefficient decisions and buy neutral votes. The optimal voting rule minimizing the expected costs of inefficient decisions for the case of a three-member committee is analyzed. It is shown that the optimal voting rule can be non-monotonic with respect to side-transfers: in the symmetric case, majority voting is optimal under either zero, mild or full side-transfer possibilities, whereas unanimity voting may be optimal under an intermediate side-transfer possibility. The side-transfer possibilities depend on the power of partisans (their ability or willingness to pay for neutral votes) relative to the corruptibility of neutral members (personal cost of deliberately casting a ‘wrong’ vote).