Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/227273 
Year of Publication: 
2020
Series/Report no.: 
IZA Discussion Papers No. 13746
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Leaks are pervasive in politics. Hence, many committees that nominally operate under secrecy de facto operate under the threat that information might be passed on to outsiders. We study theoretically and experimentally how this possibility affects the behavior of committee members and the decision-making accuracy. Our theoretical analysis generates two major predictions. First, a committee operating under the threat of leaks is equivalent to a formally transparent committee in terms of the probabilities of project implementation as well as welfare (despite differences in individual voting behavior). Second, the threat of leaks causes a committee to recommend rejection of a project whenever precise information has been shared among committee members. As a consequence, a status-quo bias arises. Our laboratory results confirm these predictions despite subjects communicating less strategically than predicted.
Subjects: 
committee decision-making
strategic communication
voting
leaks
transparency
monetary policy committees
information aggregation
JEL: 
C92
D71
D82
J45
Document Type: 
Working Paper

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