Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/73515
Authors: 
Gantner, Anita
Höchtl, Wolfgang
Sausgruber, Rupert
Year of Publication: 
2011
Series/Report no.: 
Working Papers in Economics and Statistics 2011-15
Abstract: 
This paper studies the vulnerability of the pivotal mechanism with respect to manipulation by groups. In a lab experiment, groups decide on the implementation of various alternatives, some of which imply opposite interests for the two subgroups. We investigate the occurrence of tacit and explicit collusion by allowing for communication within subgroups in one treatment and prohibiting it in another. Even though all agents' preferences are common knowledge and there exists a simple symmetric collusive strategy for one subgroup, we find little evidence for tacit collusion, not even with increasing experience. Only when explicit communication is allowed, collusion is established, and it becomes even more pronounced over time.
Subjects: 
Collective Decision Making
Pivotal Mechanism
Collusion
JEL: 
D71
D61
C92
Document Type: 
Working Paper

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