Time-Consistent Majority Rules with Interdependent Preferences

This paper studies a collective decision problem in which a group of individuals with interdependent preferences vote whether or not to implement a project of unknown value. A utilitarian social planner aggregates these votes according to a majority rule; but, unlike what is commonly assumed in the literature, the planner is unable to commit to the rule before votes are cast. Characterizing the time-consistent majority rules, we find that the ex ante optimal majority rule is time-consistent; but for sufficiently homogenous groups with strong interdependencies, there is an ex ante suboptimal rule that is also time-consistent. Thus, in the absence of an ex ante commitment, the social planner would form a relatively heterogeneous group with weak interdependencies to control strategic voting. This finding contrasts with the observation that under an exogenous majority rule, the social planner would form the most homogenous group. Applications to trial jury and advisory committee formations as well as academic hiring decisions are discussed. JEL Classifications: C7, D7