Analysis of Collective Decision-Making

Analysis of collective decision-making (JEL D7) studies how groups make decisions — voting, social choice, public choice, and collective action.

Scope

It covers social choice and voting, public-choice analysis of politics, rent-seeking, and the problem of collective action.

Sub-topics

• General
• Social Choice • Clubs • Committees • Associations
• Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior
• Bureaucracy • Administrative Processes in Public Organizations • Corruption
• Conflict • Conflict Resolution • Alliances • Revolutions
• Positive Analysis of Policy Formulation and Implementation
• Other

Core questions

• How do groups make collective decisions?
• How do voting rules aggregate preferences?
• Why is collective action hard to achieve?
• How do political decisions follow economic logic?

Key concepts

• Social choice
• Voting rules
• Public choice
• Collective action
• Free-riding
• Rent-seeking

Key theories

Social choice

Arrow analysed the aggregation of preferences and its impossibility results.

Public choice

Buchanan and Tullock applied economic reasoning to constitutions and collective decisions.

Collective action

Olson showed that shared interests do not automatically yield collective action because of free-riding.

History

Collective decision-making combines social-choice theory (Arrow), public choice (Buchanan, Tullock), and collective-action theory (Olson).

Debates

Can collective choice be rational?

Whether group decisions can consistently reflect members' preferences given impossibility results and free-riding.

Key figures

• Kenneth Arrow
• James Buchanan
• Gordon Tullock
• Mancur Olson

Seminal works

• arrow-1951
• buchanan-tullock-1962
• olson-1965

Frequently asked questions

What is the free-rider problem?

The tendency for individuals to under-contribute to collective goods because they can benefit without bearing the cost (Olson).