Negative Decision Powers and Institutional Equilibrium: Experiments On Blocking Coalitions

Institutional Polycentrism, Entrepreneurs' Social Networks, and New Venture Growth

“…The confluence of multiple weak and inefficient institutions creates an institutional order in which negative change in one rule or sets of rules triggers negative changes in other rules in use, because of the cointegrated and interdependent nature of institutions (Ostrom, 2005a;Sobel & Coyne, 2011). This catalytic process results in negative reinforcement among the institutions (Schneider & Karcher, 2010;Wilson & Herzberg, 2000), increased conflicts among various institutions (Hancke, 2010;Pache & Santos, 2010;Seo & Creed, 2002), and institutional deterioration, leading weak and inefficient institutions to become even weaker and more inefficient (Acemoglu et al, 2005;North & Shirley, 2008). These destructive interdependent processes make the entire institutional order adverse for entrepreneurs, motivating them to build diverse networks rich in structural holes as informal substitute channels for resource acquisition (Batjargal, 2006;Kharkhordin & Gerber, 1994;Sedaitis, 1998;Webb et al, 2009).…”

“…In this way, the negative implications of one type of weak and inefficient institution are less detrimental for entrepreneurs if there are other stronger and more efficient institutions that compensate for the deficiencies (Heberer, 2003). However, when there is a confluence of different types of weak and inefficient formal institutions, the negative synergy makes the entire formal institutional environment highly uncertain for entrepreneurs, because there is little or no formal institutional support of which they can be assured (Boettke, Coyne, & Leeson, 2008;Fogel et al, 2006;Ovaska & Sobel, 2005;Wilson & Herzberg, 2000). The cumulative effects of the negative synergy among weak and inefficient institutions increase the strategic value of diverse entrepreneurial networks (Batjargal, 2000(Batjargal, , 2003a(Batjargal, , 2007aHeberer, 2003;Sedaitis, 1998;Xin & Pearce, 1996).…”

“A Theory Waiting to Be Discovered and Used”: A Reanalysis of Canonical Experiments on Majority-Rule Decision Making

“…First, we searched for previously published committee voting experiments where the voters' (two‐dimensional) ideal points were arranged such that there is no core 8 . Our search revealed eight published experiments: Fiorina and Plott (1978); Laing and Olmsted (1978); McKelvey, Ordeshook, and Winer (1978); McKelvey and Ordeshook (1984); Wilson (1986); Wilson and Herzberg (1987); King (1994); and Endersby (1993). 9 In these papers, 20 simple majority‐rule experiments were reported.…”

Veto power in committees: an experimental study

“…Introducing a veto player yields the theoretical prediction that outcomes will coincide with the veto player's ideal point, as the veto player will simply exercise his veto power until this outcome is achieved. The experiment shows that although outcomes do not fall precisely at the veto player's ideal point, they systematically favor the veto player, in contrast to the control treatment where no single member appears to be advantaged (Wilson and Herzberg 1987). 6 The closest analogue to this in our design is when a non-veto player is the proposer, in which case the veto player can also exercise "negative proposer power," and is predicted to get a larger share than coalition partners in the control treatment.…”

“…We are aware of two spatial voting experiments that provide players with the power to block proposals, but no individual, including the "veto" player, has agenda setting power (Wilson and Herzberg 1987;Haney et al 1992). In the control treatment, absent a veto player and absent a core outcome, with a simple majority voting rule outcomes can, in theory, potentially end up anywhere in the outcome space.…”