Colloquium - Distinguished Research Fellow Award Ceremony Dimitrios Xefteris, University of Cyprus

Reforms Supported by All, or Merely by Most?
We consider a group that meets regularly, and each time decides between the status quoand a new potential reform. If, before each vote, a proposer can design a transferscheme to be executed conditional on the acceptance of the reform, then, in theory, the unanimity rule dominates the majority rule both in terms of (utilitarian) efficiency and in terms of (Rawlsian) fairness. By means of a laboratory investigation, we provide novel insights regarding the comparative performance of the two rules. While unanimity delivers consistently fairer outcomes (not only as far as the distribution of benefits of any single reform isconcerned but also in the long run), it is only after a significant number of rounds that it becomes more efficient than the majority rule: during the initial meetings of the committee, participants try to build a reputation as hard negotiators, and several efficient reforms are rejected under unanimity. Our results inform open discussions regarding institutional reform in important standing committees (e.g.,the Council of the European Union).