Risk and Insurance Workshop
Series Contact: Ahmad Peivandi
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ABSTRACT: In this paper we examine a class of dynamic decision-making processes that involve endogenous commitment. Our analysis is relevant to group decision making settings as well as to hierarchical decision making settings in which, for example, subordinates attempt to influence their superiors. An inability to commit leads to the possibility of strategic delay by decision participants who differ in their preferences and are limited by the resources they can allocate to influencing decisions. We focus on sources of delay caused by the strategic interaction of decision makers over time and find that the opportunity to delay decisions leads the participants to sometimes act against their short-run interests. Two classes of activity of this type emerge which we refer to as focusing and pinning. We also explore how strategic delay alters the benefits from agenda setting.