Majority Rule or Dictatorship? How Collective-Choice Rules Affect Institutional Design and Cooperation

Collective-choice rules aggregate individual choices into a collective decision. This study provides experimental evidence on how collective-choice rules affect institutional design and cooperation behavior in a social dilemma situation. In our setting, groups decide repeatedly on whether to establish any institution, and if so, which institution(s), to sustain cooperation in a public goods game. Groups decide via majority voting, dictatorship, or rotating dictatorship. Our main findings are: (1) collective-choice rules do not affect which types of institutions people prefer; (2) Institutional choices made via majority voting or a fixed dictator are more stable over time than those chosen by rotating dictators; (3) The instability of institutions is associated with lower cooperation levels; (4) Given the set of institutions, democratic collective-choice rules do not lead to higher cooperation levels than a non-democratic rule