Homogeneity vs. Heterogeneity in Collaborative Decision-Making: A Theoretical Model on Specialisation in Committees

Diversity in teams is an advocated subject as it would reduce free riding and result in better decision-making. This paper analyses differences in decision efficiency and quality between homogeneous and heterogeneous committees under different voting rules. I employ a sequential model where committee members can acquire endogenous information about a project with an unknown profitability before voting on its implementation. I find that members in a homogeneous committee vote uninformed, independent of the voting rule. In a heterogeneous committee the voting rule determines which type of committee member is pivotal and acquires information. A majority voting rule results in a range of projects to be implemented while a unanimity voting rule allows only highly profitable projects to be implemented. Furthermore, committee size is negatively related with information acquisition in equilibrium. This paper contributes to the theoretical literature on team and committee strategic decision making by describing the influence of the composition of the team and the selected voting rule on information acquisition and project implementation.