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Comparing Centralized and Decentralized Institutions: A Reply to Schwartz and Tomz

Published online by Cambridge University Press:  01 August 2014

Jonathan Bendor
Affiliation:
Stanford University
Dilip Mookherjee
Affiliation:
Boston University
Corresponding

Abstract

Schwartz and Tomz (1997) have correctly pointed out an error in our 1987 article: We had neglected to analyze how changes in group composition improve the performance of centralized institutions over time. The change affects only the case of perfect monitoring, however. We argue, moreover, that even in this special context, our main qualitative conclusion—that the centralized structure has no positive advantage over the decentralized one—continues to hold. We reach different conclusions about the relative roles of the two institutions, partly because we had in mind a positive interpretation, whereas Schwartz and Tomz select a normative interpretation of the issue of institutional choice. Finally, we believe that imperfect monitoring is essential to the theory, in order to derive conclusions that are not driven by artifacts of the model or by arbitrary equilibrium selections.

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Copyright
Copyright © American Political Science Association 1997

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References

Axelrod, Robert. 1984. The Evolution of Cooperation. New York: Basic Books.Google Scholar
Bendor, Jonathan, and Mookherjee, Dilip. 1987. “Institutional Structure and the Logic of Ongoing Collective Action.” American Political Science Review 87(03):129–54.CrossRefGoogle Scholar
Schwartz, Edward, and Tomz, Michael. 1997. “The Long-Run Advantages of Centralization for Collective Action: A Comment on Bendor and Mookherjee.” American Political Science Review 92(09):685–93.CrossRefGoogle Scholar
Simon, Herbert. 1969. The Sciences of the Artificial. Cambridge, MA: MIT Press.Google Scholar
Taylor, Michael. 1976. Anarchy and Cooperation. New York: Wiley.Google Scholar

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