Decision Costs in Coalition Formation

Abstract

Choices made in coalition formation are costly to participants, complex, and difficult to measure with precision because observable coalitions are multi-person, non-zero-sum games. At least eight decision costs are included in the process. The purpose of this paper is to identify them and to examine their usefulness in explaining coalition formation. Decisions include: (1) information costs, (2) responsibility costs, (3) intergame costs, (4) costs of division of payoffs, (5) dissonance costs (6) inertia costs, (7) time costs, and (8) persuasion costs.Coalition building is an essential aspect of decision making within any political system. Whether one is studying the behavior of a municipal planning commission, a committee or sub-committee of a legislative body, the United Nations Security Council, or any other decision-making institution in which more than one person is involved in reaching a decision, the essential problem is often one of establishing a winning coalition within the entire group membership. A winning coalition is any portion of the group that can decide to do or not to do something that is on the agenda of the group and over which it has competent authority. The requirements of what constitutes a winning coalition are determined by the formal and informal rules of the game. Most commonly, one of the rules is that a winning coalition must consist of one-half the members of the group plus one and this assumption is made for purposes of this paper. The size of the coalition needed is important for individual and coalition strategies, but it is not important conceptually. That is, the problems involved in securing a winning coalition on the United States Supreme Court when only four votes are needed in order to agree to hear a case affects the strategy of the members of the court, but is of no theoretical importance to coalition formation.