Effect of Three Voting Rules on Resource Allocation Decisions

This paper is concerned with the effect of the voting rule adopted by a capital budgeting committee on the allocation of resources among divisions. The results of a laboratory experiment indicate that different voting rules have different characteristics measured in terms of the size of the total budget allocation made and the inter division variability. In addition, an attempt is made to ascertain the techniques followed within the groups to reach a decision. None of the four models offered provides an adequate explanation of the observed behavior. However, a mixed model consisting of two of the approaches does provide a reasonable explanation for the observed behavior.