Participation Quorums in Costly Meetings

Résumé

In most meetings of shareholders, members of societies, and clubs, the number of attendees must exceed an exogenously given participation requirement in order for a decision to be taken. Otherwise, the meeting has to be postponed. In order to understand the effect of such a participation requirement on individuals’ behavior and the decision outcome, we model a setup of repeated meetings based on Osborne et al. (2000). We show that the decision is delayed when the quorum requirement is high and members are not harmed by postponing the decision. If this is the case, the number of attendees taking the decision may be smaller than in the no-quorum case. Finally, we show that in order to avoid policy distortions, the required number of participants should be even.