The Option to Wait in Collective Decisions

We consider a model in which voters over time receive more information about
their preferences concerning an irreversible social decision. Voters can either implement
the project in the first period, or they can postpone the decision to the
second period. We analyze the effects of different majority rules. Individual first
period voting behavior may become "less conservative" under supermajority rules,
and it is even possible that a project is implemented in the first period under a
supermajority rule that would not be implemented under simple majority rule.
We characterize the optimal majority rule, which is a supermajority rule. In
contrast to individual investment problems, society may be better off if the option
to postpone the decision did not exist. These results are qualitatively robust to
natural generalizations of our model.