The Cherry-Picking Trap

Abstract: When a better-informed proposer selects a policy to put before a responder, the responder should not take it at face value but ask why it was chosen. We model how this inference can undermine trust even when interests are broadly aligned. A proposer privately observes a basket of viable policies and selects one to put forward; a responder decides whether to approve but may lack the expertise to assess the proposal. A large basket makes it easier to find Pareto improvements but also gives the proposer greater scope to cherry pick a proposal that favors him at the responder's expense. In the unique equilibrium, mutually beneficial policies are often put forward and yet rationally rejected. Flexibility that should enable agreement instead breeds distrust