New Economics Papers
on Collective Decision-Making
Issue of 2005‒02‒13
four papers chosen by

  1. Speed and Quality of Collective Decision-Making II: Incentives for Information Provision By Grüner, Hans Peter; Schulte, Elisabeth
  2. Voice of the Diaspora: An Analysis of Migrant Voting Behaviour By Doyle, Orla; Fidrmuc, Jan
  3. Designing Democracies for Sustainability By Gersbach, Hans; Kleinschmidt, Tobias
  4. Do Elections Always Motivate Incumbents? Learning versus Re-election Concerns By Le Borgne, Eric; Lockwood, Ben

  1. By: Grüner, Hans Peter; Schulte, Elisabeth
    Abstract: This Paper provides a game theoretic extension of Radner's (1993) model of hierarchical information aggregation. It studies the role of the hierarchy design for the speed and quality of a collective decision process. The hierarchy is described as a programmed network of agents. The programme describes how information is processed within the network. The network of P identical managers has to aggregate information in the form of a set of n data items in order to make an informed decision. Each manager benefits from reaching an accurate decision but suffers from an individual cost of effort, which has to be provided in order to understand the information contained in a data item properly. We find that decentralized information processing increases incentives for information provision. There may be boundaries on the appropriate extend of decentralization, however. We also compare three different hierarchy designs: two balanced hierarchies and the fastest (skip-level) hierarchy, proposed by Radner. Skip-level reporting outperforms balanced hierarchies in terms of decision speed and in terms of decision quality.
    Keywords: hierarchies; incentives for information provision; information processing
    JEL: D23 D70 D83 L22 P51
    Date: 2004–04
  2. By: Doyle, Orla; Fidrmuc, Jan
    Abstract: This Paper utilizes a unique dataset on votes cast by Czech and Polish migrants in their recent national elections to investigate the impact of institutional, political and economic characteristics on migrants’ voting behaviour. The political preferences of migrants are strikingly different from those of their domestic counterparts. In addition, there are also important differences among migrants living in different countries. This Paper examines three alternative hypotheses to explain migrant voting behaviour: adaptive learning; economic self-selection and political self-selection. The results of the analysis suggest that migrant voting behaviour is affected by the institutional environment of the host countries, in particular the tradition of democracy and the extent of economic freedom. In contrast, there is little evidence that differences in migrants’ political attitudes are caused by self-selection based either on economic motives or political attitudes prior to migrating. These results are interpreted as indicating that migrants’ political preferences change in the wake of migration as they adapt to the norms and values prevailing in their surroundings.
    Keywords: migration; political resocialization; voting; Z13
    JEL: J61 P26 P33
    Date: 2004–09
  3. By: Gersbach, Hans; Kleinschmidt, Tobias
    Abstract: Democratic processes may not take the welfare of future generations sufficiently into account and thus may not achieve sustainability. We show that the dual democratic mechanism – rejection/support rewards (RSRs) for politicians and elections – can achieve sustainability. RSRs stipulate that incumbents who are not re-elected, but obtain the majority support among young voters receive a particular monetary or non-monetary reward. Such rejection/support rewards induce politicians to undertake long-term beneficial policies, but may invite excessive reward-seeking. We identify optimal RSRs under different informational circumstances.
    Keywords: democracy; elections; incentive contracts; Q56; rejection/support rewards; sustainability
    JEL: D72 D82 H55
    Date: 2004–09
  4. By: Le Borgne, Eric; Lockwood, Ben
    Abstract: This Paper studies a principal-agent model of the relationship between officeholder and an electorate, where everyone is initially uninformed about the officeholder’s ability. If office-holder effort and ability interact in the determination of performance in office, then an office-holder has an incentive to learn, i.e., raise effort so that performance becomes a more accurate signal of their ability. Elections reduce the learning effect, and the reduction in this effect may more than offset the positive ‘re-election concerns’ effect of elections on effort, implying higher effort with appointment. When this occurs, appointment of officials may welfare-dominate elections.
    Keywords: career concerns; citizen-candidate; effort; elections; incomplete information; learning
    JEL: D72 D78 H41 J44 J45
    Date: 2004–10

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