New Economics Papers
on Collective Decision-Making
Issue of 2005‒04‒16
eleven papers chosen by

  1. Early versus Late Coalition Announcement in Experimental Democracies By Robert E. Goodin; Rupert Sausgruber; Werner Güth
  2. Does permanent income determine the vote? By Lind, Jo Thori
  3. Majority voting leads to unanimity By Asheim , Geir B.; Claussen , Carl Andreas; Nilssen, Tore
  4. Values and Politics in the US: An Equilibrium Analysis of the 2004 Election By Woojin Lee; John Roemer
  5. Altruism and Political Participation By James Fowler
  6. The Harsanyi paradox and the 'right to talk' in bargaining among coalitions By Juan Vidal-Puga
  7. On the existence of Nash equilibrium in electoral competition By Alejandro Saporiti
  8. "Approval Voting" lacks a sound moral base for the individual voter's choice of approval versus non-approval, especially when the Status Quo is neglected By Thomas Colignatus
  9. Vote Buying By Eddie Dekel; Matthew O. Jackson; Asher Wolinsky
  10. Reputation Effects in Gold Glove Award Voting By Arthur Zillante
  11. Why Do Voters Demand Universal Government Benefits? By Filip Palda

  1. By: Robert E. Goodin; Rupert Sausgruber; Werner Güth
    Abstract: Sometimes parties decide ahead of an election with whom they would (if possible) join in a coalition together. Other times they leave it completely open, until after the election, with whom they would coalesce. Observations from the political arena itself do not allow us to determine the differing effects of coalition forming before or after the election. We therefore explore the question experimentally, in a situation with three parties and seven voters. There are striking effects regarding party behaviour: coalitions formed before the election are much more likely to be ideologically better-connected but larger than necessary and contain superfluous parties. Voters, however, seem not to vote strategically more often in cases of preannounced coalition intentions in ways we might expect.
  2. By: Lind, Jo Thori (Dept. of Economics, University of Oslo)
    Abstract: I study to what extent voters are forward looking and how future income affects <p> the voting decision. Particularly, I estimate the effect of both transitory and permanent income on preferences for different parties using a panel data set from the Norwegian Election Study. To construct a proxy for permanent income, I use stated expectations about the future economic situation and an estimate of how this affects future income. It turns out that once we include the proxy for permanent income, transitory income has no explanatory power on voting behaviour, supporting the hypothesis of forward looking voting. As expected, a high expected permanent income leads to Conservative voting and a low income to Socialist voting.
    Keywords: Voting; permanent income; redistribution
    JEL: C25 D31 D72 D91 H11 H53
    Date: 2005–04–06
  3. By: Asheim , Geir B. (Dept. of Economics, University of Oslo); Claussen , Carl Andreas (Norges Bank); Nilssen, Tore (Dept. of Economics, University of Oslo)
    Abstract: We consider a situation where society decides, through majority voting in a secret ballot, between the alternatives of ‘reform’ and ‘status quo’. Reform is assumed to create a minority of winners, while being efficient in the Kaldor-Hicks sense. We explore the consequences of allowing binding transfers between voters conditional on the chosen alternative. In particular, we establish conditions under which the winners wish to compensate all losers, thus leading to unanimity for reform, rather than compensating some losers to form a non-maximal majority. The analysis employs concepts from cooperative game theory.
    Keywords: voting; reform; status quo; Kaldor-Hicks sense; chosen alternative; unanimity for reform; cooperative game theory
    JEL: C71 D72
    Date: 2005–01–07
  4. By: Woojin Lee (University of Massachusetts Amherst); John Roemer (Yale University)
    Abstract: The CNN exit polls after the 2004 election rated ‘moral values’ the most important issue; next came ‘jobs and the economy.’ Eighty percent of the voters who rated moral values the most important issue voted for Bush while eighty percent of the voters who rated jobs and the economy the most important voted for Kerry. We study the extent to which the distribution of voter opinion on moral values influences the positions that parties take on the economic issue, which we take to be the size of the public sector, through political competition. There are at least two distinct ways this influence might occur. First, because the Republican Party is identified with a traditionalist stance on moral values, some voters who desire a large public sector may nevertheless vote Republican because traditionalist morality is important for them. This we call the policy bundle effect. Second, it may be the case that those who subscribe to a traditionalist morality take economic conservatism to be part of that view, in the sense that they view the state as, for instance, usurping the role of the individual and/or family. We call this effect the moral Puritanism effect. Thus economic conservatism in the US may be politically strengthened by moral traditionalism because the Republican Party links the two issues (policy bundle) or because moral traditionalists in the US are anti-statist (in the Puritan sense). Our analysis will enable us to predict how equilibrium policies proposed by Democratic and Republican Parties would change if all voters had the same view on the moral-values issue, and we will decompose these changes into the aforementioned two effects. JEL Categories: D3, D7, H2
    Keywords: moral values, redistribution, moral Puritanism effect, policy bundle effect, party unanimity Nash equilibrium
    Date: 2005–04
  5. By: James Fowler (UC Davis)
    Abstract: I rework the traditional calculus of participation model by adding a term for benefits to others. Altruism is shown to affect participation in two ways. First, although the probability that a single act of participation affects the outcome of a political activity in large populations is quite small, the number of people who enjoy the benefit is large. As a result, altruists have a significant incentive to participate. Second, if politics involves transfers from one group to another, then unconditional altruists gain nothing from participating. However, discriminating altruists who care more about some groups than others will have a significant incentive to participate in activities that make members of their preferred groups better off. I use dictator games to measure altruism towards an unidentified anonymous recipient and two recipients identified only as a registered Democrat or a registered Republican. These allocations also permit a distinction between discriminating altruists and unconditional altruists. The results show that partisanship has several important effects on dictator game allocations, and both altruism and discriminating altruism significantly increase political participation.
    JEL: C9
    Date: 2005–04–01
  6. By: Juan Vidal-Puga (Universidade de Vigo)
    Abstract: We introduce a non-cooperative model of bargaining when players are divided into coalitions. The model is a modification of the mechanism in Vidal-Puga (Economic Theory, 2005) so that all the players have the same chances to make proposals. This means that players maintain their own 'right to talk' when joining a coalition. We apply this model to an intriguing example presented by Krasa, Tamimi and Yannelis (Journal of Mathematical Economics, 2003) and show that the Harsanyi paradox (forming a coalition may be disadvantageous) disappears.
    Keywords: cooperative games bargaining coalition structure Harsanyi paradox
    JEL: C71 C78
    Date: 2005–01–31
  7. By: Alejandro Saporiti (Queen Mary, University of London)
    Abstract: This paper generalizes previous existence results on unidimensional electoral competition, by extending the traditional two-party electoral game to the case where parties have mixed motivations, in the sense that they are interested in winning the election, but also in the policy implemented after the contest. Although this game has discontinuous payoffs, it satisfies payoff security and reciprocally upper semi- continuity. However, conditional payoffs might violate quasi-concavity. Hence, our first result shows that the existence of a pure-strategy Nash equilibrium can be guaranteed only if parties' interests are symmetric. Instead, we prove that the mixed extension satisfies better reply security and, therefore, that a mixed-strategy equilibrium always exists. We also characterize the set of equilibria for a tractable version of the model. This shows that the interaction between the electoral uncertainty, the aggregate level of opportunism and its distribution among parties shape the equilibrium strategies. In particular, when the opportunism is large and asymmetrically distributed, the support of each mixed-strategy equilibrium is a closed interval located on one side of the median. Further, as the uncertainty increases, the probability distributions concentrate on the extremes of the support. And the mixed-strategy equilibrium vanishes above a critical level, over which each party plays a pure strategy in its own ideological side.
    Keywords: Electoral competition, mixed motivations, discontinuous games, Nash equilibrium.
    JEL: D70 D72 C72
    Date: 2005–04–11
  8. By: Thomas Colignatus (Thomas Cool Consultancy & Econometrics)
    Abstract: "Approval Voting" is the voting mechanism reportedly used since 1987 by professional and scientific societies such as the Econometric Society, INFORMS, ASA, AMS, MAA, IEEE and the Social Choice and Welfare Society. The method lacks a sound moral base for the choice by individual members between approval and non-approval, especially when the Status Quo is neglected. Minority rights are better protected when every voter respects the uniform Status Quo, rather than allowing that every voter determines a private (secret) reference point. A better method than Approval Voting is the (Pareto-) Borda Fixed Point rule introduced in the literature in 2001.
    JEL: A00
    Date: 2005–03–28
  9. By: Eddie Dekel (Tel-Aviv University); Matthew O. Jackson (Catlech); Asher Wolinsky (Northwestern University)
    Abstract: We examine the consequences of vote buying, assuming this practice were allowed and free of stigma. Two parties competing in a binary election may purchase votes in a sequential bidding game via up-front binding payments and/or campaign promises (platforms) that are contingent upon the outcome of the election. We analyze the role of the parties' budget constraints and voter preferences in determining the winner and the payments to voters.
    Keywords: vote buying, elections, campaign promises
    JEL: P16 C72
    Date: 2005–03–14
  10. By: Arthur Zillante (ICES, George Mason University)
    Abstract: Reputation effects have been thought to influence how candidates in an election are viewed by the electorate. Using data from Major League Baseball, I attempt to quantify the effect that reputation plays in voting for the Gold Glove award. While the award is designed to reflect current-year defensive accomplishments, two other hypotheses have been suggested to explain voting behavior. The first is that voters use current-year offensive accomplishments in lieu of defensive accomplishments. The second hypothesis is that voters rely on the past performance of the players when casting their ballots, implying that reputation effects exist in the minds of voters. Results from probit estimation show that while reputation effects appear to have a significant effect on the outcome of the election, current-year offensive accomplishments do not.
    Keywords: Voting behavior, baseball
    JEL: D72
    Date: 2005–02–08
  11. By: Filip Palda (École nationale d'administration publique)
    Abstract: Universal social benefits seem to contradict important notions in economics. They are poorly targeted and must be paid for by what seem to be high taxes. This paper describes the costs of universality and then proposes two competing explanations for why an electorate might wish to pay these costs. It may be harder to identify the poor through targeted social programs than to simply give everyone social benefits and withdraw part of these benefits through the tax system. Or, universality may be a form of political insurance that protects any one group of voters from being exploited by others. Each conjecture leads to different predictions about the manner in which government benefits will vary with the incomes of the recipients. I use a model of tax and spending incidence for Canada in 1990 to see which conjecture helps best to understand the data. I find mixed evidence in favor of the notion that universality is a form of political insurance.
    Keywords: fiscal churning, political efficiency, transfers, Canada
    JEL: D6 D7 H
    Date: 2005–03–30

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