New Economics Papers
on Collective Decision-Making
Issue of 2006‒07‒28
six papers chosen by

  1. Local public goods in a democracy: Theory and evidence from rural India By Santanu Gupta; Raghbendra Jha
  2. The European Commission – Appointment, Preferences and Institutional Relations By Stefan Napel; Mika Widgrén
  3. Voting Rules and Budget Allocation in an Enlarged EU By Heikki Kauppi; Mika Widgrén
  4. Consensus building: How to persuade a group By Bernard Caillaud; Jean Tirole
  5. Lobbying with Two Audiences: Public vs Private Certi?cation By Frederic Koessler
  6. Optimal Matching and Social Sciences By Laurent Lesnard

  1. By: Santanu Gupta; Raghbendra Jha
    Abstract: This paper examines allocation of local public goods over jurisdictions (villages) with individuals with identical tastes and different incomes, in a model with democratic institutions and majority rule. The median voter (in income) in each jurisdiction determines the probability of re-election for the incumbent government. The jurisdiction with the median of these median voters is most favoured. With identical median voters in jurisdictions, and with re-election requiring less than 50mandate, jurisdictions with higher income inequality get favoured. Results from a survey data (from NCAER) on infrastructure provision in 1669 Indian villages confirm this hypothesis. Ethnic fragmentation does not affect public good provision but political fragmentation does. Finally, villages with the median population are the most favoured for public goods allocation. Sparsely populated and too densely populated villages are relatively neglected.
    Keywords: median voter, local public good, reservation utility
    JEL: H41 H72
    Date: 2006
  2. By: Stefan Napel (Department of Economics, University of Hamburg); Mika Widgrén (Department of Economics, Turku School of Economics)
    Abstract: The paper analyzes the appointment of the European Commission as a strategic game between members of the European Parliament and the Council. The focal equilibrium results in Commissioners that duplicate policy preferences of national Council representatives. Different internal decision rules still prevent the Commission from being a Council clone in aggregate. Rather, it is predicted a priori that Commission policies are on average more in accord with the aggregate position of the Parliament. Empirical analysis suggests that the Council is, in fact, significantly more conservative than Parliament and Commission; the latter two are significantly closer to each other than Council and Commission.
    Keywords: European Commission, investiture procedure, voting rules, Council of Ministers, European Parliament
    JEL: C70 D71 H77
    Date: 2006–06
  3. By: Heikki Kauppi (Department of Economics, University of Helsinki); Mika Widgrén (Department of Economics, Turku School of Economics)
    Abstract: EU declares to provide support for the rural and poor regions of its member states. However, recent research shows that past EU budget allocations (in EU-15) can be attributed to measures of the distribution of voting power in the Council of Ministers deciding on the bulk of EU spending. A standard power measure alone can explain about 85% of the variance of the past EU budget shares, while, if stable coalition patterns among member countries are taken into account, power can explain at least 95% of the budget allocation. In this paper we use such estimates to predict EU budget shares after the eastern enlargement. According to our estimates eastern enlargement has large effects on the budget receipts of the incumbent member states. Moreover, whether the voting rules are based on the Nice Treaty (NT) or the Constitutional Treaty (CT) makes a difference for most member states. Many member states would be worse off under CT than under NT.
    Keywords: EU budget, voting power, Constitutional Treaty, Treaty of Nice
    JEL: C71 D70 D72
    Date: 2006–04
  4. By: Bernard Caillaud; Jean Tirole
    Abstract: Many decisions in private and public organizations are made by groups. The paper explores strategies that the sponsor of a proposal may employ to convince a qualified majority of group members to approve the proposal. Adopting a mechanism design approach to communication, it emphasizes the need to distill information selectively to key members of the group and to engineer persuasion cascades in which members who are brought on board sway the opinion of others. The paper unveils the factors, such as the extent of congruence among group members and between them and the sponsor, and the size and governance of the group, that condition the sponsor's ability to maneuver and get his project approved.
    Date: 2006
  5. By: Frederic Koessler (THEMA, Université de Cergy-Pontoise)
    Abstract: This note compares public and private information certification in a simple class of communication games with one sender and two receivers. It also emphasizes the role of belief consistency conditions in a perfect Bayesian equilibrium of such games.
    Keywords: Certifiable information; cheap talk; consistency of beliefs
    JEL: C72 D82
    Date: 2006–07
  6. By: Laurent Lesnard (Crest)
    Abstract: This working paper is a reflection on the conditions required to use optimal matching (OM) in social sciences. Despite its striking success in biology, optimal matching was not invented to solve biological questions but computer science ones: OM is a family of distance concepts originating in information and coding theory were it is known under various names among which Hamming, and Levenshtein distance. As a consequence, the success of this method in biology has nothing to do with the alleged similarity of the way it operates with biological processes but with choices of parameters in accordance with the kind of materials and questions biologists are facing. As materials and questions differ in social sciences, it is not possible to import OM directly from biology. The very basic fact that sequences of social events are not made of biological matter but of events and time is crucial for the adaptation of OM: insertion and deletion operations warp time and are to be avoided if information regarding the social regulation of the timing of event is to be fully recovered. A formulation of substitution costs taking advantage of the social structuration of time is proposed for sequences sharing the same calendar: dynamic substitution costs can be derived from the series of transition matrices describing social sub-rhythms. An application to the question of the scheduling of work is proposed: using data from the 1985-86 and 1998-99 French time-use surveys, twelve types of workdays are uncovered. Their interpretability and quality, assessed visually through aggregate and individual tempograms, and box plots, seem satisfactory.
    Keywords: optimal matching
    Date: 2006–01

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