nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2007‒01‒14
eleven papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Political Bad Reputation By Canegrati, Emanuele
  2. Yardstick competition: a spatial voting model approach By Canegrati, Emanuele
  3. The Common External Tariff in a Customs Union: Voting, Logrolling, and National Government Interests By Tavares, Samia
  4. Demand Bargaining and Proportional Payoffs in Legislatures By Maria Montero; Juan Vidal-Puga
  5. Deeper Integration and Voting on the Common European External Tariff By Tavares, Samia
  6. Country size and publicly provided goods By Klaas Stahl
  7. “Aggregating judgments by the majority method” By García-Bermejo, Juan Carlos
  8. Nominations for sale By Console Battilana, Silvia; Shepsle, Kenneth
  9. Crowding-out in productive and redistributive rent seeking By Giuseppe, Dari-Mattiacci; Bruno, Lovat; Eric, Langlais; Francesco, Parisi
  10. Does the Party in Power Matter for Economic Performance? By Elliott Parker
  11. On the reserve price in all-pay auctions with complete information and lobbying games By Bertoletti, Paolo

  1. By: Canegrati, Emanuele
    Abstract: The goal of this paper is to explore how the connection between political ideology and voters’ preferences is able to generate different equilibria in a yardstick competition game, where good incumbents are forced to create a bad reputation or, in other words, to mimic the bad incumbents’ behavior in order to win the elections in a two-candidate political competition.
    JEL: D72 D78
    Date: 2006–08
  2. By: Canegrati, Emanuele
    Abstract: I analyse a yardstick competition game using a spatial voting model, where voters vote for a candidate according to the distance between their Ideal Point and the policy selected by a candidate. The policy which is closest to a voter’s IP provides the voter with a higher utility so that minimizing the distance means maximising the utility. I demonstrate that in the presence of asymmetrical information the existence of yardstick competition entails a selection device but not a discipline device, suggesting the existence of a trade off between these two goals. In the second part, I analyse an economic environment characterised by the presence of shocks, whose sign and magnitude are private information of incumbents. This time, the introduction of yardstick competition acts both as a selection and a discipline device.
    JEL: H73 D72 I38
    Date: 2006–04
  3. By: Tavares, Samia
    Abstract: Missing from the analysis of customs unions has been a consideration of collective decisionmaking by countries regarding the union’s common trade policy. In the case of the common European external tariff, how governments voted was not public information. This paper uses a unique dataset to derive member states’ tariff preferences, which are then used to establish the decision rule before 1987, when individual governments had veto power. Results indicate a principle of unanimity, as well as the presence of logrolling. The political equilibrium for the common external tariff is also illustrated to have shifted as a result of union enlargements.
    Keywords: Collective decisions; tariff preferences; political economy; European Community; decisive voter
    JEL: F14 D72 F13
    Date: 2006–07–25
  4. By: Maria Montero (University of Nottingham); Juan Vidal-Puga (University of Vigo)
    Abstract: We study a majoritarian bargaining model in which the parties make payoff demands in decreasing order of voting weight. If the game is constant-sum and homogeneous, the unique subgame perfect equilibrium is such that the minimal winning coalition of the players who move first forms and payoffs are proportional to the voting weights.
    Date: 2006–11
  5. By: Tavares, Samia
    Abstract: Since the 1987 Single European Act, the European Union has deepened its integration process. In the case of the determination of the common external tariff, deeper integration implies that the tariff reflected union-wide preferences. If integration is still shallow, though, the observed tariff will reflect the preferences of a pivotal national government. How governments voted, however, was not public information. This paper uses a unique dataset to test the deep vs. shallow integration hypothesis in an effort to shed light on how decisions are made in the EU. Results support the deep integration hypothesis.
    Keywords: Collective decisions; deeper integration; tariffs; European Union; decisive voter
    JEL: F14 D72 F13
    Date: 2006–07–29
  6. By: Klaas Stahl (IIW, University Bonn, Lennéstraße 37, 53113, Bonn, Germany.
    Abstract: This paper studies the equilibrium size of countries. Individuals in small countries have greater influence over the nature of political decision making while individuals in large countries have the advantage of more public goods and lower tax rates. The model implies that (i) there exists excessive incentives to separate, though this need not be the case for all sets of secession rules studied; (ii) an exogenous increase in public spending decreases country size; (iii) countries with a presidential-congressional democracy are larger than countries with a parliamentary democracy.
    Keywords: country size, public spending, structure of government
    JEL: D7 H1 H2 H7
    Date: 2006–12
  7. By: García-Bermejo, Juan Carlos (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.)
    Abstract: “Judgement aggregation has been receiving increasing attention over recent years. Some typical impossibility results have been proved, about majority and other similar aggregation methods. Those results depend essentially on certain logical constraints borrowed from standard two- valued deductive logic. Nevertheless, the adequacy of these constraints is doubtful. In this paper, we show that by weakening the consistency conditions in a plausible way, such impossibility theorems can be reversed. We also show that the formalism habitually employed in social choice theory may convey a richer setting for analysing this sort of aggregation.”
    Keywords: Judgement aggregation; majority method; logical constraints on judgment aggregation; discursive dilemma
    JEL: D7 D70 D71
  8. By: Console Battilana, Silvia; Shepsle, Kenneth
    Abstract: Models of nomination politics in the US often find "gridlock" in equilibrium because of the super-majority requirement in the Senate for the confirmation of presidential nominees. A blocking coalition often prefers to defeat any nominee. Yet empirically nominations are successful. In the present paper we explore the possibility that senators can be induced to vote contrary to their nominal (gridlock-producing) preferences through contributions from the president and/or lobbyists, thus breaking the gridlock and confirming the nominee. We model contributions by the president and lobbyists according to whether payment schedules are conditioned on the entire voting profile, the vote of a senator, or the outcome. We analyze several extensions to our baseline approach, including the possibility that lobbyists may find it more productive to offer inducements to the president in order to affect his proposal behavior, rather than trying to induce senators to vote for or against a given nominee.
    Keywords: lobbying; supermajority institutions
    JEL: Z19
    Date: 2006–10–26
  9. By: Giuseppe, Dari-Mattiacci; Bruno, Lovat; Eric, Langlais; Francesco, Parisi
    Abstract: This paper presents a general rent-seeking model in which participants decide on entry before choosing their levels of efforts. The conventional wisdom in the rent-seeking literature suggests that the rent dissipation increases with the number of potential participants and with their productivity of effort. In this paper, we show that this result of the rent-seeking literature is far from general and applies only when participants are relatively weak and enter the game with certainty. In the presence of strong competitors, the expected total dissipation actually decreases, since participation in the game is less frequent. We further consider the impact of competitors' exit option, distinguishing between \textquotedblright redistributive rent-seeking\textquotedblright\ and \textquotedblright productive rent-seeking\textquotedblright\ situations. In redistributive rent-seeking, no social loss results from the fact that all competitors exit the race. In productive rent-seeking, instead, lack of participation creates a social loss (the \textquotedblright lost treasure\textquotedblright\ effect), since valuable rents are left unexploited. We show that the lost-treasure effect perfectly counterbalances the reduction in rent dissipation due to competitors' exit. Hence, unlike redistributive rent-seeking, in productive rent-seeking the total social loss remains equal to the entire rent even when parties grow stronger or the number of players increases.
    Keywords: Rent-seeking; rent dissipation; Tullock's paradox.
    JEL: K00 D72 C72
    Date: 2004–10–20
  10. By: Elliott Parker (Department of Economics, University of Nevada, Reno)
    Abstract: In this brief paper, I consider whether five common political beliefs have any basis in fact. Does the economy grow faster when Republicans are in charge? Does the size of the government actually keep expanding? If so, is this growth correlated with Democrats being in charge? Does bigger government lead to slower growth? Finally, is it accurate to characterize Democrats as the “tax and spend” party? While correlation is not causation and theoretical relationships are complex, the data on U.S. economic performance during the postwar period does not appear to support any of these beliefs, and in fact tends more to support the alternative hypotheses.
    Keywords: deficits, government spending, economic growth, political parties
    JEL: H00 H50 H60
    Date: 2006–12
  11. By: Bertoletti, Paolo
    Abstract: We show that the seller’s optimal reserve price in an all-pay auction with complete information is higher than in a standard auction. We use our results to re-consider some findings of the literature that models lobbying games as all-pay auctions. In particular, we show that the so-called Exclusion Principle appears to rely crucially on the implicit assumption of a “weak” (in terms of bargaining power) seller, and does not hold if she regards bidders’ valuations as iid according to a monotonic hazard rate. Our preliminary results for the case of independent but asymmetric bidders make it even more suspicious.
    Keywords: all-pay auctions; reserve price; economic theory of lobbying
    JEL: D44 D72
    Date: 2006–01

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