New Economics Papers
on Collective Decision-Making
Issue of 2007‒02‒10
nine papers chosen by

  1. Uniformly Bounded Information and Social Choice By Donald E. Campbell; Jerry S. Kelly
  2. Social Preferences and Public Economics: Are good laws a substitute for good citizens? By Samuel Bowles
  3. How italian electors react to gender quotas? A random utility model of voting behaviour By Bonomi Genny; Brosio Giorgio; Di Tommaso Maria Laura
  4. Security-Voting Structure and Bidder Screening By Samuel Lee; Christian At; Mike Burkart
  5. The Preferences of Voters Over Road Tolls and Road Capacity By Amihai Glazer; Stef Proost
  6. On the Value of Participation: Endogenous Emergence of Social Norms in a Three-Player Ultimatum Game By Grimalda, Gianluca; Kar, Anirban; Proto, Eugenio
  7. A theory of the allocation of political time By canegrati, emanuele
  8. Social identity and trust - An experimental investigation By Werner Güth; M. Vittoria Levati; Matteo Ploner
  9. "Social Norms an Voluntary Cooperations"(in Japanese) By Masahiro Okuno-Fujiwara; Takako Fujiwara-Greve; Nobue Suzuki

  1. By: Donald E. Campbell (Department of Economics, College of William and Mary); Jerry S. Kelly (Department of Economics, Syracuse University)
    Abstract: The set of alternatives is infinite. If social welfare function f satisfies the Pareto criterion and there is a positive number β such that each pair of alternatives can be socially ordered without having to consult individual preference over a set with more than β alternatives then there are arbitrarily large finite subsets of X within which f is dictatorial when individual preferences are restricted to a rich subset of profiles.
    Keywords: chromatic graphs, generalized IIA, social welfare function
    JEL: D70 D71
    Date: 2007–01–31
  2. By: Samuel Bowles (Santa Fe Institute, University of Siena and University of Massachusetts)
    Abstract: Laws and policies designed to harness self-regarding preferences to public ends may fail when they compromise the beneficial effects of pro-social preferences. Experimental evidence indicates that incentives that appeal to self interest may reduce the salience of intrinsic motivation, reciprocity, and other civic motives. Motivational crowding in also occurs. The evidence for these processes is reviewed and a model of optimal explicit incentives is presented. JEL Categories: D64, D52, H41, H21, Z13, C92
    Keywords: Social preferences, implementation theory, incentive contracts, incomplete contracts, framing, behavioral experiments, motivational crowding out, ethical norms, constitutions
    Date: 2007–01
  3. By: Bonomi Genny; Brosio Giorgio (University of Turin); Di Tommaso Maria Laura (University of Turin)
    Abstract: The share of elected positions held by women in democratic countries is still very small. To increase this share many countries bave introduced gender quotas in their electoral rules. In Italy gender quotas, requiring a minimum number of women in electoral lists, bave been introduced for elections at different levels of goverrnnent. This type of quotas does noi ensure in ara open list electoral system that women will get more votes. This effect will depend ora tbc extent to which there is an anti-female bias among voters. To test the presence of an anti-female bias in voting behaviour we set up a random utility model for voting behaviour. The model is then tested ora tbc elections for regional councils in 1995 and 2000. The results show that a higher share of women in party lists leads to a significant increase in the probability that voters will choose a female candidate. This implies that voters are willing to vote more for women (there is noi a perfect gender bias against women). Other important factors influencing voters' behaviour are the length of the party list (the longer the party list, and thus the greater the site of electoral districts, the lower the probability of voting for ara inctimbent candidate) and the position of the party in terms of liberal values. The more tbc party is liberal in terms of these values, tbc higher tbc probability that a woman will be voted.
    Date: 2006–09
  4. By: Samuel Lee; Christian At; Mike Burkart
    Abstract: This paper analyzes how non-voting shares affect the takeover outcome in a single-bidder model with asymmetric information and private benefit extraction. In equilibrium, the target firm’s security-voting structure influences the bidder’s participation constraint and in response the shareholders’ conditional expectations about the post-takeover share value. Therefore, the structure can be chosen to discriminate among bidder types. Typically, the socially optimal structure deviates from one share - one vote to promote all and only value-increasing bids. As target shareholders ignore takeover costs, they prefer more takeovers and hence choose a smaller fraction of voting shares than is socially optimal. In either case, the optimal fraction of voting shares decreases with the quality of shareholder protection and increases with the incumbent manager’s ability. Finally, shareholder returns are higher when a given takeover probability is implemented by (more) non-voting shares rather than by (larger) private benefits.
    Date: 2007–02
  5. By: Amihai Glazer (Department of Economics, University of California-Irvine); Stef Proost (Faculty of Economics and Applied Economics, Catholic University of Leuven)
    Abstract: We consider a congestible road, where the cost of travel increases with the number of users on the road and decreases with capacity. Those persons who do not use the road favor a toll which would maximize revenue, and they oppose spending on road capacity. Users of the road prefer a low toll and a large capacity financed by general revenues. We describe conditions that make majority voting lead to a toll and capacity level that equals the socially optimal toll and capacity, that is smaller, or that is larger. This model can also explain the decrease over time of user fees for road use.
    Keywords: Positive qnalysis of policy-paking and implementation; Externalities; Government policy on transportation
    JEL: D78 H23 L98
    Date: 2007–01
  6. By: Grimalda, Gianluca; Kar, Anirban; Proto, Eugenio
    Abstract: We report results from two different settings of a 3-player ultimatum game. Under the monocratic rule, a player is randomly selected to make an offer to two receivers. Under the democratic rule, all three players make a proposal, and one proposal is then extracted. A majority vote is required to implement the proposal. Although the two rules are strategically equivalent, different patterns of behaviour seem to emerge as the number of interactions increase. Under the monocratic rule proposers seem to be entitled to claim a larger share of the pie, and receivers more likely to accept, in comparison with the democratic rule. We speculate that ‘institutions’ allowing more participation in the process of collective choice lead to more ‘socially responsible’ behaviour in the players.
    Keywords: Majority ultimatum; participation; institutions; social norms
    JEL: D72 C92 C78
    Date: 2006–12–27
  7. By: canegrati, emanuele
    Abstract: In this paper I will introduce a microfounded model of political ac- tivities. The aim is twofold: …rst of all, …lling an existing gap with the actual literature which still lacks of a theoretical explanation about how voters choose their leisure acitivities in particular those related with Politics; secondly, explaining why the old may have an interest to spend a greater amount of their leisure in political activities than the young. Empirical evidence taken by the British Election Suvery, con- …rm the hipothesis: political acitivism is related to age (although other individual characteristics, such as gender and education contribute to increase the explanatory power of regressions) and the old follow di¤er- ent activities in order to lobby politicians. Finally the paper represents an empirical proof for the Single Mindedness Theory of Social Secu- rity Systems, which states that since the old have a natural preference for leisure, they have to …nd a …nancial coverage for the reduction in labour income due to their decision to early retire or to reduce their labour supply.
    JEL: J2 D72 D0
    Date: 2007–02–02
  8. By: Werner Güth; M. Vittoria Levati; Matteo Ploner
    Abstract: We experimentally examine how group identity affects trust behavior in an investment game. In one treatment, group identity is induced purely by minimal groups. In other treatments, group members are additionally related by outcome interdependence established in a prior public goods game. Moving from the standard investment game (where no group identity is prompted) to minimal group identity to two-dimensional group identity, we find no significant differences in trust decisions. However, trust is significantly and positively correlated with contribution decisions, suggesting that "social" trust is behaviorally important.
    Keywords: Experiment; Investment game; Trust; Group identity
    JEL: C72 C92
    Date: 2007–01
  9. By: Masahiro Okuno-Fujiwara (Faculty of Economics, University of Tokyo); Takako Fujiwara-Greve (Department of Economics, Keio University); Nobue Suzuki (Department of Economics, Komazawa University)
    Abstract: Unlike the ordinary repeated games, in the real world, people can run away after cheating. In this paper we construct a social game, in which players can repeat Prisoners' Dilemma only if both players agree to continue the partnership. We investigate how a social sanction prevents moral hazard in such a voluntary relationship. We have three conclusions. First, it is possible to enforce voluntary long-term cooperation by trust-building. Second, the trust-building periods can be shortened under diverse strategy distributions. Third, if there is a reference letter system which conveys information that a partnership ended by an unavoidable cause, then the trust-building periods can be shortened as well.
    Date: 2007–01

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