nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2007‒04‒09
nineteen papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. Vote Buying By Eddie Dekel; Matthew O. Jackson; Asher Wolinsky
  2. Vote Buying II: Legislatures and Lobbying By Eddie Dekel; Matthew O. Jackson; Asher Wolinksy
  3. Voting in small networks with cross-pressure By Ascensión Andina-Díaz; Miguel A. Meléndez-Jiménez
  4. Strategic Delegation and Voting Rules By Bard Hastad
  5. Strategic Voting over Strategic Proposals, Second Version By Philip Bond; Hülya Eraslan
  6. Voting behavior in a city of poor workers and rich entrepreneurs: Local contextual effects and class voting in the Mexico City metropolitan area, 1994-2000 By Vilalta y Perdomo, Carlos J.
  7. An Analysis of Mexico's Recounted Ballots By Mark Weisbrot; David Rosnick; Luis Sandoval; Carla Paredes-Drouet
  8. Factions and Political Competition By Nicola Persico; José Carlos Rodríguez-Pueblita; Dan Silverman
  9. Political labor market, government policy, and stability of a non-democratic regime By Lazarev, Valery
  10. Political Autonomy and Independence: Theory and Experimental Evidence By Klaus Abbink; Jordi Brandts
  11. Dropping the Ax: Illegal Firings During Union Election Campaigns By John Schmitt; Ben Zipperer
  12. An Analysis of Discrepancies in the Mexican Presidential Election Results By Mark Weisbrot; Luis Sandoval; Carla Paredes-Drouet
  13. A Political Economy Model of Congressional Careers By Daniel Diermeier; Michael Keane; Antonio Merlo
  14. Flexible Integration By Bard Harstad
  15. Legislative Process with Open Rules By Theresa Fahrenberger; Hans Gersbach
  16. The meritocracy as a mechanism to overcome social dilemmas By Gunnthorsdottir, Anna; Vragov, Roumen; Mccabe, Kevin
  17. Insurgency and credible commitment in autocracies and democracies By Keefer, Philip
  18. Love Thy Neighbor, Love Thy Kin: Strategy and Bias in the Eurovision Song Contest By Stengos, T.; Clerides, S.
  19. Informational Lobbying under the Shadow of Political Pressure By Matthias Dahm; Nicolas Porteiro

  1. By: Eddie Dekel; Matthew O. Jackson; Asher Wolinsky
    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. For instance, if only campaign promises are allowed, then the winning party depends not only on the relative size of the budgets, but also on the excess support of the party with the a priori majority, where the excess support is measured in terms of the (minimal) total utility of supporting voters who are in excess of the majority needed to win. If up front vote buying is permitted, and voters care directly about how they vote (as a legislator would), then the determination of the winning party depends on a weighted comparison of the two parties’ budgets plus half of the total utility of their supporting voters. These results suggest that vote buying can lead to an inefficient party winning in equilibrium. We find that under some circumstances, if parties budgets are raised through donations, then vote buying can be efficient. Finally, we provide some results on vote buying in the face of uncertainty.
    Keywords: vote buying, political economy, campaign promises.
    JEL: P16 C72
  2. By: Eddie Dekel; Matthew O. Jackson; Asher Wolinksy
    Abstract: We examine the consequences of lobbying and vote buying, assuming this prac- tice were allowed and free of stigma. Two "lobbyists" compete for the votes of legislators by offering up-front payments to the legislators in exchange for their votes. We analyze how the lobbyists' budget constraints and legislator preferences determine the winner and the payments.
    Keywords: vote buying, lobbying, legislatures, political economy.
    JEL: P16 C72
  3. By: Ascensión Andina-Díaz; Miguel A. Meléndez-Jiménez
    Abstract: We present a model of participation in elections in small networks, in which citizens su¤er from cross-pressures if voting against the alternative preferred by some of their social contacts. We analyze how the existence of cross-pressures may shape voting decisions, and so, political outcomes; and how candidates may exploit this e¤ect to their interest.
    Keywords: Network; Voting; Cross-Cutting.
    JEL: D72
  4. By: Bard Hastad
    Abstract: When making collective decisions, principals (voters or districts) typically benefit by strategically delegating their bargaining and voting power to representatives different from themselves. There are conflicting views in the literature, however, of whether such a delegate should be "conservative" (status quo biased) or instead "progressive" relative to his principal. I show how the answer depends on the political system in general, and the majority requirement in particular. A larger majority requirement leads to conservative delegation, but "sincere" delegation is always achieved by the optimal voting rule.
    Keywords: Strategic delegation, collective decisions, voting rules
    JEL: D71 D72 F53 H11
  5. By: Philip Bond (Finance Department, The Wharton School, University of Pennsylvania); Hülya Eraslan (Finance Department, The Wharton School, University of Pennsylvania)
    Abstract: Prior research on “strategic voting” has reached the conclusion that unanimity rule is uniquely bad: it results in destruction of information, and hence makes voters worse off. We show that this conclusion depends critically on the assumption that the issue being voted on is exogenous, i.e., independent of the voting rule used. We depart from the existing literature by endogenizing the proposal that is put to a vote, and establish that under many circumstances unanimity rule makes voters better off. Moreover, in some cases unanimity rule also makes the proposing individual better off even when he has diametrically opposing preferences. In this case, unanimity is the Pareto dominant voting rule. Voters prefer unanimity rule because it induces the proposing individual to make a more attractive proposal. The proposing individual prefers unanimity rule because the acceptance probabilities for moderate proposals are higher.
    Keywords: Strategic voting; agenda setting; multilateral bargaining
    JEL: C7 D7 D8
    Date: 2004–09–01
  6. By: Vilalta y Perdomo, Carlos J. (Tecnológico de Monterrey, Campus Ciudad de México)
    Date: 2007–03
  7. By: Mark Weisbrot; David Rosnick; Luis Sandoval; Carla Paredes-Drouet
    Abstract: This report analyzes the recounted sample from Mexico's presidential elections and raises questions about the electoral process.
    Date: 2006–08
  8. By: Nicola Persico; José Carlos Rodríguez-Pueblita; Dan Silverman
    Abstract: This paper presents a new model of political competition where candidates belong to factions. Before elections, factions compete to direct local public goods to their local constituencies. Voters view the public goods as a credible signal that their local candidate is in the right (i.e., powerful) faction. The model of factional competition delivers a rich set of implications relating the internal organization of the party to the allocation of resources. Several key theoretical predictions of the model find a counterpart in our empirical analysis of newly coded data on the provision of water services in Mexico.
    JEL: D72 D73 H4 H54
    Date: 2007–04
  9. By: Lazarev, Valery
    Abstract: An important source of stability of a hierarchical non-democratic political regime, such as that of the Soviet Union in the past or China today, is the rulers’ ability to buy the services and political support of activists recruited from the working population in the monopsonistic political labor market. Implicit contracts that underlie this exchange require retirement of incumbents to allow for deferred promotion of activists into rent-paying positions. An analysis of optimal promotion contracts shows that regime stability is consistent with a high income gap between the rulers and the working population, strengthened when government pursues an active investment policy, and not affected positively by government spending on public goods. Predictions of the promotion contract model are tested using Soviet data for the period 1956 to 1968.
    Keywords: non-democracy; political rents; hierarchy; promotion incentives; implicit contract
    JEL: P26 J45 D70
    Date: 2007–03–16
  10. By: Klaus Abbink; Jordi Brandts
    Abstract: We study the process by which subordinated regions of a country can obtain a more favourable political status. In our theoretical model a dominant and a dominated region first interact through a voting process that can lead to different degrees of autonomy. If this process fails then both regions engage in a costly political conflict which can only lead to the maintenance of the initial subordination of the region in question or to its complete independence. In the subgame-perfect equilibrium the voting process always leads to an intermediate arrangement acceptable for both parts. Hence, the costly political struggle never occurs. In contrast, in our experiments we observe a large amount of fighting involving high material losses, even in a case in which the possibilities for an arrangement without conflict are very salient. In our experimental environment intermediate solutions are feasible and stable, but purely emotional elements prevent them from being reached.
    Keywords: Secession, collective action, independence movements, laboratory experiments, rent-seeking
    JEL: C92 C93 D72 D74
    Date: 2007–03–01
  11. By: John Schmitt; Ben Zipperer
    Abstract: This report finds a steep rise in illegal firings of pro-union workers in the 2000s relative to the last half of the 1990s. It uses published data from the National Labor Relations Board (NLRB) to update an index of the probability that a pro-union worker will be fired in the course of a union election campaign. By 2005, pro-union workers involved in union election campaigns faced about a 1.8 percent chance of being illegally fired during the course of the campaign. If we assume that employers target union organizers and activists, and that union organizers and activists make up about 10 percent of pro-union workers, our estimates suggest that almost one-in-five union organizers or activists can expect to be fired as a result of their activities in a union election campaign.
    JEL: J41 J52 J53 J58 J83 K42
    Date: 2007–01
  12. By: Mark Weisbrot; Luis Sandoval; Carla Paredes-Drouet
    Abstract: This report finds that about half of all ballot boxes in the Mexican presidential election in July 2006 had "adding up" errors, and looks at important information that has been withheld by Mexico's electoral authorities.
    Date: 2006–08
  13. By: Daniel Diermeier; Michael Keane; Antonio Merlo
    Abstract: Theories in political economy depend critically on assumptions about motivations of politicians. Our analysis starts from the premise that politicians, like other economic agents, are rational individuals who make career decisions by comparing the expected returns of alternative choices. The main goal of the paper is to quantify the returns to a career in the United States Congress. To achieve this goal we specify a dynamic model of career decisions of a member of Congress and we estimate this model using a newly collected data set. Given estimates of the structural model, we assess reelection probabilities for members of Congress, estimate the effect of congressional experience on private and public sector wages, and quantify the value of a congressional seat. Moreover, we use the estimated model to assess how an increase in the congressional wage or the imposition of term limits would affect the career decisions of politicians and the returns to a career in Congress.
  14. By: Bard Harstad
    Abstract: For a club such as the European Union, an important question is when, and under which conditions, a subset of the members should be allowed to form "inner clubs" and enhance cooperation. Flexible cooperation allows members to participate if and only if they benefit, but it generates a freerider problem if potential members choose to opt out. The analysis shows that flexible cooperation is better if the heterogeneity is large and the externality small. The best possible symmetric and monotonic participation mechanism, however, is implemented by two thresholds: A mandatory and a minimum participation rule. Rigid and flexible cooperation are both special cases of this mechanism. For each of these thresholds, the optimum is characterized.
  15. By: Theresa Fahrenberger (Center of Economic Research (CER-ETH) at ETH Zurich); Hans Gersbach (Center of Economic Research (CER-ETH) at ETH Zurich)
    Abstract: We examine the legislative game with open rules proposed by Baron and Ferejohn (1989). We first show that the three-group equilibrium suggested by Baron and Ferejohn does not always obtain. Second, we characterize the set of stationary equilibria for simple and super majority rules. Such equilibria are either of the three-group or four-group type. The latter type tends to occur when the size of the legislature becomes larger. Moreover, four-group equilibria imply large delay costs.
    Keywords: Baron/Ferejohn model, bargaining in legislatures, open rules, threegroup and four-group equilibria
    JEL: D7
    Date: 2007–02
  16. By: Gunnthorsdottir, Anna; Vragov, Roumen; Mccabe, Kevin
    Abstract: A new mechanism that substantially mitigates social dilemmas is examined theoretically and experimentally. It resembles the voluntary contribution mechanism (VCM) except that in each decision round subjects are ranked and then grouped according to their public contribution. The game has multiple mostly asymmetric, Pareto-ranked pure-strategy equilibria which are rather counterintuitive, yet experimental subjects tacitly coordinate the payoff-dominant equilibrium reliably and quite precisely. In the VCM grouping is random which, with its arbitrary relation to contribution corresponds to any grouping unrelated to output, for example grouping based on race or gender. The new mechanism resembles a meritocracy since based on how much they contribute; participants are assigned to strata that vary in payoff. The findings shed light on the nature of merit-based social and organizational grouping and provide guidelines for future research and application.
    Keywords: social dilemmas; Nash equilibrium; non-cooperative games; coordination; mechanism design; experiment
    JEL: D7
    Date: 2007–02–10
  17. By: Keefer, Philip
    Abstract: This paper suggests a new factor that makes civil war more likely: the inability of political actors to make credible promises to broad segments of society. Lacking this ability, both elected and unelected governments pursue public policies that leave citizens less well-off and more prone to revolt. At the same time, these actors have a reduced ability to build an anti-insurgency capacity in the first place, since they are less able to prevent anti-insurgents from themselves mounting coups. But while reducing the risk of conflict overall, increasing credibility can, over some range, worsen the effects of natural resources and ethnic fragmentation on civil war. Empirical tests using various measures of political credibility support these conclusions.
    Keywords: Population Policies,Parliamentary Government,Economic Theory & Research,Social Conflict and Violence,Politics and Government
    Date: 2007–04–01
  18. By: Stengos, T.; Clerides, S.
    Date: 2006
  19. By: Matthias Dahm; Nicolas Porteiro
    Abstract: We examine the incentives of an interest group to provide verifiable policy-relevant information to a political decision-maker and to exert political pressure on her. We show that both lobbying instruments are interdependent. In our view information provision is a risky attempt to affect the politician’s beliefs about the desirability of the lobby’s objective. The constraints governing informational lobbying determine a specific lottery available. The circumstances under which political pressure can be applied specify the lobby’s valuation of different beliefs of the politician and, thus, her attitude toward risk. The combination of lotteries available and induced risk preference determines the optimal lobbying behavior. Our approach gives a novel explanation for the fact that interest groups often try to provide information credibly. We identify several factors that induce risk proclivity (and thus information provision). We also show that the availability of political pressure might have a deterrence effect on information provision. This ‘shadow of political pressure’ might impede information provision at all or induce a complementary relationship between both lobbying instruments.
    Keywords: Experts, Influence, Credibility, Political contributions, Issue ads.
    JEL: C72 D72

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