New Economics Papers
on Collective Decision-Making
Issue of 2007‒04‒14
nine papers chosen by

  1. Qualitative Voting By Rafael Hortala-Vallve
  2. Is Vote Buying Effective? Evidence from a Randomized Experiment in West Africa By Pedro C. Vicente
  3. Acyclic domains of linear orders : a survey By Bernard Monjardet
  4. Aggregation Reversals and the Social Formation of Beliefs By Edward L. Glaeser; Bruce Sacerdote
  5. Side Effects of Campaign Finance Reform By Matthias Dahm; Nicolas Porteiro
  6. Liberal democracy as the result of an "aborted" communist revolution By Antonio Cabrales; Antoni Calvo-Armengol; Leonard Wantchekon
  7. Inefficiencies on Linking Decisions By Rafael Hortala-Vallve
  8. IT IS HOBBES, NOT ROUSSEAU: AN EXPERIMENT ON SOCIAL INSURANCE By Antonio Cabrales; Rosemarie Nagel; Jose V. Rodriguez Mora
  9. Political Decisions, Defence and Growth By Erdogdu, Oya Safinaz

  1. By: Rafael Hortala-Vallve
    Abstract: Can we devise mechanisms that allow voters to express the intensity of their preferences when monetary transfers are forbidden? Would we then be able to take account of how much voters wish the approval or dismissal of any particular issue? In such cases, would some minorities be able to decide over those issues they feel very strongly about? As opposed to the classical voting system (one person - one decision - one vote), we propose a new voting system where each agent is endowed with a fixed number of votes that can be distributed freely between a predetermined number of issues that must be approved or dismissed. Its novelty relies on allowing voters to express the intensity of their preferences in a simple manner. This voting system is optimal in a well-defined sense: in a setting with two voters, two issues and preference intensities uniformly and independently distributed across possible values, Qualitative Voting Pareto dominates Majority Rule and, moreover, achieves the only ex-ante optimal (incentive compatible) allocation. The result also holds true with three voters as long as the voters preferences towards the issue differ sufficiently.
    Keywords: Voting, Intensity Problem, Alternatives to Majority Rule, Conflict Resolution
    JEL: C72 D70 P16
    Date: 2007
  2. By: Pedro C. Vicente
    Abstract: Vote buying is a frequent practice during election time in many parts of the world. But no research has been done to quantify its effects on voters` electoral behavior. To address this challenge, we have designed and conducted a randomized experiment during the presidential elections of July 2006 in Sao Tome and Principe. This is a newly found oil-rich West African country that has been facing an increase in `retail` vote buying. Our research design included a randomized campaign against vote buying sponsored by the Electoral Commission of the country, and pre-electoral campaign/post-election panel surveys in treatment (exposed to the campaign) and control locations, including 1034 subjects across 50 different areas. We observe a significant effect of the campaign on perceptions of vote buying, which constitutes the exogenous variation we use to identify effects on voting behavior. We characterize determinants of vote buying (more frequent in swing and rural locations), and find that vote buying energizes the electorate by increasing turnout. Crucially, we capture real effects on candidates` relative performance, by identifying the challenger to be driving more votes through vote buying (after the treatment), which is consistent with the timeline of events (late challenger candidacy). This result controls for changes in information about the candidates (e.g. policy platforms) and location-specific minutes spent by international electoral observers.
    Keywords: Vote Buying, Electoral Politics, Political Economy, Randomized Experiment, West Africa
    JEL: D72 O55 P16
    Date: 2007
  3. By: Bernard Monjardet (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I])
    Abstract: Among the many significant contributions of Fishburn to social choice theory some have borne on what he has called «acyclic sets», i.e. these sets of linear orders where majority rule applies without «Condorcet effect» (majority relation never has cycles). Search for large such domains is a fascinating topic. I review the works in this field and in particular a recent one allowing to show the connections between some of them unrelated up to now.
    Keywords: Acyclic set, alternating scheme, distributive lattice, effet Condorcet, maximal chain, permutoedre lattice, weak Bruhat order, value restriction.
    Date: 2007–04–10
  4. By: Edward L. Glaeser; Bruce Sacerdote
    Abstract: In the past two elections, richer people were more likely to vote Republican while richer states were more likely to vote Democratic. This switch is an aggregation reversal, where an individual relationship, like income and Republicanism, is reversed at some level of aggregation. Aggregation reversals can occur when an independent variable impacts an outcome both directly and indirectly through a correlation with beliefs. For example, income increases the desire for low taxes but decreases belief in Republican social causes. If beliefs are learned socially, then aggregation can magnify the connection between the independent variable and beliefs, which can cause an aggregation reversal. We estimate the model's parameters for three examples of aggregation reversals, and show with these parameters that the model predicts the observed reversals.
    JEL: A1
    Date: 2007–04
  5. By: Matthias Dahm; Nicolas Porteiro
    Abstract: Since campaign finance reform is usually motivated by the concern that existing legislation can not effectively prevent campaign contributions to ‘buy favors’, this paper assumes that contributions influence political decisions. But, given that it is also widely recognized that interest groups achieve influence by providing political decision makers with policy relevant information, we also assume that lobbies engage in non-negligible informational lobbying. We focus on a single political decision to be taken and offer a simple model in which the optimal influence strategy is a mixture of both lobbying instruments. Our main result is to show that campaign finance reform may have important side effects: It may deter informational lobbying so that less policy relevant information is available and as a result political decisions become less efficient.
    Keywords: party and candidate financing, lobbying, interest groups, experts, information transmission, contributions, influence, political decision making process.
    JEL: C72 D72
    Date: 2005–07
  6. By: Antonio Cabrales; Antoni Calvo-Armengol; Leonard Wantchekon
    Abstract: We propose a model of the transition from a ”big man” authoritarian regime to either a liberal democracy or a communist regime. An underground organization votes on whether to summon a mass event. If it is summoned, the organization members decide whether to put effort into the event. Higher effort makes regime change more likely, but it is individually risky. This creates the possibility, in principle, of high and low effort equilibria. But we show, using weak dominance arguments, that only the high effort equilibrium is ”credible.” Thus, internal party democracy is shown to be an efficiency enhancing element for political transitions. We extend the model to show that other internal organization aspects are key for the existence and welfare properties of this equilibrium. Finally we also show when is the process likely to end up in either democracy (and its ”quality”) or a full communist regime.
    Date: 2006–12
  7. By: Rafael Hortala-Vallve
    Abstract: Jackson and Sonnenschein (2006) show that by linking collective decisions the incentive costs can become negligible and, at the limit, ex-ante efficiency can be achieved. In a voting situation this implies that the agents` intensity of preferences can be taken into account even in the absence of monetary transfers. Rather than considering a limiting result we want to analyse what can be achieved while we consider a finite number of linked decisions. We first characterise the set of implementable mechanisms and show that ex-ante efficiency can never be achieved. We then proceed to relax the efficiency requirement and prove that, even when we just require unanimity, the mechanism cannot be sensitive to the agents` intensity of preference.
    Keywords: Linking Decisions, Mechanism Design, Multidimensional Screening, Strategy-Proofness, Intensity Problem, Separable Preferences
    JEL: C72 D70 D80
    Date: 2007
  8. By: Antonio Cabrales; Rosemarie Nagel; Jose V. Rodriguez Mora
    Abstract: We perform an experiment on social insurance to provide a laboratory replica of some important features of the welfare state. In the experiment, all individuals in a group decide whether to make a costly effort, which produces a random (independent) outcome for each one of them. The group members then vote on whether to redistribute the resulting and commonly known total sum of earnings equally amongst themselves. This game has two equilibria, if played once. In one of them, all players make effort and there is little redistribution. In the other one, there is no effort and nothing to redistribute. A solution to the repeated game allows for redistribution and high effort, by the threat to revert to the worst of these equilibria. Our results show that redistribution with high effort is not sustainable. The main reason for the absence of redistribution is that rich agents do not act differently depending on whether the poor have worked hard or not. There is no social contract by which redistribution may be sustained by the threat of punishing the poor if they do not exert effort. Thus, the explanation of the behavior of the subjects lies in Hobbes, not in Rousseau.
    Date: 2006–06
  9. By: Erdogdu, Oya Safinaz
    Abstract: Considering the importance of military expenditures on political and economical success of a government, this empirical study analyzes the relations between political stability, economic growth and military expenditures. Based on the theoretical model developed by Blomberg (1996), the vector autoregression analyzes results for a democratic country indicates the significance of military expenditures on political stability and private sector investment decisions.
    Keywords: Defense; Political Stability; Growth; VAR
    JEL: C32
    Date: 2006

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