New Economics Papers
on Collective Decision-Making
Issue of 2007‒05‒12
nine papers chosen by

  1. Voting, Lobbying, and the Decentralization Theorem By Lockwood, Ben
  2. Un'analisi economica della partecipazione ai referendum abrogativi. By Ricciuti, Roberto
  3. Voting as a Lottery. By Giuseppe Attanasi, Luca Corazzini, Francesco Passarelli
  4. Measuring Power in Weighted Majority Games By Barua, Rana; Chakravarty, Satya R.; Roy, Sonali
  5. A new characterization of the Banzhaf index of power By Barua, Rana; Chakravarty, Satya R.; Roy, Sonali
  6. A characterization and some properties of the Banzhaf-Coleman-Dubey-Shapley sensitivity index By Barua, Rana; Chakravarty, Satya R.; Roy, Sonali; Sarka, Palash
  7. On the Coleman indices of voting power By Barua, Rana; Chakravarty, Satya R.; Roy, Sonali
  8. Garbled Elections By Patrick W. Schmitz; Thomas Tröger
  9. Party Formation and Racism By Anesi, Vincent; De Donder, Philippe

  1. By: Lockwood, Ben (University of Warwick and CEPR)
    Abstract: This paper revisits the fiscal "decentralization theorem", by relaxing the role of the assumption that governments are benevolent, while retaining the assumption of policy uniformity. If instead, decisions are made by direct majority voting, (i) centralization can welfare-dominate decentralization even if there are no externalities and regions are heterogenous ; (ii) decentralization can welfare-dominate centralization even if there are positive externalities and regions are homogenous. The intuition is that the insensitivity of majority voting to preference intensity interacts with the different inefficiencies in the two fiscal regimes to give second-best results. Similar results obtain when governments are benevolent, but subject to lobbying, because now decisions are too sensitive to the preferences of the organised group.
    Keywords: Decentralization, majority voting, lobbying, local public goods.
    JEL: H41 H70 H72
    Date: 2007
  2. By: Ricciuti, Roberto
    Abstract: In questo lavoro viene analizzata la partecipazione dei cittadini ai referendum abrogativi con particolare riferimento a quattro possibili determinati. I risultati mostrano che i referendum distributivi hanno una partecipazione al voto maggiore di quella dei referendum di efficienza; maggiore è la percentuale di elettori che si riconoscono nei partiti che sostengono l'astensione, minore è la percentuale di votanti. Inoltre i referendum votati in giugno presentano una minore partecipazione. Il numero di referendum votati contemporaneamente non ha effetti sulla percentuale di votanti fino ad un numero di quattro. A partire da questa analisi si discutono alcune proposte di riforma. In this paper we analyse four determinants of turnout in petition referendums. We find that distributive referendums have higher turnout than efficiency referendums; the higher the percentage obtained by parties campaigning for abstention, the lower turnout. Furthermore, referendums held in June show significantly less voters than in other months. The number of referendums voted simultaneously has not effect on turnout up to four referendums. Starting from these results we discuss possible reforms.
    Date: 2007–05
  3. By: Giuseppe Attanasi, Luca Corazzini, Francesco Passarelli (ISLA, Universita' Bocconi, Milano)
    Abstract: Voting is a lottery in which an individual wins if she belongs to the majority or loses if she falls into the minority. The probabilities of winning and losing depend on the voting rules. The risk of losing can be reduced by increasing the majority threshold. This however has the negative effect of also lowering the chance to win. We compute the individuals preferred majority threshold, as a function of her risk attitudes, her voting power and her priors about how the other individuals will vote. We find that the optimal threshold is higher when an individual is more risk averse, less powerful, and less optimistic about the chance that the others will vote like her. De facto, raising the threshold is a form of protection against the higher risk of being tyrannized by an unfavorable majority.
    Keywords: optimal majority rule, super-majority, risk aversion, weighted votes, voter optimism.
    JEL: D72 D81 H11
    Date: 2007–05
  4. By: Barua, Rana; Chakravarty, Satya R.; Roy, Sonali
    Abstract: This paper suggests an indicator of power in weighted majority games. An indicator of power determines the ability of a voter to influence the outcomes of the voting bodies he belongs to. In a weighted majority game each voter is assigned a certain nonnegative real number weight and there is a positive real number quota such that a group of voters can pass a resolution if the sum of the weights of the group members is at least as high as the given quota. The new index is shown to satisfy all the reasonable postulates for an index of voting power. If attention is restricted to weighted majority game only, then this index may be considered as an extension of the Banzhaf-Coleman power indices. Finally, the paper develops an axiomatic char­acterization of the new index.
    Date: 2007–05–07
  5. By: Barua, Rana; Chakravarty, Satya R.; Roy, Sonali
    Abstract: This paper develops a new axiomatic characterization of the Banzhaf index of power using four axioms from four different contributions to the area. A nice feature of the characterization is independence of the axioms showing importance of each of them in the exercise.
    Keywords: Voting game; voting power; Banzhaf index; axioms; characterization
    Date: 2007–05–07
  6. By: Barua, Rana; Chakravarty, Satya R.; Roy, Sonali; Sarka, Palash
    Abstract: A sensitivity index quantifies the degree of smoothness with which it responds to fluctuations in the wishes of the members of a voting body. This paper characterizes the Banzhaf–Coleman–Dubey–Shapley sensitivity index using a set of independent axioms. Bounds on the index for a very general class of games are also derived.
    Keywords: Voting game; The Banzhaf–Coleman–Dubey–Shapley sensitivity index; Characterization; Bounds
    Date: 2007–05–07
  7. By: Barua, Rana; Chakravarty, Satya R.; Roy, Sonali
    Abstract: Coleman [1971. Control of collectives and the power of a collectivity to act. In: Lieberman, B. (Ed.), Social Choice. Gordon and Breach, New York, pp. 269–298] suggested two indices of voting power, power to prevent an action and power to initiate an action. This paper rigorously demonstrates relationship between the two indices and shows that they satisfy several attractive properties.
    Keywords: Game theory; Voting game; Voting power; Coleman’s indices; Properties
    Date: 2007–05–07
  8. By: Patrick W. Schmitz (Department of Economics, University of Cologne, Germany, and CEPR.,˜schmitz.); Thomas Tröger (Department of Economics, University of Bonn, Germany.,
    Abstract: Majority rules are frequently used to decide whether or not a public good should be provided, but will typically fail to achieve an efficient provision. We provide a worst-case analysis of the majority rule with an optimally chosen majority threshold, assuming that voters have independent private valuations and are exante symmetric (provision cost shares are included in the valuations). We show that if the population is large it can happen that the optimal majority rule is essentially no better than a random provision of the public good. But the optimal majority rule is worst-case asymptotically efficient in the large-population limit if (i) the voters’ expected valuation is bounded away from 0, and (ii) an absolute bound for valuations is known.
    Date: 2006–10
  9. By: Anesi, Vincent; De Donder, Philippe
    Abstract: We develop a model where voters differ in their exogenous income and in their ideological views regarding what we call 'racism'. Electoral competition, modelled à la Levy (2004), takes place between (one or several) parties which propose platforms consisting of both an ideological and an economic dimension. Our objective is to explain the emergence of racist policies when a majority of voters is not racist, and to understand the role played by political parties in this emergence. We first show that, in a pure citizen-candidate model where parties are absent, the only equilibrium consists of the non-racist policy. We then show that allowing for the formation of political parties generates equilibria with racist policies. Finally, our main result states that, if the economic issue is sufficiently salient compared to the ideological one, all equilibria consist of a racist policy, and that the lowest degree of racism of these policies increases with the proportion of poor people in the economy.
    Keywords: electoral competition; polarization; political parties; salience
    JEL: D72
    Date: 2007–05

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