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on Collective Decision-Making |
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Issue of 2007‒06‒30
seven papers chosen by |
| By: | Roland Hodler; Simon Loertscher; Dominic Rohner |
| Abstract: | We study a game with asymmetric information to analyze whether an incumbent can improve his reelection prospects using distorted terror alerts. The voters’ preferred candidate depends on the true terror threat level, and the voters are rational and therefore aware of the incumbent’s incentive to distort alerts. In equilibrium, a moderately “Machiavellian” incumbent reports low and high threat levels truthfully, but issues the same distorted alert for a range of intermediate threat levels. He thereby ensures his reelection for some threat levels at which he would not be reelected under full information. |
| Keywords: | Terror alerts; voting and elections; signalling; political economics |
| JEL: | D72 C72 D82 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:mlb:wpaper:995&r=cdm |
| By: | Roland Hodler; Simon Loertscher; Dominic Rohner |
| Abstract: | We study incumbency advantage in a dynamic game with incomplete information between an incumbent and a voter. The incumbent knows the true state of the world, e.g., the severity of an economic recession or the level of criminal activities, and can choose the quality of his policy. This quality and the state of the world determine the policy outcome, i.e., the economic growth rate or the number of crimes committed. The voter only observes the policy outcome and then decides whether to reelect the incumbent or not. Her preferences are such that she would reelect the incumbent under full information if and only if the state of the world is above a given threshold level. In equilibrium, the incumbent is reelected in more states of the world than he would be under full information. In particular, he chooses ine±cient policies and generates mediocre policy outcomes whenever the voter's induced belief distribution will be such that her expected utility of reelecting the incumbent exceeds her expected utility of electing the opposition candidate. Hence, there is an incumbency advantage through ine±cient policies. We provide empirical evidence consistent with the prediction that reelection concerns may induce incumbents to generate mediocre outcomes. |
| Keywords: | Elections; Incumbency Advantage; Political Economics |
| JEL: | D72 C73 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:mlb:wpaper:996&r=cdm |
| By: | Kumabe, Masahiro; Mihara, H. Reiju |
| Abstract: | The Nakamura number of a simple game plays a critical role in preference aggregation (or multi-criterion ranking): the number of alternatives that the players can always deal with rationally is less than this number. We comprehensively study the restrictions that various properties for a simple game impose on its Nakamura number. We find that a computable game has a finite Nakamura number greater than three only if it is proper, nonstrong, and nonweak, regardless of whether it is monotonic or whether it has a finite carrier. The lack of strongness often results in alternatives that cannot be strictly ranked. |
| Keywords: | Nakamura number; voting games; the core; Turing computability; axiomatic method; multi-criterion decision-making |
| JEL: | C69 D71 C71 |
| Date: | 2007–06–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3684&r=cdm |
| By: | Cervellati, Matteo; Fortunato, Piergiuseppe; Sunde, Uwe |
| Abstract: | This paper investigates the endogenous emergence of democracy and rule of law in an economy where heterogeneous individuals can get involved in predation activities. Decisions about public policies concern the extent of fiscal redistribution and property rights, whose costs depend on the extent of predation in the population. We characterize the dynamic evolution of the economy in which both the political regimes and public policies are endogenously determined. The theory delivers several novel results. Multiple politico-economic equilibria involving different public policies can be sustained conditional on beliefs about property rights enforcement. Democratization is endogenous, but the features of democracies are shown to be crucially related to the conditions under which democratization initially takes place. Democratic transitions supported by a large consensus serve as coordination device and lead to better protection of property and more stable political systems than democratic transitions imposed under conflictual environments. Conflictual transitions lead to failed democracies with potentially worse property rights protection than oligarchies. The novel predictions are in line with existing evidence and with results from newly collected data on constitutional principles. |
| Keywords: | commitment; conflict; consensual democracy; constitutional principles; democratization; inequality; oligarchy |
| JEL: | H10 N10 O10 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:6328&r=cdm |
| By: | Bettina Klaus; Flip Klijn |
| Abstract: | We consider one-to-one matching (roommate) problems in which agents (students) can either be matched as pairs or remain single. The aim of this paper is twofold. First, we review a key result for roommate problems (the ``lonely wolf'' theorem) for which we provide a concise and elementary proof. Second, and related to the title of this paper, we show how the often incompatible concepts of stability (represented by the political economist Adam Smith) and fairness (represented by the political philosopher John Rawls) can be reconciled for roommate problems. |
| Keywords: | roommate problem, stability, fairness |
| JEL: | C62 C78 |
| Date: | 2007–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:706.07&r=cdm |
| By: | Facundo Albornoz; Jayasri Dutta |
| Abstract: | Living in a democratic society has been internationally recognized as a basic human right. While most of the literature tries to identify the effect of democracy on economic prosperity, little work has been done to understand the determinants of economic growth under democracy. This paper examines whether the determinants of economic growth in Latin America are sensitive to political institutions. We find two stark differences between democratic and autocratic growth: (1) democratic government consumption is significantly positive for economic growth. The opposite is true for autocratic government consumption. (2) The impact of human capital is only significant under democracies. |
| Keywords: | Economic Growth, Latin America, Democracy, Autocracy, Government Consumption, human capital |
| JEL: | H50 P16 N46 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:07-06&r=cdm |
| By: | John Latsis |
| Abstract: | This paper proposes an alternative reading of what conventions are and how they might be used by social scientists in theoretical and empirical work. In the first section of the paper, I trace the modern conception of convention to two characterisations offered by David Hume. I claim that Hume’s two notions of convention provide the basic intuition behind the majority of modern approaches. The second section highlights an important and often implicit characteristic that most theories of convention share: the desire to explain the normativity of conventional practices has led commentators to characterise convention as a sub-category of social rules. I go on to argue that the Wittgensteinian literature on rule-following undermines this strategy and that rules cannot provide the normative guidance required of them by social theorists. The third section describes a promising alternative. I argue that the notion of exemplar, first proposed by Thomas Kuhn in the history and philosophy of science, can be used to clarify and advance the study of convention. The paper concludes with a illustration of how this alternative framework can be used by social scientists. |
| JEL: | D43 D51 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2007-3&r=cdm |