New Economics Papers
on Collective Decision-Making
Issue of 2007‒09‒24
nine papers chosen by

  1. Congruence Among Voters and Contributions to Political Campaigns By Elena Panova
  2. The Expansion of Higher Education and Time-Consistent Taxation By Panu Poutvaara
  3. Arrow's Impossibility Theorem: Preference Diversity in a Single-Profile World By Allan M Feldman; Roberto Serrano
  4. Bogotá: the collapse of a political machine By Rafael Santos
  5. Competitive politics, simplified heuristics, and preferences for public goods By Felix Schlaepfer; Marcel Schmitt; Anna Roschewitz
  6. Comparing Small-Group and Individual Behavior in Lottery-Choice Experiments By Ronald J. Baker II; Susan K. Laury; Arlington W. Williams
  7. Institutions and Behavior: Experimental Evidence on the Effects of Democracy By Pedro Dal Bo; Andrew Foster; Louis Putterman
  8. Do Autocratic States Trade Less? By Aidt, T.S.; Gassebner, M.
  9. Cooperative Games: Core and Shapley Value By Roberto Serrano

  1. By: Elena Panova
    Abstract: This paper builds a theory of electoral campaign contributions. Interest groups contribute to political campaigns to signal their private information on the valence of candidates for office. Campaign contributions by an interest group enhance electoral fortunes by a candidate who is valent with this group. The candidate preferred by an interest group whose private information is the most precise receives the highest contributions and wins political office. Campaign contributions are smaller than donor electoral sorting benefits.
    Keywords: Campaign contributions, incumbency advantage
    JEL: D72 D82 M37
    Date: 2007
  2. By: Panu Poutvaara (University of Helsinki and IZA)
    Abstract: This paper analyzes educational choices and political support for subsidies to higher education in the presence of a time-consistency problem in income redistribution. There may be political support for so generous subsidization that it motivates the median voter to obtain higher education. As a result of increasing own income, the median voter prefers in the future lower taxes than without higher education. Therefore, the expansion of participation in higher education during the second half of the 20th century may have partly been driven by the aim to limit the political support for overly generous income redistribution.
    Keywords: education, time-consistency problem, voting, subsidies to education
    JEL: H52 I22 D72
    Date: 2007–08
  3. By: Allan M Feldman; Roberto Serrano
    Date: 2007
  4. By: Rafael Santos
    Abstract: In Bogotá the 1991 reforms obstructed a market for votes. Clientelism lost its effectiveness; citizens developed a vote of opinion and the city showed an outstanding performance in the provision of public goods and social services. This story is illustrated with a novel panel data at the neighborhood voting precinct level from 1988 to 2003. An interesting episode exposes the changing class preferentes of Bogotá citizens for each of its mayors. However, the main result is the structural break caused by the reforms. Prior to 1991, the areas with the most exposure to clientelism generated a greater percentage of votes for traditional parties and obtained a greater coverage of social services; since 1991, both relationships are no longer true. A political machine collapses.
    Date: 2007–08–09
  5. By: Felix Schlaepfer (Socioeconomic Institute, University of Zurich); Marcel Schmitt (Economics Division, Federal Research Institute WSL, Birmensdorf, Switzerland); Anna Roschewitz (Economics Division, Federal Research Institute WSL, Birmensdorf, Switzerland)
    Abstract: This paper examines the role of simplified heuristics in the formation of preferences for public goods. Political scientists have suggested that voters use simplified heuristics based on the positions of familiar parties to infer how a proposed policy will affect them and to cast a vote in line with their interests and values. Here, we use a two-stage field-survey experiment to investigate how knowledge of party positions affects policy choices. We followed standard procedures in developing an attribute-based choice experiment on alternative land-use policies in Switzerland. In contrast to the usual formulation, however, the hypothetical costs of the proposed policies were formulated as a percentage change in taxes. The benefit of this formulation relative to the usual absolute money amounts is that the credibility of the (hypothetical) costs for respondents does not depend on respondent income. Furthermore, the formulation allowed us to solicit party positions on the proposed policies. Six out of eight contacted parties provided their positions. We then conducted a split-sample mail survey where we included a table of the party positions with a sub-sample of the questionnaires. We report six main experimental results. (1) The response rate of the survey was unaffected by the party positions. (2) The proportion of no-choice answers was decreased by forty percent relative to the control. (3) The party information significantly affected the choices directly and in interaction with respondents’ general attitudes towards public spending for nature and landscape conservation and thus affected the way how individuals mapped from general attitudes to preferences for specific policies. (4) The information interacted with educational level in only eight out of forty choice sets, suggesting that even the more educated relied on simplified heuristics. (5) Respondents who knew the party positions were more sensitive to the tax attribute. (6) For respondents with medium and higher tax bills, the resulting willingness-to-pay estimates were decreased by a factor of two to ten relative to the control. These findings suggest that the party information helped the respondents to articulate more consistent preferences than in the treatment without the party information.
    Keywords: agriculture, bounded rationality, choice experiment, contingent valuation, landscape, heuristics, information, preference formation, public goods, voting
    JEL: D61 D70 D81 Q26 Q28 Q51
    Date: 2007–09
  6. By: Ronald J. Baker II (Millersville University of Pennsylvania); Susan K. Laury (Georgia State University); Arlington W. Williams (Indiana University Bloomington)
    Abstract: Lottery-choice experiments are conducted to compare risk preferences revealed by three-person groups versus isolated individuals. A lottery-choice experiment consists of a menu of paired lottery choices structured so that the crossover point from a low-risk to a high-risk lottery can be used to infer the degree of risk aversion. A between-subjects experiment of group versus individual lottery-choice decisions reveal that there is not a significant difference in the average crossover point, but lottery choices are affected by a significant interaction between subject composition (individual or group) and lottery winning percentage. Also, a three-phased individual-group-individual sequenced experiment reveals that the count of safe lotteries chosen by groups is, on average, significantly greater than the mean of the individual members. Finally, making a phase-two group decision has a significant impact on subsequent phase-three individual decisions relative to the initial phase-one (individual) decisions.
    Keywords: lab experiments, risk preferences, group decisions
    JEL: C91 C92 D80
    Date: 2007–09
  7. By: Pedro Dal Bo; Andrew Foster; Louis Putterman
    Date: 2007
  8. By: Aidt, T.S.; Gassebner, M.
    Abstract: The paper analyzes whether the political regime of a country inuences its involvement in international trade. Firstly, we develop a theoretical model that predicts that autocracies trade less than democracies. Secondly, we test the predictions of the model empirically using a panel of more than 130 countries for the years 1962 to 2000. In contrast to the existing literature, we use data on individual importing and exporting countries, rather than a dyadic set-up. In line with the model, we and that autocracies import substantially less than democracies, even after controlling for official trade policies. This finding is very stable and does not depend on a particular set-up or estimation technique. Key words: International trade; democracy; autocracy; gravity model.
    JEL: F13 F14 O24 P45 P51
    Date: 2007–08
  9. By: Roberto Serrano
    Date: 2007

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