nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2007‒12‒15
eight papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. A study of Approval voting on Large Poisson Games By Matias Nunez
  2. The Effects of Tax Competition when Politicians Create Rents to Buy Political Support By Wolfgang Eggert; Peter Birch Sørensen
  4. Arm’s Length Provision of Public Services By Morten Bennedsen; Christian Schultz
  5. The Cleavage Model, Ethnicity and Voter Alignment in Africa: Conceptual and Methodological Problems Revisited By Gero Erdmann
  6. American Idol: Should it be a Singing Contest or a Popularity Contest? By Amegashie, J. Atsu
  7. Sequentially Stable Coalition Structures By Funaki, Y.; Yamato, T.
  8. Terrorism and Cabinet Duration: An Empirical Analysis By Martin Gassebner; Richard Jong-A-Pin; Jochen O. Mierau

  1. By: Matias Nunez (LEEP - Laboratoire d'econometrie de l'école polytechnique - CNRS : UMR7657 - Polytechnique - X)
    Abstract: Approval voting features are analysed in a context of large elections with strategic voters: Myerson's Large Poisson Games. I first establish the Magnitude Equiva- lence Theorem (MET) which substantially reduces the complexity of computing the magnitudes of pivotal events. I also show that the Winner of the election coincides with the Profile Condorcet Winner at equilibrium when preferences are restricted to be single-peaked. This is a positive result that strengthens the positive conclusions some scholars have previously drawn over this voting rule. I finally show that, with- out the previous restriction over preferences, both concepts do not generally coincide anymore.
    Date: 2007–11–28
  2. By: Wolfgang Eggert (University of Paderborn); Peter Birch Sørensen (Department of Economics, University of Copenhagen)
    Abstract: We set up a probabilistic voting model to explore the hypothesis that tax competition improves public sector efficiency and social welfare. In the absence of tax base mobility, distortions in the political process induce vote-maximising politicians to create rents to public sector employees. Allowing tax base mobility may be welfare-enhancing up to a point, because the ensuing tax competition will reduce rents. However, if tax competition is carried too far, it will reduce welfare by causing an underprovision of public goods. Starting from an equilibrium where tax competition has eliminated all rents, a coordinated rise in capital taxation will always be welfare-improving. For plausible parameter values it will even be welfare-enhancing to carry tax coordination beyond the point where rents to public sector workers start to emerge.
    Keywords: tax competition; rent seeking; probabilistic voting
    JEL: D72 D73 H87
    Date: 2007–12
  3. By: Paulo Roberto Arvate; George Avelino; José A. Tavares
    Date: 2007
  4. By: Morten Bennedsen (Copenhagen Business School); Christian Schultz (Department of Economics, University of Copenhagen)
    Abstract: We analyze the economic consequences of strategic delegation of the right to decide between public or private provision of governmental service and/or the authority to negotiate and renegotiate with the chosen service provider. Our model encompass both bureaucratic delegation from a government to a privatization agency and electoral delegation from voters to a government. We identify two powerfull effects of delegation when contracts are incomplete: The incentive effect increases the incentive part of service providers’ remuneration and we show that strategic delegation may substitute formal incentive contracts. The bargaining effect improves the bargaining position vis a vis a private firm with market power and leads to a lower price for the service.
    Keywords: outsourcing; strategic delegation; incentives; incomplete contracting; market power; representative democracy
    JEL: D72 L33 L97
    Date: 2007–11
  5. By: Gero Erdmann (GIGA Institute of African Affairs)
    Abstract: Recent research on political parties and ethnicity has challenged the conventional wisdom about ethnicity as the major factor that explains voter alignment in Africa. The paper maintains that the cleavage model, although modified to include ethnicity, still provides heuristically the best foundation for the explanation of party formation and voting behaviour in Africa. It points out that inconclusive and contradicting research results about the salience of ethnicity can be attributed to a variety of unresolved methodological and conceptual problems linked to the ‘fluidity’ of the concept of ethnicity. To overcome these problems refined research designs and more sophisticated analytical tools are required. Finally, it is safe to assume that the relevance of ethnicity for the formation of party systems and voter alignment is not a uniform pattern across Africa, but will differ from one country to the other.
    Keywords: Africa, social cleavages, cleavage model, ethnicity, political parties, party systems
    Date: 2007–12
  6. By: Amegashie, J. Atsu
    Abstract: In the very popular FOX TV reality show, American Idol, the judges, who are presumably experts in evaluating singing effort, have no voting power when the field is narrowed to the top twenty-four contestants. It is only the votes of viewers that count. In the 2007 season of the show, Simon Cowell, a judge and the brainchild of the show, threatened to quit the show if a contestant, Sanjaya Malakar, who was clearly a low-ability contestant, won the competition. He was concerned that the show was becoming a popularity contest instead of a singing contest. Is this a problem? Not necessarily. I show that, under certain conditions, making success in the contest dependent on a contestant’s popularity and not solely on her singing ability or performance, could paradoxically increase aggregate singing effort. It may be optimal to give the entire voting power to the viewers whose evaluation of singing effort or ability is noisier.
    JEL: D4
    Date: 2007–12–12
  7. By: Funaki, Y.; Yamato, T. (Tilburg University, Center for Economic Research)
    Abstract: In this paper, we examine the question of which coalition structures farsighted players form in coalition formation games with externalities. We introduce a stability concept for a coalition structure called a sequentially stable coalition structure. Our concept of domination between two coalition structures is based on a ?step-by-step? approach to describe negotiation steps concretely by restricting how coalition structures can change: when one coalition structure is changed to another one, either (i) only one merging of two separate coalitions into a coalition occurs, or (ii) only one breaking up of a coalition into two separate coalitions happens. As applications of our stability notion, we show that the efficient grand coalition structure can be sequentially stable in simple partition function form games and common pool resource games.
    JEL: C70 C71 D62
    Date: 2007
  8. By: Martin Gassebner (Department of Management, Technology, and Economics, ETH Zurich); Richard Jong-A-Pin (University of Groningen, Faculty of Economics and Business, The Netherlands); Jochen O. Mierau (University of Groningen, Faculty of Economics and Business, The Netherlands)
    Abstract: We examine the relationship between terrorism and cabinet duration. Our data set includes more than 2,400 cabinets in over 150 countries in the period 1968-2002. We find a small, but significant effect of terrorism on the probability of government failure. Furthermore, we find that the impact of terrorism depends on the type of attack and is larger in case of more severe attacks. Marginal effect calculations show that the impact of terror on cabinet duration is larger than the impact of economic variables such as economic growth, but less than the impact of a civil war or a government crisis. Our results suggest that cabinets in countries with high levels of terrorism are particularly vulnerable to terrorist attacks.
    Keywords: terror, political stability, cabinet dissolution
    JEL: D72 F59 C25
    Date: 2007–11

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