New Economics Papers
on Collective Decision-Making
Issue of 2008‒02‒16
thirteen papers chosen by

  1. Campaign Promises and Political Factions By Elena Panova
  2. The governance of the World Bank : analysis and implications of the decisional power of the G10. By Arthur Foch
  3. Oligarchies in Spatial Environments By Ehlers, Lars; Storcken, Ton
  4. Power distribution and endogenous segregation. By Catherine Bros
  5. Free Triples, Large Indifference Classes and the Majority Rule By EHLERS, Lars; BARBERÀ, Salvador
  6. Approval voting and the Poisson-Myerson environment By Matias Nunez
  7. Preference Heterogeneity in Monetary Policy Committees By RIBONI, Alessandro; RUGE-MURCIA, Francisco J.
  8. Effects of Profitable Downsizing on Collective Bargaining By Sven Fischer; Werner Güth; Christoph Köhler
  9. One Round versus Two Round Elections: An Experimental Study By André Blais; Jean-François Laslier; Annie Laurent; Nicolas Sauger; Karine Van-Der-Straeten
  10. Contributing or Free-Riding?  A Theory of Endogenous Lobby Formation By Taiji Furusawa; Hideo Konishi
  11. Social Norms and Rationality of Choice By Bossert, Walter; Suzumura, Kotaro
  12. Election by Majority Judgement: Experimental Evidence By Michel Balinski; Rida Laraki
  13. Study on the Political Involvement in Senior Staffing and on the Delineation of Responsibilities Between Ministers and Senior Civil Servants By Alex Matheson; Boris Weber; Nick Manning; Emmanuelle Arnould

  1. By: Elena Panova
    Abstract: This paper builds a dynamic model of electoral competition with nonbinding campaign promises. We find that campaign promises by a candidate for office signal her political preferences and public policy that she intends to implement. The reason is that electoral competition induces her to pander campaign promises to political interests by a minimal majority of citizens. If their votes bring her in office, she has to raise them once again in order to be re-elected. For that, she needs to fulfill her electoral promises. To minimize the cost of pandering to re-election if in office, a candidate gives campaign promises that she would like to fulfill the most. She fulfills them if in office, unless the cost of fulfillment lies above the benefit from re-election. We show, furthermore, that representatives by a minimal majority of citizens form a faction to coordinate their electoral strategies, and we investigate the consequences of such political collusion.
    Keywords: Electoral promises, pork-barrel politics, political parties
    JEL: D72 D82
    Date: 2007
  2. By: Arthur Foch (Centre d'Economie de la Sorbonne)
    Abstract: This article discusses the World Bank's formal rules of governance. It states that theoretically, each of the World Bank's member states is represented within the decision making process but in practice it is otherwise. Indeed, we demonstrate that in reality the democratic imbalance in favor of the Most Developed Countries (MDCs), caused by the voting system of the WB, is much stronger than it appears. In the first place, our analysis of the formal decision making process demonstrates that the voting system is such that a coalition of particularly coordinated countries - the eleven countries of the G10 - can, on its own, constitute a majority permitting them to vote decisively on all issues. This implies that the remaining 174 members have no influence on voting results. Thus, this minority coalition alone is in position to approve loans and their attached conditions. In the second place, four features of the World Bank's governance which protect and re-enforce the power of this coalition are found. On the one hand, this analysis provides some explanations to the failure of various initiatives made to increase the voice of the Less Developed Countries (LDCs). On the other hand, it identifies several means susceptible of increasing the power of these countries in the institution. The main interest of this study shows that the democratic imbalance caused by the voting system is more important than it seems. Indeed, not only do the World Bank's formal rules of governance give the G10 the voting weight at all three levels of decision making but several governing features also permit the G10 to protect and re-enforce the power that they already have. Due to their right of veto, the MDCs can notably block any reform proposals.
    Keywords: World Bank, governance, decision-making power, decision-making authorities, conditionality.
    JEL: O16 O19 F35 F59
    Date: 2007–11
  3. By: Ehlers, Lars; Storcken, Ton
    Abstract: In spatial environments we consider social welfare functions satisfying Arrow’s requirements, i.e. weak Pareto and independence of irrelevant alternatives. Individual preferences measure distances between alternatives according to the Lp-norm (for a fixed p => 1). When the policy space is multi-dimensional and the set of alternatives has a non-empty interior and it is compact and convex, any quasi-transitive welfare function must be oligarchic. As a corollary we obtain that for transitive welfare functions weak Pareto, independence of irrelevant alternatives, and non-dictatorship are inconsistent if the set of alternatives has a non-empty interior and it is compact and convex.
    JEL: D70 D71
    Date: 2007
  4. By: Catherine Bros (Centre d'Economie de la Sorbonne)
    Abstract: The aim of this paper is to provide a detailed analysis of the process of segregation formation. The claim is that segregation does not originate from prejudice or exogenous psychological factors. Rather it is the product of strategic interactions among social groups in a setting where one group has captured power. While using a model featuring random matching and repeated games, it is shown that whenever one group seizes power, members of other groups will perceive additional value in forging long term relationships with the mighty. They will systematically cooperate with the latter either because it is in their interest to do so or because they do not have other choice. The mighty natural response to this yearning to cooperate is to refuse intergroup relationships. The dominated group will best reply to this new situation by in turn rejecting the relationships and a segregation equilibrium emerges. Segregation stems from the systematic cooperation by one group with another. However, not all societies that have experienced power captures converge towards segregation. It is shown that the proportion of individuals that are actually powerful within the mighty group determines convergence towards segregation.
    Keywords: Segration, discrimination, power, caste, repeated games, prisoner's dilemma, clubs, status, social organizations.
    JEL: D02 D63 D71 D80 O15
    Date: 2008–01
  5. By: EHLERS, Lars; BARBERÀ, Salvador
    Abstract: We consider situations in which agents are notable to completely distinguish between all alternatives. Preferences respect individual objective indifferences if any two alternatives are indifferent whenever an agent cannot distinguish between them. We present necessary and sufficient conditions of such a domain of preferences under which majority rule is quasi-transitive and thus Condorcet winner sexist for any set of alternatives. Finally, we compare our proposed restrictions with others in the literature, to conclude that they are independent of any previously discussed domain restriction.
    Keywords: Quasi-Transitivity ; Majority Rule
    Date: 2007
  6. By: Matias Nunez (PREG - Pole de recherche en économie et gestion - CNRS : UMR7176 - Polytechnique - X)
    Abstract: Dans ce papier, de nouveaux résultats sont fournis dans le modèle de Poisson-Myerson. Ces résultats se révèlent utiles pour l’étude du vote par assentiment. En effet, le Théorème d’Equivalence des Magnitudes (MET) réduit fortement la complexité du calcul des magnitudes des pivots. Un exemple est fourni qui contraste avec les résultats de Laslier (2004) sur le vote par assentiment. Dans une situation de vote avec trois candidats, le gagnant de l’élection ne coïncide pas avec le gagnant de Condorcet du profil à l’équilibre. Une discussion sur la stabilité de l’équilibre est fournie.
    Date: 2007
  7. By: RIBONI, Alessandro; RUGE-MURCIA, Francisco J.
    Abstract: This short paper employs individual voting records of the Monetary Policy Committee (MPC) of the Bank of England to study heterogeneity in policy preferences among committee members. The analysis is carried out using a simple generalization of the standard Neo Keynesian framework that allows members to dier in the weight they give to output compared with in ation stabilization and in their views regarding optimal inflation and natural output. Results indicate that, qualitatively, MPC members are fairly homogeneous in their policy preferences, but that there are systematic quantitative dierences in their policy reaction functions that are related to the nature of their membership and career background.
    Keywords: Committees, reaction functions, Bank of England
    Date: 2007
  8. By: Sven Fischer (Department of Economics, University College London); Werner Güth (Max Planck Institute of Economics, Jena); Christoph Köhler (Friedrich-Schiller-University Jena, Institute for Sociology, Economic and Social Structure Group)
    Abstract: We experimentally test how acceptance thresholds react to the decision of the proposer in a three party ultimatum game to exclude one of two responders with veto power from the game. We elicit responder acceptance thresholds in case the proposer decides to exclude one of them, what increases the available pie, and in case he doesn't exclude him despite strong monetary incentives. We ?nd that on the aggregate level the proposer's decision has no effect on acceptance thresholds. However, if the proposer excludes one responder, the distribution of thresholds becomes bimodal, indicating a polarization in behavior.
    Keywords: bargaining, experiment, labor markets
    JEL: C91 J52
    Date: 2008–02–12
  9. By: André Blais (Université de Montréal -); Jean-François Laslier (PREG - Pole de recherche en économie et gestion - CNRS : UMR7176 - Polytechnique - X); Annie Laurent (Université de Lille II -); Nicolas Sauger (CEVIPOF - Centre de Recherches Politiques de Sciences Po - CNRS : UMR7048 - Institut d'Etudes Politiques de Paris); Karine Van-Der-Straeten (PSE - La plante et son environnement - CNRS : IFR87 - INRA - INAPG - Université Paris Sud - Paris XI)
    Abstract: L'article présente une série d'expériences dans lesquelles les participants étaient invités à voter dans quatre élections au scrutin à un tour et quatre élections au scrutin à deux tours, avec le même ensemble de cinq candidats parmi lesquels trois étaient viables et cinq ne l'étaient pas. Les expérimences visaient à tester les arguments avancés par Duverger et Cox à propos de la propension à voter sincèrement ou non dans les élections à un ou deux tours. Dans les deux systèmes on observe une tendance forte à déserter les deux candidats non viables. Les données sont plus favorables à la théorie de Cox qu'à celle de Duverger.
    Keywords: Vote stratégique;Cox;Duverger
    Date: 2007
  10. By: Taiji Furusawa (Hitotsubashi University); Hideo Konishi (Boston College)
    Abstract: We consider a two-stage public goods provision game: In the first stage, players simultaneously decide if they will join a contribution group or not. In the second stage, players in the contribution group simultaneously offer contribution schemes in order to influence the government's choice on the level of provision of public goods. Using perfectly coalition-proof Nash equilibrium (Bernheim, Peleg and Whinston, 1987 JET), we show that the set of equilibrium outcomes is equivalent to an "intuitive" hybrid solution concept, the free-riding-proof core, which is always nonempty but does not necessarily achieve global efficiency. It is not necessarily true that an equilibrium lobby group is formed by the players with highest willingness-to-pay, nor is it a consecutive group with respect to their willingnesses-to-pay. We also show that the equilibrium level of public goods provision shrinks to zero as the economy is replicated.
    Keywords: common agency, public good, free rider, core, lobby, coalition formation, coalition-proof Nash equilibrium
    JEL: C71 C72 F13 H41
    Date: 2008–02–11
  11. By: Bossert, Walter; Suzumura, Kotaro
    Abstract: Ever since Sen (1993) criticized the notion of internal consistency of choice, there exists a wide spread perception that the standard rationalizability approach to the theory of choice has difficulties coping with the existence of external social norms. This paper introduces a concept of norm-conditional rationalizability and shows that external social norms can be accommodated so as to be compatible with norm-conditional rationalizability by means of suitably modified revealed preference axioms in the theory of rational choice on general domains à la Richter (1966;1971) and Hansson (1968)
    JEL: D11 D71
    Date: 2007
  12. By: Michel Balinski (PREG - Pole de recherche en économie et gestion - CNRS : UMR7176 - Polytechnique - X); Rida Laraki (PREG - Pole de recherche en économie et gestion - CNRS : UMR7176 - Polytechnique - X)
    Abstract: Le jugement majoritaire est une méthode d'élection. Cette méthode est l'aboutissement d'une nouvelle théorie du choix social où les électeurs jugent les candidats au lieu de les ranger. La théorie est développée dans d'autres publications ([2, 4]). Cet article décrit et analyse des expériences électorales conduites pendant les deux dernières élections présidentielles françaises dans plusieurs buts: (1) démontrer que le jugement majoritaire est une méthode pratique, (2) la décrire et établir ses principales propriétés, (3) démontrer qu'elle échappe aux paradoxes classiques, et (4) illustrer comment dans la pratique tous les mécanismes de vote connus violent certains critères importants. Les démonstrations utilisent des concepts et méthodes nouveaux.
    Date: 2007
  13. By: Alex Matheson; Boris Weber; Nick Manning; Emmanuelle Arnould
    Abstract: Political involvement in administration is essential for the proper functioning of a democracy. Without this an incoming political administration would find itself unable to change policy direction. However public services need protection against being misused for partisan purposes, they need technical capacity which survives changes of government, and they need protection against being used to impair the capacity of future governments to govern.
    Date: 2007–07

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