nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2008‒08‒21
nine papers chosen by
Roland Kirstein
Otto von Guericke University Magdeburg

  1. ELECTORAL RULES AND POLITICIANS' BEHAVIOR: A MICRO TEST By Stefano Gagliarducci; Tommaso Nannicini; Paolo Naticchioni
  2. Priorities in the Location of Multiple Public Facilities By BOCHET, Olivier; GORDON, Sidartha
  3. Intra-Group Competition and Inter-Group Conflict: An Application to Northern Ireland By Colin Jennings
  4. Monetary Policy by Committee:Consensus, Chairman Dominance or Simple Majority? By RIBONI, Alessandro; RUGE-MURCIA, Francisco J.
  5. “Mathématique Sociale" and Mathematics. A case study: Condorcet’s effect and medians. By Bernard Monjardet
  6. Dynamics and Stability of Constitutions, Coalitions, and Clubs By Daron Acemoglu; Georgy Egorov; Konstantin Sonin
  7. Multi-Profile Intergenerational Social Choice By BOSSERT, Walter; SUZUMURA, Kotaro
  8. How does party fractionalization convey preferences for redistribution in parliamentary democracies? By Bruno Amable; Donatella Gatti; Elvire Guillaud
  9. Equilibrium Rejection of a Mechanism By Celik, Gorkem; Peters, Michael

  1. By: Stefano Gagliarducci; Tommaso Nannicini; Paolo Naticchioni (CEMFI, Centro de Estudios Monetarios y Financieros)
    Abstract: Theory provides many explanations about the influence of electoral rules on politicians’ equilibrium behavior. With a few exceptions, all models agree that majoritarian elections are associated with more targeted redistribution and lower politicians’ rents than proportional representation. To sidestep the identification problems of previous empirical studies based on country-level data, we test these hypotheses using micro data for the mixed-member Italian House of Representatives. In particular, we address the nonrandom selection into different electoral systems by exploiting a particular feature of the Italian two-tier elections from 1994 to 2006: candidates could run for both the majoritarian and the proportional tier, but if they won in both tiers they had to accept the majoritarian seat. Focusing on elections decided by a narrow margin allows us to generate quasi-experimental estimates of the impact of the electoral rule. The main results confirm theoretical predictions, as majoritarian representatives put forward a higher proportion of bills targeted at local areas and show lower absenteeism rates than their proportional colleagues.
    Keywords: Electoral rule, politicians, targeted redistribution, rents, regression discontinuity design, treatment effect.
    JEL: D72 P16 C21
    Date: 2007–11
  2. By: BOCHET, Olivier; GORDON, Sidartha
    Abstract: A collective decision problem is described by a set of agents, a profile of single-peaked preferences over the real line and a number k of public facilities to be located. We consider public facilities that do not su¤er from congestion and are non-excludable. We provide a characterization of the class of rules satisfying Pareto-efficiency, object-population monotonicity and sovereignty. Each rule in the class is a priority rule that selects locations according to a predetermined priority ordering among interest groups. We characterize each of the subclasses of priority rules that respectively satisfy anonymity, hiding-proofness and strategy-proofness. In particular, we prove that a priority rule is strategy-proof if and only if it partitions the set of agents into a fixed hierarchy. Alternatively, any such rule can be viewed as a collection of fixed-populations generalized peak-selection median rules (Moulin, 1980), that are linked across populations, in a way that we describe.
    Keywords: Multie blic facilities, Priority rules, Hierarchical rules, Object-lation-monotonicity, Sovereignty, Anonymity, Strategy-oofness, Generalized median rules, Hiding-oofness.
    JEL: D60 D63 D70 D71 H41
    Date: 2008
  3. By: Colin Jennings
    Abstract: This paper reviews four economic theories of leadership selection in conflictual settings. The first of these by Cukierman and Tomassi (1998) labeled the ‘information rationale’, argues that hawks may actually be necessary to initiate peace agreements. The second labeled the ‘bargaining rationale’ borrowing from Hamlin and Jennings (2007) agrees with the conventional wisdom that doves are more likely to secure peace, but post-conflict there are good reasons for hawks to be rationally selected. The third found in Jennings and Roelfsema (2008) is labeled the social psychological rationale. This captures the idea of a competition over which group can form the strongest identity, so can apply to group choices which do not impinge upon bargaining power. As in the bargaining rationale, dove selection can be predicted during conflict, but hawk selection post-conflict. Finally, the expressive rationale is discussed which predicts that regardless of the underlying structure of the game (informational, bargaining, psychological) the large group nature of decision-making by making individual decision makers non-decisive in determining the outcome of elections may cause them to make choices based primarily on emotions which may be invariant with the mode of group interaction, be it conflictual or peaceful. Finally, the paper analyses the extent to which the theories can throw light on Northern Ireland electoral history over the last 25 years.
    Keywords: conflict; strategic delegation; expressive choice; Northern Ireland
    JEL: D72 D74 H77
    Date: 2008–07
  4. By: RIBONI, Alessandro; RUGE-MURCIA, Francisco J.
    Abstract: This paper studies the theoretical and empirical implications of monetary policy making by committee under three different voting protocols. The protocols are a consensus model, where super-majority is required for a policy change; an agenda-setting model, where the chairman controls the agenda; and a simple majority model, where policy is determined by the median member. These protocols give preeminence to different aspects of the actual decision making process and capture the observed heterogeneity in formal procedures across central banks. The models are estimated by Maximum Likehood using interest rate decisions by the committees of five central banks, namely the Bank of Canada, the Bank of England, the European Central Bank, the Swedish Riksbank, and the U.S. Federal Reserve. For all central banks, results indicate that the consensus model is statically superior to the alternative models. This suggests that despite institutionnal differences, committees share unwritten rules and informal procedures that deliver observationally equivalent policy decisions.
    Keywords: Committees, voting models, status-quo bias, median voter
    JEL: D7 E5
    Date: 2008
  5. By: Bernard Monjardet (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, CAMS - Centre d'Analyse et de Mathématiques Sociales - Ecole des Hautes Etudes en Sciences Sociales)
    Abstract: The “effet Condorcet” refers to the fact that the application of the pair-wise majority rule to individual preference orderings can generate a collective preference containing cycles. Condorcet’s solution to deal with this disturbing fact has been recognized as the search for a median in a certain metric space. We describe the many areas of "applied" or "pure" mathematics where the notion of (metric) median has appeared. If it were actually necessary to give examples proving that “social mathematics” is mathematics, the median case would provide a convincing example.
    Keywords: Condorcet’s effect ; Fermat’s point ; majority rule ; "Mathématique sociale" ; median algebra ; metric space ; permutohedron
    Date: 2008
  6. By: Daron Acemoglu; Georgy Egorov; Konstantin Sonin
    Abstract: A central feature of dynamic collective decision-making is that the rules that govern the procedures for future decision-making and the distribution of political power across players are determined by current decisions. For example, current constitutional change must take into account how the new constitution may pave the way for further changes in laws and regulations. We develop a general framework for the analysis of this class of dynamic problems. Under relatively natural acyclicity assumptions, we provide a complete characterization of dynamically stable states as functions of the initial state and determine conditions for their uniqueness. We show how this framework can be applied in political economy, coalition formation, and the analysis of the dynamics of clubs. The explicit characterization we provide highlights two intuitive features of dynamic collective decision-making: (1) a social arrangement is made stable by the instability of alternative arrangements that are preferred by sufficiently many members of the society; (2) efficiency-enhancing changes are often resisted because of further social changes that they will engender.
    JEL: C71 D71 D74
    Date: 2008–08
  7. By: BOSSERT, Walter; SUZUMURA, Kotaro
    Abstract: Ferejohn and Page transplanted a stationarity axiom from Koopmans’ theory of impatience into Arrow’s social choice theory with an infinite horizon and showed that the Arrow axioms and stationarity lead to a dictatorship by the first generation. We prove that the negative implications of their stationarity axiom are more far-reaching: there is no Arrow social welfare function satisfying their stationarity axiom. We propose a more suitable stationarity axiom, and show that an Arrow social welfare function satisfies this modified version if and only if it is a lexicographic dictatorship where the generations are taken into consideration in chronological order.
    Keywords: Multi-Profile Social Choice, Infinite-Horizon Intergenerational Choice, Lexicograic Dictatorshi.
    JEL: D71
    Date: 2008
  8. By: Bruno Amable; Donatella Gatti; Elvire Guillaud
    Abstract: In this paper, we highlight the link between the political demand and social policy outcome while taking into account the design of the party system. The political demand is measured by individual preferences and the design of the party system is defined as the extent of party fractionalization. This is, to our knowledge, the first attempt in the literature to empirically link the political demand and the policy outcome with the help of a direct measure of preferences. Moreover, we account for an additional channel, so far neglected in the literature: The composition effect of the demand. Indeed, the heterogeneity of the demand within countries, more than the level of the demand itself, is shown to have a positive impact on welfare state generosity. This impact increases with the degree of fractionalization of the party system. We run regressions on a sample of 18 OECD countries over 23 years, carefully dealing with the issues raised by the use of time-series cross-section data.
    Date: 2008
  9. By: Celik, Gorkem; Peters, Michael
    Abstract: We study a design setup, where players can take part in a mechanism to coordinate their actions in a default game. By refusing to participate in the mechanism, a player can revert to playing the default game non-cooperatively. We illustrate with an example that there are allocation rules that can only be supported by equilibria in which some types of some players are not participating in the mechanism.
    Keywords: Mechanism design; Default game; Cartel agreements
    Date: 2008–08–06

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