New Economics Papers
on Collective Decision-Making
Issue of 2009‒01‒17
twelve papers chosen by

  1. A psychologically-based model of voter turnout By Ming Li; Dipjyoti Majumdar
  2. Is the Median Voter Decisive? Evidence of 'Ends Against the Middle' From Referenda Voting Patterns By Eric J. Brunner; Stephen L. Ross
  3. Electoral systems and the distortion of voters' preferences By Piolatto, Amedeo
  4. Selfish and Prospective. Theory and Evidence of Pocketbook Voting By Mikael Elinder; Henrik Jordahl; Panu Poutvaara
  5. The Impact of Council's Internal Decision-Making Rules on the Future EU By Mika Widgrén
  6. Do Benevolent Aspects Have Room in Explaining EU Budget Receipts? By Heikki Kauppi; Mika Widgrén
  7. Perspectives on Preference Aggregation By Regenwetter, Michel
  8. Priorities in the Location of Multiple Public Facilities By Olivier Bochet; Sidartha Gordon
  9. Politician Preferences,Law-Abiding Lobbyists and Caps on Political Lobbying By Ivan Pastine; Tuvana Pastine
  10. Maximal Domains for Strategy-proof or Maskin Monotonic Choice Rules By Olivier Bochet; Ton Storcken
  11. A conflict-free arbitration scheme in a large population By Hannu Vartiainen
  12. Global Democracy: In the Beginning By Robert E. Goodin

  1. By: Ming Li (Concordia University); Dipjyoti Majumdar (Concordia University)
    Abstract: We analyze a psychologically-based model of voter turnout. Potential voters experience regret if they fail to vote, which is the motivation for participation in voting. Regret from abstention is inversely related to the margin of victory. Voters on the winner's side experience less regret than those on the loser's side. We show that the unique equilibrium involves positive voter turnout. We show that the losing side has higher turnout. In addition, voter turnout is positively related to importance of the election and the competitiveness of the election. We also consider scenarios in which voters are uncertain about the composition of the electorate's political preferences and show similar phenomena emerge.
    Keywords: voter turnout, regret, economics and psychology
    JEL: D72
    Date: 2006–08
  2. By: Eric J. Brunner (Quinnipiac University); Stephen L. Ross (University of Connecticut)
    Abstract: This paper examines whether the voter with the median income is decisive in local spending decisions. Previous tests have relied on cross-sectional data while we make use of a pair of California referenda to estimate a first difference specification. The referenda proposed to lower the required vote share for passing local educational bonding initiatives from 67 to 50 percent and 67 to 55 percent, respectively. We find that voters rationally consider future public service decisions when deciding how to vote on voting rules, but the empirical evidence strongly suggests that an income percentile below the median is decisive for majority voting rules. This finding is consistent with high income voters with weak demand for public educational services voting with the poor against increases in public spending on education.
    Keywords: Median Voter Hypothesis, Voting, Referenda, Education Spending
    JEL: H4 H7 I2
    Date: 2009–01
  3. By: Piolatto, Amedeo
    Abstract: In this paper I show that in a parliamentary democracy, contrary to common wisdom, under a proportional electoral rule governments do not necessarily represent voters' preferences better than under plurality rule. While voters affect the composition of Parliament, decisions are taken by a subset of Parliamentarians: a coalition of them decides directly and through the government. As a consequence, two distortions might occur: one at the electoral stage when Parliament is formed and the other at the coalition formation stage, when government is chosen. Through a model à la Rubinstein, I show that small parties' bargaining power increases when parties are patient; for sufficiently patient parties, the small (but pivotal) ones obtain a large bargaining power. The distortion introduced by plurality rule goes in the opposite direction; this can be beneficial (in term of voters' representativeness) as long as the impact of the two distortions is similar. I show that under non restrictive conditions, plurality rule can outperform the proportional rule in terms of representativeness of voters' preferences.
    Keywords: Electoral systems; Proportional rule; Plurality rule; Voters' representation
    JEL: H1 C71 D72 P16
    Date: 2008–09–04
  4. By: Mikael Elinder; Henrik Jordahl; Panu Poutvaara (Department of Economics, University of Helsinki)
    Abstract: We present and test a theory of prospective and retrospective pocketbook voting. Focusing on two large reforms in Sweden, we establish a causal chain from policies to sizeable individual gains and losses and then to voting. The Social Democrats proposed budget cuts affecting parents with young children before the 1994 election, but made generous promises to the same group before the 1998 election. Since parents with older children were largely unaffected we use a difference-in-differences strategy for identification. We find clear evidence of prospective pocketbook voting. Voters respond to campaign promises but not to the later implementation of the reforms.
    Keywords: elections, economic voting, pocketbook voting, selfinterest, prospective voting, retrospective voting, child care
    JEL: C21 D72 H50
    Date: 2008–10
  5. By: Mika Widgrén (Department of Economics, Turku School of Economics)
    Abstract: This paper deals with the voting rules in the EU Council. Both internal and external impact of the voting rules are evaluated. Internal impact affects the distribution of power among the member states and external impact affects power relations between the main decision-making bodies in the EU. One of the main lessons of the analysis is clearly to explain why the design of Council voting rules has required so much bargaining and cumbersome marathon negotiations.
    Keywords: European integration, Council of Ministers, power
    JEL: C70 D71 H77
    Date: 2008–01
  6. By: Heikki Kauppi (Department of Economics, University of Turku); Mika Widgrén (Department of Economics, Turku School of Economics)
    Abstract: The member states have self-interested objectives and they use their voting power in the Council of Ministers (CM) to maximize their shares from the EU budget, whereas European Parliament (EP) uses its power to support benevolent objectives and equality between member states. Given the current decision procedures of the EU, EP has effective power on non-compulsory expenditure covering structural spending, but not on compulsory expenditure consisting mainly of agricultural spending. We use this fact to assess how the assumed benevolent objectives of EP turn into member states' budget receipts in a power politics based model.
    Keywords: European integration, EU budget, voting power
    JEL: C71 D70 D72
    Date: 2008–09
  7. By: Regenwetter, Michel (University of Illinois at Urbana-Champaign)
    Abstract: For centuries, the mathematical aggregation of preferences by groups, organizations or society has received keen interdisciplinary attention. Extensive 20th century theoretical work in Economics and Political Science highlighted that competing notions of “rational social choice” intrinsically contradict each other. This led some researchers to consider coherent “democratic decision making” a mathematical impossibility. Recent empirical work in Psychology qualifies that view. This nontechnical review sketches a quantitative research paradigm for the behavioral investigation of mathematical social choice rules on real ballot, experimental choice, or attitudinal survey data. The paper poses a series of open questions. Some classical work sometimes makes assumptions about voter preferences that are descriptively invalid. Do such technical assumptions lead the theory astray? How can empirical work inform the formulation of meaningful theoretical primitives? Classical “impossibility results” leverage the fact that certain desirable mathematical properties logically cannot hold universally in all conceivable electorates. Do these properties nonetheless hold in empirical distributions of preferences? Will future behavioral analyses continue to contradict the expectations of established theory? Under what conditions and why do competing consensus methods yield identical outcomes?
    Date: 2008–12–15
  8. By: Olivier Bochet; Sidartha Gordon
    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 suffer 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: Multiple public facilities; Priority rules; Hierarchical rules; Object-population monotonicity; Sovereignty; Anonymity; Strategy-proofness; Generalized median rules; Hiding-proofness
    JEL: D60 D63 D70 D71 H41
    Date: 2008–02
  9. By: Ivan Pastine (Economics,UCD, Dublin 4.); Tuvana Pastine (Economics Finance and Accounting, National University of Ireland, Maynooth)
    Abstract: The effect of a contribution cap is analyzed in a political lobbying game where the politician has a preference for the policy position of one of the lobbyists. In contrast to the previous literature where the politician has no preference over policy alternatives, we find that a more restrictive binding cap always reduces expected aggregate contributions. However, the politician might support a barely binding cap over no cap on contributions. The cap always favors the lobbyist whose policy position is preferred irrespective of the identity of the high-valuation lobbyist. The introduction of politician policy preferences permits an analysis of welfare tradeoffs of contribution caps. Even a barely binding cap can have significant welfare consequences.
    Keywords: All-pay auction, campaign finance reform, explicit ceiling.
    JEL: D72 C72
    Date: 2008
  10. By: Olivier Bochet; Ton Storcken
    Abstract: Domains of individual preferences for which the well-known impossibility Theorems of Gibbard-Satterthwaite and Muller-Satterthwaite do not hold are studied. First, we introduce necessary and sufficient conditions for a domain to admit non-dictatorial, Pareto efficient and either strategy-proof or Maskin monotonic social choice rules. Next, to comprehend the limitations the two Theorems imply for social choice rules, we search for the largest domains that are possible. Put differently, we look for the minimal restrictions that have to be imposed on the unrestricted domain to recover possibility results. It turns out that, for such domains, the conditions of inseparable pair and of inseparable set yield the only maximal domains on which there exist non-dictatorial, Pareto efficient and strategy-proof social choice rules. Next, we characterize the maximal domains which allow for Maskin monotonic, non-dictatorial and Pareto-optimal social choice rules.
    Keywords: Strategy-proofness; Maskin monotonicity; Restricted domains; Maximal domains
    JEL: C72 D63 D61 C78 D71
    Date: 2008–08
  11. By: Hannu Vartiainen (Department of Economics, Turku School of Economics)
    Abstract: This paper studies allocations that can be implemented by an arbitrator subject to the constraint that the agents' outside option is to start bargaining by themselves. As the population becomes large, the set of implementable allocations shrinks to a singleton point - the conflict-free allocation. Finally, the conflict-free allocation can be implemented via a simple "lobbying" game where parties composed of agents with similar preferences bid for the right to be the first proposer in a bargaining game among the parties, i.e. in the "political game".
    Keywords: non-cooperative bargaining, arbitration, implementation
    JEL: C72 C78
    Date: 2008–06
  12. By: Robert E. Goodin (Philosophy Program, Research School of Social Sciences, Australian National University)
    Abstract: Talk about global democracy seems to be fixated on a Reform-Act model of democracy, with 'one person one vote for all affected by the decisions' as for example in a second popularly-apportioned chamber of UN. Politically, that seems wildly unrealistic. But remember that the Reform Acts came very late in process of democratization domestically. The first steps in the beginning that eventually led to full democratization of that sort were: a) limiting the arbitrary rule on the part of the sovereign; and (b) making the sovereign accountable to others (initially a limited set of others, which then expanded). Globally, there are moves afoot globally in both those directions. And once those pieces are in place, there are good reasons for expecting the circle of accountability basically only to expand and virtually never to contract.
    Keywords: global democracy, accountability, rule of law
    JEL: F53 H11 K33 N40
    Date: 2008–05

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