New Economics Papers
on Collective Decision-Making
Issue of 2009‒04‒25
eight papers chosen by

  1. Media and Political Persuasion: Evidence from Russia By Enikolopov, Ruben; Petrova, Maria; Zhuravskaya, Ekaterina
  2. The uniform distributions puzzle By Luc LAUWERS
  3. Motivating Politicians: The Impacts of Monetary Incentives on Quality and Performance By Claudio Ferraz
  4. Gender Interactions Within Hierarchies: Evidence from the Political Arena By Gagliarducci, Stefano; Paserman, M. Daniele
  5. Contractually stable networks By Jean-Franois, CAULIER; Ana, MAULEON; Vincent, VANNETELBOSCH
  6. The Price of Political Opposition: Evidence from Venezuela's Maisanta By Chang-Tai Hsieh; Edward Miguel; Daniel Ortega; Francisco Rodriguez
  7. The Case for Mandatory Ownership Disclosure By Schouten, Michael C.
  8. The 'Wisdom of the Crowds' and Public Policy By Maria Demertzis

  1. By: Enikolopov, Ruben; Petrova, Maria; Zhuravskaya, Ekaterina
    Abstract: How do media affect voting behavior? What difference can an independent media outlet make in a country with state-controlled media? Our paper addresses these questions by comparing electoral outcomes and votes reported by survey respondents during the 1999 parliamentary elections in Russia for those geographical areas that had access and those that had no access to the only national TV channel independent from the government ("NTV"). The effect is identified from exogenous variation in the availability of the signal, which appears to be mostly idiosyncratic, conditional on controls. The findings are as follows. 1) The presence of the independent TV channel decreased the aggregate vote for the government party by 2.5 percentage points and increased the combined vote for major opposition parties by 2.1 percentage points. 2) The probability of voting for opposition parties increased for individuals who watched NTV even controlling for voting intentions measured one month prior to the elections. 3) NTV had a smaller effect on votes of people with higher political knowledge and those using alternative sources of political news and a larger effect on retired persons who watch TV substantially more than working individuals.
    Keywords: Media; NTV; Political Persuasion; Russia
    JEL: D0 H0 J0
    Date: 2009–04
  2. By: Luc LAUWERS
    Abstract: The existence of a Paretian and finitely anonymous ordering in the set of infinite utility streams implies the existence of a non-Ramsey set (a nonconstructive object whose existence requires the axiom of choice). Therefore, each Paretian and finitely anonymous quasi-ordering either is incomplete or does not have an explicit description. Hence, the possibility results of Svensson (1980) and of Bossert, Sprumont, and Suzumura (2006) do require the axiom of choice.
    Keywords: Intergenerational justice; Pareto; Multi-period social choice; Axiom of choice; Constructivism.
    JEL: D60 D70 D90
    Date: 2009–03
  3. By: Claudio Ferraz
    Abstract: It is examined whether higher wages attract better quality politicians and improve political performance using exogenous variation in the salaries of local legislators across Brazil’s municipal governments. The analysis exploits discontinuities in wages across municipalities induced by a constitutional amendment defining caps on the salary of local legislatures according to municipal population.
    Keywords: Brazil, municipal, population, salary, politicians, wages, political performance, constitutional amendment
    Date: 2009
  4. By: Gagliarducci, Stefano; Paserman, M. Daniele
    Abstract: This paper studies gender interactions within hierarchical organizations using a large data set on the duration of Italian municipal governments elected between 1993 and 2003. A municipal government can be viewed as a hierarchy, whose stability over time depends on the degree of cooperation between and within ranks. We find that in municipalities headed by female mayors, the probability of early termination of the legislature is higher. This result persists and becomes stronger when we control for municipality fixed effects as well as non-random sorting of women into municipalities using regression discontinuity in gender-mixed electoral races decided by a narrow margin. The likelihood that a female mayor survives until the end of her term is lowest when the council is entirely male, and in regions with less favorable attitudes towards working women. The evidence is suggestive that female mayors are less able at fostering cooperation among men, or alternatively, that men are more reluctant to be headed by women. Other interpretations receive less support in the data. Our results may provide an alternative explanation for the underrepresentation of women in leadership positions.
    Keywords: Discrimination; Gender; Government stability; Hierarchies
    JEL: H72 M54
    Date: 2009–04
  5. By: Jean-Franois, CAULIER; Ana, MAULEON; Vincent, VANNETELBOSCH (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics)
    Abstract: We develop a theoretical framework that allows us to study which bilateral links and coalition structures are going to emerge at equilibrium. We define the notion of coalitional network to represent a network and a coalition structure, whre the network specifies the natyure of the relationship each individual has with his coalition members and with individuals outside his coalition. To predict the coalitional networks that are going to emerge at equiibrium we propose the concept of contractual stability which requires that any change made to the coalitional network needs the consent of both the deviating players and their original coalition partners. We show that there always exists a contractually stable coalitional network under the simple majority decision rule and the component-wise egalitarian or majoritarian allocation rules. Moreover, requiring the consent of group members may help to reconcile stability and efficiency
    Keywords: Networks; coaliation structures; contractual stability; allocation rules
    JEL: A14 C70
    Date: 2008–11–02
  6. By: Chang-Tai Hsieh; Edward Miguel; Daniel Ortega; Francisco Rodriguez
    Abstract: In 2004, the Chávez regime in Venezuela distributed the list of several million voters whom had attempted to remove him from office throughout the government bureaucracy, allegedly to identify and punish these voters. We match the list of petition signers distributed by the government to household survey respondents to measure the economic effects of being identified as a Chavez political opponent. We find that voters who were identified as Chavez opponents experienced a 5 percent drop in earnings and a 1.5 percentage point drop in employment rates after the voter list was released. A back-of-the-envelope calculation suggests that the loss aggregate TFP from the misallocation of workers across jobs was substantial, on the order of 3 percent of GDP.
    JEL: N16 O0
    Date: 2009–04
  7. By: Schouten, Michael C.
    Abstract: The use of equity derivatives to conceal economic ownership of shares (“hidden ownership”) is increasingly drawing attention from the financial community, as is the exercise of voting power without corresponding economic interest (“empty voting”). Market participants and commentators have called for expansion of ownership disclosure rules, and policymakers on both sides of the Atlantic are now contemplating how to respond. Yet, in order to design appropriate responses it is key to understand why we have ownership disclosure rules in the first place. This understanding currently appears to be lacking, which may explain why we observe divergent approaches between countries. The case for mandatory ownership disclosure has also received remarkably little attention in the literature, which has focused almost exclusively on mandatory issuer disclosure. Perhaps this is because most people assume that ownership disclosure is a good thing. But why is such information important, and to whom? This paper aims to answer these fundamental questions, using the European disclosure regime as an example. First, the paper identifies two main objectives of ownership disclosure: improving market efficiency and corporate governance. Next, the paper explores the various mechanisms through which ownership disclosure performs these tasks. This sets the stage for an analysis of hidden ownership and empty voting that demonstrates why these phenomena are so problematic.
    Keywords: ownership disclosure; market efficiency; corporate governance; monitoring; hidden ownership; empty voting; hedge fund activism
    JEL: K20 G38 K22 G34 G10 G30
    Date: 2009–03–08
  8. By: Maria Demertzis
    Abstract: Surowiecki (2004) argues that collective predictions are better than individual predictions and calls that the Wisdom of the Crowds. We use an analytical information model to demonstrate and explain this. Then we see how these two predictions are affected by better public information and show that while individual predictions always improve, collective ones do not. A social planner that relies on collective predictions to form policy may erroneously refrain from providing better information. We use two examples to show where this might be applicable.
    Keywords: Public information; social planner; expert vs. lay crowds
    JEL: D82 E52 E58
    Date: 2009–02

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