New Economics Papers
on Collective Decision-Making
Issue of 2009‒05‒23
nine papers chosen by

  1. Measuring voting power: The paradox of new members vs. the null player axiom By László Á. Kóczy
  2. Hold Your Nose and Vote: Why Do Some Democracies Tolerate Corruption? By Marco Pani
  3. Constitutional Design: Separation of Financing and Project Decision By Hans Gersbach; Volker Hahn; Stephan Imhof
  4. Propositionwise judgment aggregation By Dietrich Franz; List Christian
  5. On Political Representation: Myths and Challenges By Johannes Pollak, Jozef Bátora, Monika Mokre, Emmanuel Sigalas; Peter Slominski
  6. Power distribution in the electoral body with an application to the Russian Parliament By Fuad Aleskerov
  7. Three is a crowd - inefficient communication in the multi-player electronic mail game By Kris De Jaegher; Stephanie Rosenkranz
  8. Family Ties and Political Participation By Alesina, Alberto; Giuliano, Paola
  9. Budget-Balancing and Side-Contracting in Team Production By Jesse Bull

  1. By: László Á. Kóczy (Budapest Tech)
    Abstract: Qualified majority voting is used when decisions are made by voters of different sizes. In such situations the voters' influence on decision making is far from obvious; power measures are used for an indication of the decision making ability. Several power measures have been proposed and characterised by simple axioms to help the choice between them. Unfortunately the power measures also feature a number of so-called paradoxes of voting power. In this paper we show that the Paradox of New Members follows from the Null Player Axiom. As a corollary of this result it follows that there does not exist a power measure that satisfies the axiom, while not exhibiting the Paradox.
    Date: 2009
  2. By: Marco Pani
    Abstract: This paper analyses why corruption can persist for long periods in a democracy and inquires whether this can result from a well-informed rational choice of the citizens. By applying a citizen-candidate model of representative democracy, the paper analyzes how corruption distortsthe allocation of resources between public and private expenditure, altering the policy preferences of elected and nonelected citizens in opposite directions. The result is a reduction in real public expenditure and, if the median voter's demand for public goods is sufficiently elastic, a tax reduction. In this case, some citizens can indirectly benefit from corruption. The paper shows that, under this condition, if the citizens anticipate a shift in policy preferences in favor of higher public expenditure, they may support institutional arrangements that favor corruption (such as a weak enforcement of the law) in order to alter future policy decisions in their favor. This result complements the findings of other studies that have attributed the persistence of corruption in a democracyto some failure on the part of the voters or the electoral system. It also bears implications for developing effective anticorruption strategies and for redefining the role that can be played by the international community.
    Keywords: Corruption , Developed countries , Developing countries , Governance , Political economy , Government expenditures , Private sector , Legislation , Economic models ,
    Date: 2009–04–22
  3. By: Hans Gersbach (CER-ETH - Center of Economic Research at ETH Zurich, Switzerland); Volker Hahn (CER-ETH - Center of Economic Research at ETH Zurich, Switzerland); Stephan Imhof (CER-ETH - Center of Economic Research at ETH Zurich, Switzerland)
    Abstract: We examine the provision of public projects under separate tax and subsidy rules. We find that tax rules separated from project cum subsidy decisions exhibit several advantages when incentive problems of the agenda-setter are taken into account. In particular, tax rules may prevent the proposal of inefficient projects which benefit only a small lobby group. We propose “redistribution efficiency” as a socially desirable property of proposals and find that tax rules always guarantee redistribution efficiency. We show that rules on subsidies combined with discretion regarding taxes always yield socially inferior proposals. Finally, tax rules induce the agenda-setter to look for potential improvements of public projects.
    Keywords: constitutional design, provision of public projects, voting, taxes and subsidies
    JEL: D72 H40
    Date: 2009–05
  4. By: Dietrich Franz; List Christian (METEOR)
    Abstract: In the theory of judgment aggregation, it is known for which agendas of propositions it is possible to aggregate individual judgments into collective ones in accordance with the Arrow-inspired requirements of universal domain, collective rationality, unanimity preservation, non-dictatorship and propositionwise independence. But it is only partially known for which agendas it is possible to respect additional requirements, notably non-oligarchy, anonymity, no individual veto power, or implication preservation. We fully characterize the agendas for which there are such possibilities, thereby answering the most salient open questions about propositionwise judgment aggregation. Our results build on earlier results by Nehring and Puppe (2002), Nehring (2006) and Dietrich and List (2007a).
    Keywords: mathematical economics;
    Date: 2009
  5. By: Johannes Pollak, Jozef Bátora, Monika Mokre, Emmanuel Sigalas; Peter Slominski
    Abstract: In this paper we critically reassess the standard account of political representation, in order to question the mythical foundation of its premises and explain why it can no longer serve as an adequate explanatory framework in the modern political context. We argue that representation was not invented as a second-best solution, that the represented are not always a collective of individuals, that there is an indirect rather than direct link between the represented and the representatives, that representatives can be legitimately chosen by methods other than elections and, finally, that good representation cannot be reduced to responsiveness. Despite the inconsistencies of different theories of representation, the standard account survived long enough for reasons we explain in this paper. The consolidation of the EU as a supranational political arena and the burgeoning activity of transnational actors resulted in a multiplication of structures and opportunities for political representation which seriously challenges the effectiveness and suitability of the standard representation model. Growing complexity, diminishing transparency and the prospect of competing representative claims from concurrent majorities create a volatile dynamic for the future of democracy at both national and EU level.
    Keywords: accountability; democracy; democratization; legitimacy; multilevel governance; political representation; supranationalism
    Date: 2009–05–15
  6. By: Fuad Aleskerov
    Abstract: This paper presents several new approaches to evaluate power distribution in an electoral body. We define the index of consistency of two groups’ positions (briefly, the consistency index) which is used to separate possible coalitions in the Parliament. This allows to analyze power distribution within restricted coalition formations. Then we provide several new power indices for the case in which the intensity of factions to coalesce is taken into account. Our analysis of the power distribution model extends the one proposed by Shapley-Owen. A new consistency index is given allowing to construct such an extension. We illustrate these approaches via the analysis of power distribution among factions in the Russian Parliament (Duma) from 1993 to 2005.
    Date: 2008–06
  7. By: Kris De Jaegher; Stephanie Rosenkranz
    Abstract: In a two-player stag hunt with asymmetric information, players may lock each other into requiring a large number of confirmations and confirmations of confirmations from one another before eventually acting. This intuition has been formalized in the electronic mail game (EMG). The literature provides extensions on the EMG that eliminate inefficient equilibria, suggesting that no formal rules are needed to prevent players from playing inefficiently. The present paper investigates whether these results extend to the multi-player EMG. We show that standard equilibrium refinements cannot eliminate inefficient equilibria. While two players are predicted to play efficiently, many players need formal rules telling them when who talks to whom.
    Keywords: Multi-Player Electronic Mail Game, Collective Action, Communication Networks
    JEL: D82 D85 D71
    Date: 2009–04
  8. By: Alesina, Alberto (Harvard University); Giuliano, Paola (University of California, Los Angeles)
    Abstract: We establish an inverse relationship between family ties, generalized trust and political participation. The more individuals rely on the family as a provider of services, insurance, transfer of resources, the lower is civic engagement and political participation. The latter, together with trust, are part of what is known as social capital, therefore in this paper we contribute to the investigation of the origin and evolution of social capital over time. We establish these results using within country evidence and looking at the behavior of immigrants from various countries in 32 different destination places.
    Keywords: family ties, trust, culture
    JEL: Z10 Z13
    Date: 2009–04
  9. By: Jesse Bull (Department of Economics, Florida International University)
    Abstract: In a team production problem with non-verifiable effort, budget breaking is essential to inducing efficient levels of effort. This short paper considers the use of a third party, who does not exert effort, in a setting with general contracts that can include message games, as a way to remove resources from the team. We show that, given reasonable assumptions on side-contracting, the addition of the third party is not helpful. Additionally, we consider assumptions on side-contracting that others have used, and show that the third party may be of only limited use in those situations.
    JEL: C70 D74 K10
    Date: 2009–04

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