New Economics Papers
on Collective Decision-Making
Issue of 2009‒08‒16
ten papers chosen by

  1. Lobbying of Firms by Voters By Matthias Dahm; Robert Dur; Amihai Glazer
  2. What is the probability your vote will make a difference? By Andrew Gelman; Nate Silver; Aaron Edlin
  3. Political Selection and Persistence of Bad Governments By Daron Acemoglu; Georgy Egorov; Konstantin Sonin
  4. Partisan Representation in Congress and the Geographic Distribution of Federal Funds By David Albouy
  5. European Governance, or Governmentality? Reflections on the EU‘s System of Government By Chris Shore
  6. Axiomatizations of Two Types of Shapley Values for Games on Union Closed Systems By René van den Brink; Ilya Katsev; Gerard van der Laan
  7. Efficiency and Collusion Neutrality of Solutions for Cooperative TU-Games By René van den Brink
  8. Stata for microtargeting using C++ and ODBC By Masahiko Aida
  9. Do re-election probabilities influence public investment? By Jon H. Fiva; Gisle James Natvik
  10. The endogenous nature of social preferences By Smith, John

  1. By: Matthias Dahm (Universitat Rovira i Virgili); Robert Dur (Erasmus University Rotterdam, CESifo, IZA); Amihai Glazer (University of California, Irvine)
    Abstract: A firm may induce voters or elected politicians to support a policy it favors by suggesting that it is more likely to invest in a district whose voters or representatives support the policy. In equilibrium, no one vote may be decisive, and the policy may gain strong support though the majority of districts suffer from adoption of the program. When votes reveal information about the district, the firm's implicit promise or threat can be credible.
    Keywords: Lobbying; voting; special interests; influence
    JEL: C72 D72 D78
    Date: 2009–07–31
  2. By: Andrew Gelman; Nate Silver; Aaron Edlin
    Abstract: One of the motivations for voting is that one vote can make a difference. In a presidential election, the probability that your vote is decisive is equal to the probability that your state is necessary for an electoral college win, times the probability the vote in your state is tied in that event. We computed these probabilities a week before the 2008 presidential election, using state-by-state election forecasts based on the latest polls. The states where a single vote was most likely to matter are New Mexico, Virginia, New Hampshire, and Colorado, where your vote had an approximate 1 in 10 million chance of determining the national election outcome. On average, a voter in America had a 1 in 60 million chance of being decisive in the presidential election.
    JEL: H0 K0
    Date: 2009–08
  3. By: Daron Acemoglu; Georgy Egorov; Konstantin Sonin
    Abstract: We study dynamic selection of governments under different political institutions, with a special focus on institutional “flexibilityâ€. A government consists of a subset of the individuals in the society. The competence level of the government in office determines collective utilities (e.g., by determining the amount and quality of public goods), and each individual derives additional utility from being part of the government (e.g., corruption or rents from holding office). We characterize dynamic evolution of governments and determine the structure of stable governments, which arise and persist in equilibrium. Perfect democracy, where current members of the government do not have an incumbency advantage or special powers, always leads to the emergence of the most competent government. However, any deviation from perfect democracy destroys this result. There is always at least one other, less competent government that is also stable and can persist forever, and even the least competent government can persist forever in office. Moreover, a greater degree of democracy may lead to worse governments. In contrast, in the presence of stochastic shocks or changes in the environment, greater democracy corresponds to greater flexibility and increases the probability that high competence governments will come to power. This result suggests that a particular advantage of democratic regimes may be their greater adaptability to changes rather than their performance under given conditions. Finally, we show that, in the presence of stochastic shocks, “royalty-like†dictatorships may be more successful than “junta-like†dictatorships, because they might also be more adaptable to change.
    JEL: C71 D71 D74
    Date: 2009–08
  4. By: David Albouy
    Abstract: In a two-party legislature, districts represented by the majority party may receive greater spending if legislators in the majority have greater proposal power or disproportionately form coalitions with each other. The type of spending received may depend on the party-identity of its legislators if parties differ in ideology. Estimates from the United States -- using fixed-effect and regression-discontinuity designs -- indicate that states represented by members of Congress in the majority receive greater federal grants, especially in transportation. States represented by Republicans receive more defense spending than those represented by Democrats; the latter receive more spending for education and urban development.
    JEL: H5 H77
    Date: 2009–08
  5. By: Chris Shore
    Abstract: This paper offers a critical exploration of the term ‘governance’, its rise to prominence within EU political discourse, and the new forms of authority and expertise it has come to be associated with within the EU’s evolving political regime. Its argues that a critical understanding of EU governance might be advanced if scholars look beyond the conventional political science literature (where governance is often ontologized as that form of politics and authority which reflects the social reality of administering complex societies), and interpret it instead in terms of recent debates about neoliberal governmentality. I ask, what does the Commission’s appropriation of this ambiguous concept reveal about the way EU politicians, experts and policy makers are re-conceptualising Europe and the problem of European government?
    Date: 2009–09–01
  6. By: René van den Brink (VU University Amsterdam); Ilya Katsev (Russian Academy of Sciences); Gerard van der Laan (VU University Amsterdam)
    Abstract: A situation in which a finite set of players can obtain certain payoffs by cooperation can be described by a cooperative game with transferable utility, or simply a TU-game. A (single-valued) solution for TU-games assigns a payoff distribution to every TU-game. A well-known solution is the Shapley value. In the literature various models of games with restricted cooperation can be found. So, instead of allowing all subsets of the player set N to form, it is assumed that the set of feasible coalitions is a subset of the power set of N. In this paper we consider such sets of feasible coalitions that are closed under union, i.e. for any two feasible coalitions also their union is feasible. We consider and axiomatize two solutions or rules for these games that generalize the Shapley value: one is obtained as the conjunctive permission value using a corresponding superior graph, the other is defined as the Shapley value of a modified game similar as the Myerson rule for conference structures.
    Keywords: TU-game; restricted cooperation; union closed system; Shapley value; permission value; superior graph; axiomatization
    JEL: C71
    Date: 2009–07–17
  7. By: René van den Brink (VU University Amsterdam)
    Abstract: Three well-known solutions for cooperative TU-games are the Shapley value, the Banzhaf value and the equal division solution. In the literature various axiomatizations of these solutions can be found. Axiomatizations of the Shapley value often use efficiency which is not satisfied by the Banzhaf value. On the other hand, the Banzhaf value satisfies collusion neutrality which is not satisfied by the Shapley value. Both properties seem desirable. However, neither the Shapley value nor the Banzhaf value satisfy both. The equal division solution does satisfy both axioms and, moreover, together with symmetry these axioms characterize the equal division solution. Further, we show that there is no solution that satisfies efficiency, collusion neutrality and the null player property. Finally, we show that a solution satisfies efficiency, collusion neutrality and linearity if and only if there exist exogenous weights for the players such that in any game the worth of the 'grand coalition' is distributed proportional to these weights.
    Keywords: Efficiency; Collusion neutrality; Shapley value; Banzhaf value; Equal division solution; Impossibility
    JEL: C71
    Date: 2009–07–22
  8. By: Masahiko Aida (Greenberg Quinlan Rosner)
    Abstract: In U.S. political campaigns, the use of propensity scores of voters, predicted attributes, such as partisanship or turnout likelihood, became quite popular in recent years. Such applications, often called microtargeting, range from survey sampling to voter contacts via direct mail, phone, or canvassing. To create such models, analysts first recode the original dataset into statistical software and then create statistical models by using data mining tools. When the mining models are validated against validation data, then analysts need to append propensity scores with a database of millions of voters (such databases typically contain information from voter files, census data, and consumer data). While database software offers a strong capacity to store and manipulate a large volume of data, carrying out basic data transformation such as recoding or creating an index by PCA is not easy using database software. I will demonstrate an example of using Stata as a front-end tool to connect to database software, calculate propensity scores using a C++ plug-in, and return the propensity scores back to the database. This approach combines the strengths of three different platforms: the flexibility of Stata as a general statistical package, the speed of C++ to conduct complex calculations, and the capacity of database software to manipulate gigabytes of data with relative ease.
    Date: 2009–08–11
  9. By: Jon H. Fiva (University of Oslo); Gisle James Natvik (Norges Bank (Central Bank of Norway))
    Abstract: We identify exogenous variation in incumbent policymakers' re-election probabilities and explore empirically how this variation affects the incumbents' investment in physical capital. Our results indicate that a higher re-election probability leads to higher investments, particularly in the purposes preferred more strongly by the incumbents. This aligns with a theoretical framework where political parties disagree about which public goods to produce using labor and predetermined public capital. Key for the consistency between data and theory is to account for complementarity between physical capital and flow variables in government production.
    Keywords: Political economics, Strategic capital accumulation, Identifying popularity shocks
    JEL: E62 H40 H72
    Date: 2009–08–11
  10. By: Smith, John
    Abstract: This paper presents evidence which challenges the view that techniques which are designed to measure the social preferences of subjects can always be accomplished in a nonintrusive manner. We find evidence that such measurements can influence the preferences which they are designed to measure. Researchers often measure social preferences by posing a series of dictator game allocation decisions; we use a particular technique, Social Value Orientation (SVO). In our experiment we vary the order of the SVO measurement and a lager stakes dictator game. We find that subjects with prosocial preferences act even more prosocially when the SVO measurement is administered first, whereas those with selfish preferences are unaffected by the order of the measurement. Additionally, we find evidence that this difference is driven by the presence of choices involving the size of surplus.
    Keywords: Other-Regarding Preferences; Social Value Orientation; Dictator Game
    JEL: D64 C91
    Date: 2009–08–04

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