New Economics Papers
on Collective Decision-Making
Issue of 2009‒08‒22
nine papers chosen by

  1. Does deceptive advertising reduce political participation? Theory and evidence By Daniel Houser; Sandra Ludwig; Thomas Stratmann
  2. Democracy and voting survey: first results from Ethiopia By Marie-Anne Valfort
  3. Political Participation / National Election Study By Rüdiger Schmitt-Beck
  4. Das Governance-Dilemma der demokratischen Wirtschaftspolitik By Kruse, Joern
  5. Internal and external political competition By David Hugh-Jones
  6. Caste and Punishment: The Legacy of Caste Culture in Norm Enforcement By Hoff, Karla; Kshetramade, Mayuresh; Fehr, Ernst
  7. Beyond Procedural Equity and Reciprocity By Nadine Chlaß; Werner Güth; Topi Miettinen
  9. Bargaining and social structure By Edoardo Gallo

  1. By: Daniel Houser (George Mason University); Sandra Ludwig (LMU Munich); Thomas Stratmann (George Mason University)
    Abstract: We examine the effect of deceptive advertising on voting decisions in elections. We model two-candidate elections in which 1) voters are uncertain about candidates' attributes; and 2) candidates can inform voters of their attributes by sending advertisements. We compare political campaigns with truthful advertising to campaigns in which there is a small chance of deceptive advertising. Our theoretical model predicts that informed voters should act on the information contained in the advertisement. Thus, even in deceptive campaigns, informed voters should either vote for the candidate from whom they received an advertisement or abstain from voting; they should never vote for the opposing candidate. We test our model in laboratory elections, and, as predicted, find higher participation among informed voters in elections that allow only for truthful advertisement than in elections that permit deceptive advertising. Contrary to our theoretical predictions, we find substantial differences in voting behavior between truthful and deceptive campaigns. When faced with a small probability of deception, informed voters in deceptive campaigns vote for the candidate who did not send an advertisement, thereby making sub-optimal voting choices. Even when there is only a small chance that an advertisement is deceptive, voters are more likely to elect the candidate who generates less welfare.
    Date: 2009–08
  2. By: Marie-Anne Valfort (LEEP - Laboratoire d'econometrie de l'école polytechnique - CNRS : UMR7657 - Polytechnique - X)
    Abstract: This working paper contains the first results of a questionnaire that was conducted in May 2004 (May, 8-9) among 331 students of the Addis Ababa University to know their opinion about democracy and the political preferences they express through voting. The paper takes the form of the questionnaire itself in which we included, for each question, the corresponding first statistical results that we get. We create a synthetic table of content as well as an index at the end of the document to facilitate for the reader an easy access to the information he may be looking for.
    Keywords: Africa, Altruism, Equity, Ethiopia, Institution design, Public goods, Voting behaviour
    Date: 2009–04–15
  3. By: Rüdiger Schmitt-Beck
    Abstract: The chapter gives an overview of recent developments within participation and electoral research, and discusses the current state of affairs with regard to data provision and access. It concludes with several recommendations: (a) to tag a small number of key political variables as constant elements of the future question programmes of both the ALLBUS and the GSOEP, thereby creating substantial amounts of synergy at little marginal cost; (b) to establish a National Election Study in Germany by providing the current GLES project (which is funded by the DFG to study the 2009, 2013 and 2017 national elections) with a constant logistic and methodological support infrastructure by GESIS, and on the long run by providing a regular follow-up study to this project with a stable basis of reliable public funding and a firm institutional embedding, preferably by including it into the remit of GESIS; (c) to adapt the data services of the statistical offices in several respects more closely to the data requirements of participation and electoral research; (d) to establish a formal obligation for public agencies to submit survey data collected under their auspices in due time to the public domain for purposes of secondary analysis.
    Keywords: Political participation, political behaviour, elections, electoral behaviour, voting
    Date: 2009
  4. By: Kruse, Joern (Helmut Schmidt University, Hamburg)
    Abstract: As a result of the prevailing governance structure, economic policy in democracies usually suffers from specific deficiencies. Among these are the predominance of distributive over efficiency objectives, the neglect of long-run effects, and the lack of or biased use of expert knowledge in the political decision making process. These deficiencies can be attributed to a 'monopoly of democratic legitimacy' of the politicians and parties, an overloaded democratic delegation, the influence of interest groups, and the short-run incentives in the political process. The focus of this paper is on the reform of the governance structure of economic policy. It is suggested that a 'dual democratic legitimacy' should be introduced. A 'senate' which is independent of the political parties will be directly elected by the people. The senate firstly works as a second chamber in bicameralistic legislation, closely cooperating with consultative expert institutions. Secondly, the senate acts as a principal for any public institution outside of the parliament and the government, appointing the top personnel.
    Keywords: Delegation; Politische Institutionen; Zwei-Kammer-Systeme; Senat
    JEL: D02 D72
    Date: 2009–08–10
  5. By: David Hugh-Jones
    Abstract: All rulers face political competition, both from rivals within their state, and from other states to which their subjects may exit. In a simple model, both kinds of competition are substitutes. Internal competition (democracy) bene?ts citizens by allowing them to replace rent-seeking rulers. But it also weakens these rulers' incentives to invest. External competition forces rent-seeking rulers to invest so as to prevent migration. As a result, citizens are less willing to ?ght for democracy, and rulers are less eager to oppose it, when external competition is high. In a panel of countries, there are fewer changes towards democracy when states have low GDP relative to their neighbours.
    Keywords: political competition, dictatorship, democracy, transitions
    JEL: D72 H77
    Date: 2009–08–10
  6. By: Hoff, Karla (World Bank); Kshetramade, Mayuresh (affiliation not available); Fehr, Ernst (University of Zurich)
    Abstract: Well-functioning groups enforce social norms that restrain opportunism, but the social structure of a society may encourage or inhibit norm enforcement. Here we study how the exogenous assignment to different positions in an extreme social hierarchy – the caste system – affects individuals' willingness to punish violations of a cooperation norm. Although we control for individual wealth, education, and political participation, low caste individuals exhibit a much lower willingness to punish norm violations that hurt members of their own caste, suggesting a cultural difference across caste status in the concern for members of one's own community. The lower willingness to punish may inhibit the low caste's ability to sustain collective action and so may contribute to its economic vulnerability.
    Keywords: social norms, informal sanctions, third party punishment, endogenous social preferences, social exclusion, collective action, caste
    JEL: D02 D64
    Date: 2009–08
  7. By: Nadine Chlaß (Friedrich Schiller University Jena, Germany); Werner Güth (Max Planck Institute of Economics, Jena, Germany); Topi Miettinen (SITE Stockholm School of Economics, Sweden.)
    Abstract: Most research in economics models agents somehow motivated by outcomes. Here, we model agents motivated by procedures instead, where procedures are defined independently of an outcome. To that end, we design procedures which yield the same expected outcomes or carry the same information on other's intentions while they have different outcome-invariant properties. Agents are experimentally confirmed to exhibit preferences over these which link to psychological attributes of their moral judgment.
    Keywords: procedural preferences, experiment, procedural fairness
    JEL: C78 D63 Z13
    Date: 2009–08–12
  8. By: Juliette Rouchier (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales - CNRS : UMR6579); Paola Tubaro (CMH - Centre Maurice Halbwachs - CNRS : UMR8097 - Université de Caen - Ecole Normale Supérieure de Paris - ENS Paris - Ecole des Hautes Etudes en Sciences Sociales)
    Abstract: The co-evolution of social networks and opinion formation has received increasing attention in recent years. As a contribution to the growing literature on this topic, we explore connections between empirical data representing the advice network of judges at the Commercial Court in Paris and an agent-based simulation protocol testing various hypotheses on the motives that drive agent behaviors. A previous work (Rouchier et al. 2007) had already modeled the dynamics of advice-seeking among judges and studied the implications of different rationality assumptions on the shape of the emerging network. Here, we add an influence model to the previously examined advice-seeking relationships in order to explore the possibility that there is a form of “culture” at the Court that harmonizes the opinions of members over time; we identify a set of relevant stylized facts, and we use new indicators to evaluate how agents choose with whom to interact within this framework. The basic assumptions we analyze are that they seek advice from senior judges who are higher up in the hierarchy, who enjoy high reputation, or who are similar to them. Our simulations test which criterion –or which combination of criteria– is most credible, by comparing both the properties of the emerging network and the dynamics of opinion at the Court to the stylized facts. Our results single out the combination of criteria that most likely guide individuals' selection of advisors and provide insight into their effects on opinion formation.
    Keywords: Advice network ; Agent-Based Simulation ; Influence Model ; Opinion Dynamics ; Hierarchy ; Reputation
    Date: 2009–08–07
  9. By: Edoardo Gallo
    Abstract: This paper presents a bargaining model between individuals belonging to different groups where the equilibrium outcome depends on the communication network within each group. Belonging to a group gives an informational advantage: connections help to gather information about past transactions and this information can be used to make more accurate demands in future bargaining rounds. In the long-term there is a unique stochastically stable equilibruim which depends on the peripheral or least connected individuals in each group. Comparative statistics shows that a denser and more homogeneous network allows members of a group to obtain a better deal. An empirical analysis of the observed price differential between Asian and white buyers in New York’s Fulton fish market is consistent with these predictions. An extension explores an alternative set-up where buyers and sellers belong to the same communication network: if the network is regular and the agents are homogeneous then the equilibrium division in 50-50.
    Keywords: Network, Noncooperative bargaining, Core-periphery networks, Fulton fish market, 50-50 division.
    JEL: C73 C78 D83
    Date: 2009

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