New Economics Papers
on Collective Decision-Making
Issue of 2009‒11‒27
eight papers chosen by

  1. Competing on Good Politicians By Galasso, Vincenzo; Nannicini, Tommaso
  2. Rational Choice and Voter Turnout: Evidence from Union Representation Elections By Henry S. Farber
  3. Pre-electoral Coalitions and Post-election Bargaining By Siddhartha Bandyopadhyay; Kalyan Chatterjee; Tomas Sjostrom
  4. Domestic Political Survival and International Conflict: Is Democracy Good for Peace? By Sandeep Baliga; David Lucca; Tomas Sjostrom
  5. Group Membership, Team Preferences, and Expectations By Francesco Guala; Luigi Mittone; Matteo Ploner
  6. Leadership in a Weak-Link Game By Joris Gillet; Edward Cartwright; Mark Van Vugt
  7. Welfare Maximizing Contest Success Functions when the Planner Cannot Commit By Corchon, Luis
  8. The Lifeboat Problem By Konrad, Kai A.; Kovenock, Dan

  1. By: Galasso, Vincenzo; Nannicini, Tommaso
    Abstract: Is electoral competition good for political selection? To address this issue, we introduce a theoretical model in which ideological parties select candidates between party loyalists and experts, and allocate them into the electoral districts. Non-ideological voters, who care about national and local policies, strongly prefer experts. We show that parties compete on good politicians by allocating them to the most contestable districts. Empirical evidence on Italian members of parliament confirms this prediction. We find that politicians with higher ex-ante quality - as measured by years of schooling, previous market income, and local government experience - are more likely to run in a contestable district. Indeed, despite being different on average, the characteristics of politicians belonging to opposite parties converge to high-quality levels in close races. Furthermore, politicians elected in contestable districts make fewer absences in parliament; this is shown to be driven more by a selection effect than by reelection incentives.
    Keywords: political competition; political selection; probabilistic voting
    JEL: D72 H00
    Date: 2009–07
  2. By: Henry S. Farber (Princeton University)
    Abstract: It is a common observation that many individuals vote despite the fact that, in elections with even a moderate number of voters, the probability their vote will be pivotal is quite small. The theoretical solution of positing that individuals receive utility from the act of voting itself explains why individuals vote, but it leaves open the question of whether or not there is a significant margin of individuals who consider the effect of their vote on the outcome in deciding whether or not to vote. I develop a rational choice model of voting in union representation elections (government supervised secret ballot elections, generally held at the workplace, on the question of whether the workers would like to be represented by a union). These elections provide a particularly good laboratory to study voter behavior because many of the elections have sufficiently few eligible voters that individuals can have a substantial probability of being pivotal. I implement this model empirically using data on over 75,000 of these elections held from 1972-2009. The results suggest that most individuals (over 80 percent) vote in these elections independent of consideration of the likelihood that they will be pivotal. Among the remainder, it appears that 1) the likelihood of voting falls with election size, 2) the likelihood of voting increases with the expected closeness of the election outcome, and 3) the marginal eect of closeness on the likelihood off voting increases in magnitude with election size. While the first two findings are consistent with the standard rational choice model, the third is not. The results suggest that, while these individuals consider first-order variation in the probability that they will be pivotal, they do not carry out a complete calculation of the probability of being pivotal.
    Keywords: Voting behavior, secret ballots, unions, rational choice
    JEL: J21 J45 D63 D10
    Date: 2009–10
  3. By: Siddhartha Bandyopadhyay (Birmingham); Kalyan Chatterjee (Penn State); Tomas Sjostrom (Rutgers)
    Abstract: Pre-electoral coalitions occur frequently in parliamentary democracies. They influence post election coalition formation and surplus division. We study a game theoretic model where political parties can form coalitions both before (ex ante) and after (ex post) the elections. Ex ante coalitions can commit to a seat-sharing arrangement, but neither to a policy nor to a division of rents from office; coalition members are even free to break up and join other coalitions after the election. Equilibrium ex ante coalitions are not necessarily made up of the most ideologically similar parties, and they form under (national list) proportional representation as well as plurality rule. They do not form just to avoid "splitting the vote", but also because seat-sharing arrangements will influence the ex post bargaining and coalition formation. The ex post bargaining protocol matters greatly: there is more scope for coalition formation, both ex ante and ex post, under an Austen-Smith and Banks protocol than under "random recognition".
    Keywords: NA
    Date: 2009–09–15
  4. By: Sandeep Baliga (Northwestern); David Lucca (Federal Reserve Board); Tomas Sjostrom (Rutgers)
    Abstract: We build a game-theoretic model where aggression can be triggered by domestic political concerns as well as the fear of being attacked. In the model, leaders of full and limited democracies risk losing power if they do not stand up to threats from abroad. In addition, the leader of a fully democratic country loses the support of the median voter if he attacks a non-hostile country. The result is a non-monotonic relationship between democracy and peace. Using the Polity IV dataset, we classify countries as full democracies, limited democracies, and dictatorships. For the period 1816-200, Correlates of War data suggest that limited democracies are more aggressive than other regime types, including dictatorships, and not only during periods when the political regime is changing. In particular, a dyad of limited democracies is more likely to be involved in a militarized dispute than any other dyad (including "mixed" dyads, where the two countries have different regime types). Thus, while full democratization might advance the cause of peace, limited democratization might advance the cause of war. We also find that as the environment becomes more hostile, fully democratic countries become more aggressive faster than other regime types.
    Keywords: democracy, peace
    JEL: C7
    Date: 2009–08–28
  5. By: Francesco Guala; Luigi Mittone; Matteo Ploner
    Abstract: Group membership increases cooperation in social dilemma games, altruistic donation in dictator games, and fair offers in ultimatum games. While the empirical study of group action has grown rapidly over the years, there is little agreement at the theoretical level on exactly why and how group membership changes individual behaviour. According to most theorists, the effect of group framing is channelled primarily via the beliefs of group members, while a dissenting minority identifies changes in preference as the key explanatory mechanism. We report an experiment using the minimal group paradigm and a prisoner’s dilemma with multiple actions, in which we manipulate players’ beliefs and show that mutual knowledge of group affiliation is not necessary for group action. Our results question previous empirical findings, refute theories of social norms based on mutual expectations, and support a specific theory of team preferences based on “circumspect reasoning”
    Keywords: group identity, team preferences, social dilemmas, experimental economics.
    JEL: C72 C91 H41
    Date: 2009
  6. By: Joris Gillet; Edward Cartwright; Mark Van Vugt
    Abstract: We investigate, experimentally, the effects of leadership in a four player weak-link game. A weak-link game is a coordination game with multiple Pareto-ranked Nash equilibria. Because the more efficient equilibria involve a degree of strategic uncertainty groups typically find it difficult to coordinate on more efficient equilibria. Previous studies have shown that leadership by example - in the form of one player acting publicly before the rest of the group - can lead to increased cooperation in collective action problems and we are interested in finding out whether this result extends to weak-link games. Our results suggest that leadership has no effect on initial behavior; the first time that they play the game participants behave the same with leadership as without. We also observe, however, that leadership can allow groups to raise efficiency over time and therefore overcome inefficiency. There doesn't appear to be a difference between voluntary leaders and leaders that are (randomly) appointed.
    Keywords: Leadership; coordination game; weak-link game; minimum-effort game
    JEL: C72 D01 H41
    Date: 2009–10
  7. By: Corchon, Luis
    Abstract: We analyze how a contest organizer chooses the winner when the contestants.efforts are already exerted and commitment to the use of a given contest success function is not possible. We define the notion of rationalizability in mixed-strategies to capture such a situation. Our approach allows to derive different contest success functions depending on the aims and attitudes of the decider. We derive contest success functions which are closely related to commonly used functions providing new support for them. By taking into account social welfare considerations our approach bridges the contest literature and the recent literature on political economy.
    Keywords: Endogenous Contests; Contest Success Function; Mixed-Strategies.
    JEL: D74 D72 C72
    Date: 2009–11–12
  8. By: Konrad, Kai A.; Kovenock, Dan
    Abstract: We study an all-pay contest with multiple identical prizes ("lifeboat seats"). Prizes are partitioned into subsets of prizes ("lifeboats"). Players play a two-stage game. First, each player chooses an element of the partition ("a lifeboat"). Then each player competes for a prize in the subset chosen ("a seat"). We characterize and compare the subgame perfect equilibria in which all players employ pure strategies or all players play identical mixed strategies in the first stage. We find that the partitioning of prizes allows for coordination failure among players when they play nondegenerate mixed strategies and this can shelter rents and reduce rent dissipation compared to some of the less efficient pure strategy equilibria.
    Keywords: all-pay contest; lifeboat; multiple prizes; rent dissipation
    JEL: D72 D74
    Date: 2009–08

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