New Economics Papers
on Collective Decision-Making
Issue of 2010‒01‒23
six papers chosen by

  1. A Non-empty Core May Not Coincide with the Uncovered Set in Spatial Voting Situations By A Bhattacharya; V Brosi; F Ciardiello
  2. Public Goods and Voting on Formal Sanction Schemes: An Experiment By Louis Putterman; Jean-Robert Tyran; Kenju Kamei
  3. Habit formation, strategic extremism, and debt policy By Egil Matsen; Øystein Thøgersen
  4. Political Budget Cycles in the European Union and the Impact of Political Pressures: A dynamic panel regression analysis By Georgios Efthyvoulou
  5. The Relation between Monotonicity and Strategy-Proofness By Bettina Klaus; Olivier Bochet
  6. Oil and the duration of dictatorships By Crespo Cuaresma, Jesus; Oberhofer, Harald; Raschky, Paul

  1. By: A Bhattacharya; V Brosi; F Ciardiello
    Abstract: In this note it is shown that in contradiction to the well-known claim in Cox (AJPS, 1987) (repeated in a number of subsequent works), the uncovered set in a spatial voting situation does not necessarily coincide with the core even when the core is non-empty.
    Keywords: spatial voting models; uncovered set; core; stable set
    JEL: C71 C72
    Date: 2010–01
  2. By: Louis Putterman (Department of Economics, Brown University); Jean-Robert Tyran (Department of Economics, University of Copenhagen); Kenju Kamei (Department of Economics, Brown University)
    Abstract: The burgeoning literature on the use of sanctions to support public goods provision has largely neglected the use of formal or centralized sanctions. We let subjects playing a linear public goods game vote on the parameters of a formal sanction scheme capable both of resolving and of exacerbating the free-rider problem, depending on parameter settings. Most groups quickly learned to choose parameters inducing efficient outcomes. But despite uniform money payoffs implying common interest in those parameters, voting patterns suggest significant influence of cooperative orientation, political attitudes, and of gender and intelligence.
    Keywords: public good; voluntary contribution; formal sanction; experiment; penalty; voting
    JEL: C91 C92 D71 D72 H41
    Date: 2010–01
  3. By: Egil Matsen; Øystein Thøgersen
    Abstract: We suggest a probabilistic voting model where voters’ preferences for alternative public goods display habit formation. Current policies determine habit levels and in turn the future preferences of the voters. This allows the incumbent to act strategically in order to influence the probability of reelection. Comparing to a benchmark case of a certain reelection, we demonstrate that the incumbent’s optimal policy features both a more polarized allocation between the alternative public goods and a debt bias.
    Keywords: Budget deficits, voting, extremism, habit formation
    JEL: D72 D78 H62
    Date: 2010–01
  4. By: Georgios Efthyvoulou (Department of Economics, Mathematics & Statistics, Birkbeck)
    Abstract: This paper investigates the presence of political budget cycles (PBCs) in the European Union using a data set encompassing all 27 current member states over the period 1997-2008, and analyzes what may explain their variability across countries and over time. Conditioning on partisan considerations and several socio-economic variables, we find evidence in favor of a systematic electoral cycle in fiscal policy (i.e. spending and budget deficits are raised in election years). Furthermore, we find that PBCs are much larger in the Eurozone countries than in the countries that have not yet adopted the euro. Finally, we discuss an interesting area for future research, namely, fiscal policy manipulations are influenced by the information available to the market before elections. Specifically, we show that the size of PBCs is inversely proportional to the relative weight voters assign to non-economic issues prior to an election and positively correlated with the uncertainty over the electoral outcome. Once we account for these two features, the aforementioned differences between the Eurozone and the non-Eurozone countries seem to disappear.
    Date: 2010–01
  5. By: Bettina Klaus; Olivier Bochet
    Abstract: The Muller-Satterthwaite Theorem (Muller and Satterthwaite, 1977) establishes the equivalence between Maskin monotonicity and strategy-proofness, two cornerstone conditions for the decentralization of social choice rules. We consider a general model that covers public goods economies as in Muller and Satterthwaite (1977) as well as private goods economies. For private goods economies we use a weaker condition than Maskin monotonicity that we call unilateral monotonicity. We introduce two easy-to-check domain conditions which separately guarantee that (i) unilateral/Maskin monotonicity implies strategy-proofness (Theorem 1) and (ii) strategy-proofness implies unilateral/Maskin monotonicity (Theorem 2). We introduce and discuss various classical single-peaked domains and show which of the domain conditions they satisfy (see Propositions 1 and 2 and an overview in Table 1). As a by-product of our analysis, we obtain some extensions of the Muller-Satterthwaite Theorem as summarized in Theorem 3. We also discuss some new "Muller-Satterthwaite domains" (e.g.,Proposition 3).
    Keywords: Muller-Satterthwaite Theorem; restricted domains; rich domains; single-peaked domains; strategy-proofness; unilateral/Maskin monotonicity
    JEL: D71
    Date: 2010–01
  6. By: Crespo Cuaresma, Jesus (Department of Economics, University of Innsbruck); Oberhofer, Harald (University of Salzburg); Raschky, Paul (Department of Economics, Monash University)
    Abstract: This paper studies empirically the relationship between oil endowment and the duration of autocratic leaders. A simple theoretical setting shows how the relationship between oil endowment and the duration of the dictatorial regime is mediated by the price of oil. Using a dataset on 106 dictators, our empirical analysis supports the predictions of the theoretical model and indicates that dictators in countries which are relatively better endowed in terms of oil stay longer in office. This result is robust to changes in the definition of dictatorial regimes, as well as to controlling for other economic and political variables.
    Keywords: Natural resources; dictatorship; political economy; duration
    JEL: D72 H11 Q34
    Date: 2010–01–14

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