New Economics Papers
on Collective Decision-Making
Issue of 2010‒05‒22
eighteen papers chosen by

  1. Ideology and cultural policy By Niklas Potrafke
  2. Satisfaction approval voting By Brams, Steven J; Kilgour, D. Marc
  3. Strategic, Sincere and Heuristic Voting under Four Election Rules: An Experimental Study By Blais, Andre; Laslier, Jean-François; Sauger, Nicolas; Van Der Straeten, Karine
  4. Single vote multiple seats elections. Didactics of district versus proportional representation, using the examples of the United Kingdom and The Netherlands By Colignatus, Thomas
  5. The McGarvey problem in judgement aggregation By Pivato, Marcus; Nehring, Klaus
  6. Voting as a Lottery By Attanasi, Giuseppe; Corazzini, Luca; Passarelli, Francesco
  7. Voting games with endogenously infeasible coalitions By László Á. Kóczy
  8. Power indices expressed in terms of minimal winning coalitions By László Á. Kóczy; Fabien Lange
  9. Kingmakers and leaders in coalition formation By Brams, Steven J.; Kilgour, D. Marc
  10. A communication game on electoral platforms By Demange, Gabrielle; Van Der Straeten, Karine
  11. Risk Aversion, Over-Confidence and Private Information as Determinants of Majority Thresholds By Attanasi, Giuseppe; Corazzini, Luca; Georgantzis, Nikolaos; Passarelli, Francesco
  12. America's secret competitive advantage is a dirty secret By Sreedharan, Ranjan
  13. The Collective Action Problem: Within-Group Cooperation and Between-Group Competition in a Repeated Rent-Seeking Game By Cheikbossian, Guillaume
  14. Reforming the Pay-As-You-Go Pension System: Who Votes for it ? When? By Casamatta, Georges; Gondim, Joao Luis
  15. On the Revelation Principle and Dual Mechanisms in Competing Mechanism Games By Peters, Michael
  16. Building Political Collusion: Evidence from Procurement Auctions By Coviello, Decio; Gagliarducci, Stefano
  17. A Folk Theorem for Competing Mechanisms By Peters, Michael; Troncoso-Valverde, Cristian
  18. Power Laws in Firm Size and Openness to Trade: Measurement and Implications By Julian di Giovanni; Andrei A. Levchenko; Romain Ranciere

  1. By: Niklas Potrafke
    Abstract: By examining voting behavior in a referendum on the construction of a concert hall in Germany, I show that political ideology influences cultural policy. The results suggest that resistance to the concert hall was particularly strong in electoral districts in which majorities of citizens vote for the social democrats. By contrast, constituents of rightwing parties voted more in favor of the project. This voting pattern indicates that cultural policy is ideologyinduced. The direct-democratic vote against the concert hall is not in line with the voting behavior of the representatives in the city council. My findings thus show that the voting behavior of political representatives may be decoupled from the preferences of their constituents even in closely knit jurisdictions in which the principal-agent relationship between voters and representatives is usually thought to favor the principals. Moreover, this decoupling has been documented for a policy issue that does not require substantial information or specialized knowledge to be evaluated but rather voters' decisions are based on ideological convictions.
    Keywords: cultural policy, ideology, partisan politics, referendum, direct democracy
    Date: 2010
  2. By: Brams, Steven J; Kilgour, D. Marc
    Abstract: We propose a new voting system, satisfaction approval voting (SAV), for multiwinner elections, in which voters can approve of as many candidates or as many parties as they like. However, the winners are not those who receive the most votes, as under approval voting (AV), but those who maximize the sum of the satisfaction scores of all voters, where a voter’s satisfaction score is the fraction of his or her approved candidates who are elected. SAV may give a different outcome from A--in fact, SAV and AV outcomes may be disjoint—but SAV generally chooses candidates representing more diverse interests than does AV (this is demonstrated empirically in the case of a recent election of the Game Theory Society). A decision-theoretic analysis shows that all strategies except approving of a least-preferred candidate are undominated, so voters will often find it optimal to approve of more than one candidate. In party-list systems, SAV apportions seats to parties according to the Jefferson/d’Hondt method with a quota constraint, which favors large parties and gives an incentive to smaller parties to coordinate their policies and forge alliances, even before an election, that reflect their supporters’ coalitional preferences.
    Keywords: multiwinner election; voting system; approval ballot; proportional representation; apportonment
    JEL: D71 D02 C70
    Date: 2010–04
  3. By: Blais, Andre; Laslier, Jean-François; Sauger, Nicolas; Van Der Straeten, Karine
    Abstract: We report on laboratory experiments on voting. In a setting where subjects have single-peaked preferences we find that the rational choice theory provides very good predictions of actual individual behavior in one-round and approval voting elections, but fares poorly in explaining vote choice under two-round elections. We conclude that voters behave strategically as far as strategic computations are not too demanding, in which case they rely on simple heuristics (in two-round elections) or they just vote sincerely (in single transferable vote elections).
    Date: 2009–07
  4. By: Colignatus, Thomas
    Abstract: No new issues are discussed but we try to improve on the didactics of some well-known elementary features of multiple seats elections that rely on a single vote such as common elections for Parliament or the U.S. Congress. The didactics concentrate on proportionality versus districts. Since some people in the UK want more proportionality and some people in Holland want more districts, the examples of the UK 2010 and Dutch 2006 general elections are developed in some detail. Subordinate issues are (1) majority versus plurality, and (2) threshold methods versus the mechanisms of highest average, greatest remainder and the principle of Sainte-Laguë & Webster. The latter can be optimal for apportionment of states or districts that will get at least one seat. That kind of optimality can be dubious for political parties. Firstly because a party with a majority in the turnout may miss out on majority in Parliament and secondly since voters for some party A may not want that their vote, if wasted, goes to some party B. A proportional representation of the wasted vote w in total n is also possible by leaving seats empty or by filling the seats and taking a qualified majority f = 1/2 * n / (n - w). We thus should distinguish the mirroring of the proportions in the vote and the mirroring of a majority (and it is not quite true that the first takes care of the latter). For a coalition formed after the elections there is the more complex threshold of a "coalition qualified majority" since the coalition may not always be a solid block. A compromise of proportionality and districts is to allow free (non-district) seats for the overflow. E.g. if half of the seats in Parliament are for single seat districts then the district size can be twice the electoral quota and a district candidate is (ideally) elected when gaining a majority of at least one quota. An algorithm is given that includes such rules and some simulations are shown. A multiple seats election is not quite the same as a series of single seat elections. Direct single seat elections such as for the chief executive (President) are riddled with voting paradoxes. Superior to a single vote are some methods with preference orderings like the Borda Fixed Point but these are somewhat complex. Optimal seems the indirect method where the electorate chooses Parliament in a single vote multiple seats election and that Parliament then applies the complexer preference methods for the single seat election of the Premier. For example, though voters only gave a single vote, David Cameron would be the Borda Fixed Point winner, second to Nick Clegg in a Borda count but still winning in a pairwise vote. It is also explained how to use some new routines in Mathematica.
    Keywords: Political economy; political science; public choice; optimal representation; electoral systems; elections; voting; district; proportional representation; electoral quota; majority; pure threshold; qualified majority; greatest remainder; highest average; Webster; Sainte-Laguë; apportionment; wasted vote; multiple seats; single seat; empty seat; free seat; additional-members system; mixed proportionality; political party; party list; coalition
    JEL: D71 C88 A2
    Date: 2010–05–12
  5. By: Pivato, Marcus; Nehring, Klaus
    Abstract: `Judgement aggregation' is a model of social choice where the space of social alternatives is the set of consistent truth-valuations (`judgements') on a family of logically interconnected propositions. It is well-known that propositionwise majority voting can yield logically inconsistent judgements. We show that, for a variety of spaces, propositionwise majority voting can yield any possible judgement. By considering the geometry of sub-polytopes of the Hamming cube, we also estimate the number of voters required to achieve all possible judgements. These results generalize the classic results of McGarvey (1953) and Stearns (1959).
    Keywords: judgement aggregation; majority vote; McGarvey; Stearns; 0/1 polytope; Hamming cube;
    JEL: D70
    Date: 2010–05–10
  6. By: Attanasi, Giuseppe; Corazzini, Luca; Passarelli, Francesco
    Abstract: Voting is a lottery in which an individual who is uncertain about how the others vote wins if she belongs to the majority or loses if she falls into the minority. The risk of losing can be reduced by increasing the majority threshold. This however has the negative effect of also lowering the chance to win. We find that an individual prefers higher majority thresholds when she is more risk averse, less powerful, or less optimistic about the chance that others will vote like her. De facto, raising the majority threshold is a form of protection against the higher risk of being tyrannized by an unfavorable majority. We include these preferences for majority thresholds in a Nash bargaining game that describes constitutional negotiations over voting rules. Individuals that largely avert the risk of being tyrannized behave reluctantly during negotiations, and succeed in getting higher protection through a threshold raise.
    Keywords: majority rule, supermajority, risk aversion
    JEL: D72 D81 H11
    Date: 2009–11
  7. By: László Á. Kóczy (Budapest Tech)
    Abstract: While they use the language of game theory the known measures of a priory voting power are hardly more than statistical expectations assuming the random behaviour of the players. Focusing on normalised indices we show that rational players would behave dierently from the indices' predictions and propose a model that captures such strategic behaviour. In our model players do not automatically participate in every winning coalition they are members of, but have the possibility to block the formation of such a coalition. The strategic use of such blocks can increase voting power, when the latter is dened over the game with the remaining winning coalitions. In our model players do not automatically participate in every winning coalition they are members of, but have the possibility to block the formation of such a coalition. The strategic use of such blocks can increase voting power, when the latter is defined over the game with the remaining winning coalitions.
    Keywords: Banzhaf index, Shapley-Shubik index, a priori voting power, rational players.
    Date: 2010
  8. By: László Á. Kóczy (Óbuda University); Fabien Lange (Óbuda University)
    Abstract: A voting situation is given by a set of voters and the rules of legislation that determine minimal requirements for a group of voters to pass a motion. A priori measures of voting power, such as the Shapley-Shubik index and the Banzhaf value, show the influence of the individual players. We used to calculate them by looking at marginal contributions in a simple game consisting of winning and losing coalitions derived from the rules of the legislation. We introduce a new way to calculate these measures directly from the set of minimal winning coalitions. This new approach logically appealing as it writes measures as functions of the rules of the legislation. For certain classes of games that arise naturally in applications the logical shortcut drastically simplifies calculations. The technique generalises directly to all semivalues. Keywords. Shapley-Shubik index, Banzhaf index, semivalue, minimal winning coalition, Möbius transform.
    Keywords: Shapley-Shubik index, Banzhaf index, semivalue, minimal winning coalition, Möbius transform.
    Date: 2010
  9. By: Brams, Steven J.; Kilgour, D. Marc
    Abstract: Assume that players strictly rank each other as coalition partners. We propose a procedure whereby they “fall back” on their preferences, yielding internally compatible, or coherent, majority coalition(s), which we call fallback coalitions. If there is more than one fallback coalition, the players common to them, or kingmakers, determine which fallback coalition will form. The first player(s) acceptable to all other members of a fallback coalition are the leader(s) of that coalition. The effects of different preference assumption--particularly, different kinds of single-peakedness--and of player weights on the number of coherent coalitions, their connectedness, and which players become kingmakers and leaders are investigated. The fallback procedure may be used (i) empirically to identify kingmakers and leaders or (ii) normatively to select them. We illustrate and test the model by applying it to coalition formation on the U.S. Supreme Court, 2005-2009, which shows the build-up over stages of a conservative coalition that prevailed in nearly half of the 5-4 decisions.
    Keywords: coalition formation; fallback procedure; kingmakers; leaders; US Supreme Court
    JEL: D72 C7 D85
    Date: 2010–03
  10. By: Demange, Gabrielle (Paris School of Economics (EHESS)); Van Der Straeten, Karine (Toulouse School of Economics)
    Abstract: This paper proposes a game to study strategic communication on platforms by parties. Parties’ platforms have been chosen in a multidimensional policy space, but are imperfectly known by voters. Parties strategically decide the emphasis they put on the various issues, and thus the precision of the information they convey to voters on their position on each issue. The questions we address are the following: what are the equilibria of this communication game? How many issues will they address? Will parties talk about the same issues or not? Will they talk on issues that they "own" or not?
    JEL: C70 D70
    Date: 2009–11–23
  11. By: Attanasi, Giuseppe; Corazzini, Luca; Georgantzis, Nikolaos; Passarelli, Francesco
    Abstract: We study, both theoretically and experimentally, the relation between preferred majority thresholds and behavioral traits such as the degree of risk aversion and the subjective confidence on others preferences over the alternative to vote. The main theoretical findings are supported by experimental data. The majority threshold chosen by a subject is positively and significantly correlated with her degree of risk aversion while it is negatively and significantly associated to her con…dence on othersvotes. Moreover, in a treatment in which each subject can privately observe the distribution of preferences over a sub-group of participants, we …find that the quality of information crowds-out subject's confidence.
    Keywords: majority threshold, risk aversion, (over-)confidence
    JEL: D91 D72 D81 H11
    Date: 2009–09
  12. By: Sreedharan, Ranjan
    Abstract: The noted management guru Michael E Porter identifies seven unique competitive advantages for the U.S. economy to explain the country’s pre-eminence; they range from (among others) its environment for entrepreneurship, its institutions of higher learning, its technology and innovation machine, to its commitment to competition and free markets. In this article, I argue that there is another critical competitive advantage exclusive to the U.S. that arises from its electoral system characterised by consistently low levels of voter turnout in national elections and with disproportionately large numbers of its poorest and least educated citizens not voting. I begin by looking at reasons why the poor in America vote in far lesser proportions than their numbers, and particularly, at the various formal and informal impediments that prevent voting by the poor. I then consider the impact this would have had on America’s economy and its competitiveness. The core idea of this paper is that when an electoral process effectively filters out significant sections of the poor, the country would find it far easier to put in place (and sustain) sound free-market economic policies focussed on long term objectives with generous incentives for creation of wealth and with a tight leash on welfare and other entitlement programmes. I contend that America’s undeniably greater acceptance of the rigours of the free-market system is not (as is commonly believed) a product of a unique history or culture but, in truth, is closely tied to a discriminatory and exclusionary electoral system that has strong historical roots.
    Keywords: Competitive advantage, Voter turnout, Disenfranchisement
    JEL: O51 M21
    Date: 2009–09–01
  13. By: Cheikbossian, Guillaume
    Abstract: This paper analyzes the ability of group members to cooperate in rent-seeking activities in a context of between-group competition. For this purpose, we develop an infinitely repeated rent-seeking game between two groups of different size. We first investigate Nash reversion strategies to support cooperative behavior in a given group before analyzing double-edge trigger strategies which have the property that cheating on the cooperative agreement in a given group is followed by non-cooperation in this group and cooperation in the rival group. The main conclusion is that the set of parameters for which cooperation can be sustained within the larger group as a subgame perfect outcome is as large as that for which cooperation can be sustained in the smaller group. Hence, in contrast with Olson’s (1965) celebrated thesis but in accordance with many informal and formal observations, the larger group is as effective as the smaller group in furthering its interest.
    Keywords: collective action, rent-seeking, within-group cooperation
    JEL: D72 D74 C72 C73
    Date: 2009–09–24
  14. By: Casamatta, Georges; Gondim, Joao Luis
    Abstract: We assess the political support for parametric reforms of the Pay-As-You-Go pension system following a downward fertility shock. Using a continuous time overlapping generations model, we argue that reforms that consist in cutting pension benefits or increasing the retirement age are likely to receive a strong political support. An increase in the contribution rate has, on the contrary, fewer chances to be approved by the majority of the voters. This framework also allows to identify the costs and benefits of postponing each type of reform and to determine how the timing of the dierent reforms affects their political support.
    Keywords: Pay-As-You-Go, parametric reforms, fertility shock
    Date: 2009–10
  15. By: Peters, Michael
    Abstract: This paper provides a set of mechanisms that we refer to as emph{dual mechanisms. }These mechanisms have the property that every outcome that can be supported as a Bayesian equilibrium in a competing mechanism game can be supported as an equilibrium in dual mechanisms. In this sense, dual mechanisms play the same role as direct mechanisms do in single principal problems. The advantage of these mechanisms over alternatives like the universal set of mechanisms cite{epspet97} is that they are conceptually straightforward and no more difficult to deal with than the simple direct mechanisms used in single principal mechanism design.
    Keywords: competing mechanisms, revelation principle
    Date: 2010–05–13
  16. By: Coviello, Decio (University of Rome Tor Vergata); Gagliarducci, Stefano (University of Rome Tor Vergata)
    Abstract: We investigate the relationship between the time politicians stay in office and the functioning of public procurement. To this purpose, we collect a data set on the Italian municipal governments and all the procurement auctions they administered between 2000 and 2005. Identification is achieved through the introduction of a two-term limit for the mayor in March 1993: since elections were not coordinated across cities, and previous terms were not counted in the limit, mayors appointed right before the reform could be reelected for two additional terms, while the others for one only. Our primary finding is that one extra term in office deteriorates public spending. In fact, it decreases the number of bidders and, most importantly, the winning rebate. Interestingly, we also find that the probability that the same firm is awarded more auctions, or that the winning firm is local, increases with time in office. These results are compatible with the predictions of a model of favoritism in repeated procurement auctions, where time reveals collusive types, thus increasing the value of illegal connections at the expense of higher procurement costs.
    Keywords: procurement auction, collusion, public works, time in office
    JEL: D44 D72 D73 H57 H70
    Date: 2010–05
  17. By: Peters, Michael; Troncoso-Valverde, Cristian
    Abstract: We prove a folk theorem for games in which mechanism designers compete in mechanisms and in which there are at least 4 players. All allocations supportable by a centralized mechanism designer, including allocations involving correlated actions (and correlated punishments) can be supported as Bayesian equilibrium outcomes in the competing mechanism game.
    Date: 2010–05–13
  18. By: Julian di Giovanni (International Monetary Fund); Andrei A. Levchenko (University of Michigan); Romain Ranciere (International Monetary Fund, PSE and CEPR)
    Abstract: Existing estimates of power laws in firm size typically ignore the impact of international trade. Using a simple theoretical framework, we show that international trade systematically affects the distribution of firm size: the power law exponent among exporting firms should be strictly lower in absolute value than the power law exponent among non-exporting firms. We use a dataset of French firms to demonstrate that this prediction is strongly supported by the data. While estimates of power law exponents have been used to pin down parameters in theoretical and quantitative models, our analysis implies that the existing estimates are systematically lower than the true values. We propose two simple ways of estimating power law parameters that take explicit account of exporting behavior.
    Keywords: Firm Size Distribution, International Trade, Power Laws
    JEL: F12 F15
    Date: 2010–03

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