New Economics Papers
on Collective Decision-Making
Issue of 2010‒10‒02
eight papers chosen by

  1. The limited power of voting to limit power By Hong Geng; Arne Robert Weiss; Irenaeus Wolff
  2. Ecological Inference for the characterization of electoral turnout: The Portuguese Case By Castela, Eugénia; Villardón, Purificación
  3. Coalition formation among farsighted agents By HERINGS, Jean - Jacques; MAULEON, Ana; VANNETELBOSCH, Vincent
  4. Why Green Parties Should Fear Successful International Climate Agreements By Patrick Laurency; Dirk Schindler
  5. The Banzhaf Index in Complete and Incomplete Shareholding Structures: A New Algorithm By Marc Levy
  6. Revolving Door Lobbyists By Jordi Blanes i Vidal; Mirko Draca; Christian Fons-Rosen
  7. Multiple Equilibria in Tullock Contests By Subhasish M. Chowdhury; Roman M. Sheremeta
  8. We-thinking and vacillation between frames: filling a gap in Bacharach's theory By Smerilli, Alessandra

  1. By: Hong Geng; Arne Robert Weiss; Irenaeus Wolff
    Abstract: In this paper, we experimentally approach the question of which aspects of a voting procedure are able to restrict elected candidates' willingness to use their power in an opportunistic way. For this purpose, we rule out reelection concerns and analyse whether the presence of a vote by itself matters for the exercise of power. We compare two kinds of electoral campaigns: self-descriptions of personality and promises regarding prospective in-office behaviour. We find that social approval as conveyed by a vote does not suffice to induce pro-social choices by elected candidates. On the other hand, when campaigns are promise-based, elected candidates transfer more to their recipients than candidates selected by a random draw even though promises do not differ. This refutes explanations based on a taste for consistency or costs of lying. In contrast, the fact that the correlation between dictators' promises and their beliefs on voter expectations is considerably strengthened in the presence of a vote offers support to a guilt-aversion hypothesis. However, this support is qualified by the correlation between dicators' second-order beliefs and their choices, which is weaker than predicted. Overall, our results suggest the power of voting to limit the self-oriented exertion of power is limited and context-specific.
    Keywords: Elections; Electoral campaigns; Promises; Guilt-aversion; Costs of lying; Dictator game; Social distance; Entitlement; Experiment
    Date: 2010
  2. By: Castela, Eugénia (University of Algarve); Villardón, Purificación (University of Salamanca)
    Abstract: Ecological Inference (IE) is a set of statistical methods that estimate the cells of a contingency table when only the marginal totals are known. Based on King’s model (1997) and considering the legislative elections in Portugal between the years 2002 and 2005, we try to find the stability coefficients (the citizens who, keep the same attitude towards voting in both elections, i.e., they opt for vote or abstention in two consecutive elections) and electoral instability (the citizens who vote in one election and opt for abstention on the other, regardless of the order) for every and each of the municipalities in Portugal. In the Portuguese case, King’s method did not give good estimations. Therefore, in order to find spatial homogeneity in terms of the main political tendencies on the elections under study, we propose territorial “reorganization” based on an abstention pattern arising from the HJ-Biplot method (Galindo, 1986). The territorial “reorganisation” has provided 6 groups of provinces to which King’s model was applied in order to find the percentage of electors who voted or chose abstention in both elections, as well as the percentage of floating electors, i.e., the electors who voted in one election and not on the other.
    Keywords: Ecological Inference; HJ-Biplot; Territorial Organization; Portuguese Elections
    JEL: C00
    Date: 2010–07–30
  3. By: HERINGS, Jean - Jacques (Department of Economics, Maastricht University, 6200 MD Maastricht, The Netherlands); MAULEON, Ana (FNRS; CEREC, Facultés universitaires Saint-Louis, B-1000 Brussels, Belgium; Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium); VANNETELBOSCH, Vincent (FNRS and Université catholique de Louvain, CORE, B-1348 Louvain-la-Neuve, Belgium)
    Abstract: A set of coalition structures P is farsightedly stable (i) if all possible deviations from any coalition structure p belonging to P to a coalition structure outside P are deterred by the threat of ending worse off or equally well off, (ii) if there exists a farsighted improving path from any coalition structure outside the set leading to some coalition structure in the set, and (iii) if there is no proper subset of P satisfying the first two conditions. A non-empty farsightedly stable set always exists. We provide a characterization of unique farsightedly stable sets of coalition structures and we study the relationship between farsighted stability and other concepts such as the largest consistent set and the von Neumann-Morgenstern farsightedly stable set. Finally, we illustrate our results by means of coalition formation games with positive spillovers.
    Keywords: coalition formation, farsighted players, stability
    Date: 2010–05–01
  4. By: Patrick Laurency; Dirk Schindler
    Abstract: In recent years, differences between traditional and green parties have been leveled with respect to climate protection. We show that this convergence in party platforms can be explained by successful international climate agreements. We set up a voting model where political parties differ in their preferences for climate protection and where climate protection causes both resource costs and distortions in the international allocation of production. Successful international agreements, which increase climate protection, reduce effective abatement costs and affect traditional parties in a different way than green parties, since a lower preference for climate protection implies a higher price (cost) elasticity of demand. Furthermore, we point out that increasing flexibility and efficiency in abatement mechanisms is preferable to forming a climate coalition that focuses directly on emission reduction commitments.
    Keywords: Climate Protection, Political Economy, Platform Convergence
    Date: 2010
  5. By: Marc Levy
    Abstract: In this global world many firms present a complex shareholding structure with indirect participation, such that it may become difficult to assess a firm’s controllers. Furthermore, if there are numerous dominant shareholders, the control can be shared between them. Determining who has the most influence often is a difficult task. To measure this influence, game theory allows modeling voting game and computing the Banzhaf index. This paper first offers a new algorithm to compute this index in all structures and suggests some modelisations of the floating shareholder. Then, our model is applied to a real case study: The French Group Lafarge. This exemplary case demonstrates how the float’s structure and hidden coalition can impact the power relationship between dominant shareholders.
    Keywords: Ownership structure; Control; Banzhaf index
    JEL: C63 G32 L22
    Date: 2010–09
  6. By: Jordi Blanes i Vidal; Mirko Draca; Christian Fons-Rosen
    Abstract: Washington's `revolving door' - the movement from government service into the lobbyingindustry- is regarded as a major concern for policy-making. We study how ex-governmentstaffers benefit from the personal connections acquired during their public service. Lobbyistswith experience in the office of a US Senator suffer a 24% drop in generated revenue whenthat Senator leaves office. The effect is immediate, discontinuous around the exit period andlong-lasting. Consistent with the notion that lobbyists sell access to powerful politicians, thedrop in revenue is increasing in the seniority of and committee assignments power held bythe exiting politician.
    Keywords: Lobbying, revolving door, US Congress, political connections, political elites
    JEL: H11 J24 J45
    Date: 2010–08
  7. By: Subhasish M. Chowdhury (School of Economics, University of East Anglia); Roman M. Sheremeta (Argyros School of Business and Economics, Chapman University)
    Abstract: We find the sufficient conditions for the existence of multiple equilibria in Tullock-type contests and show that asymmetric equilibria may arise even under symmetric prize and cost structures. We also identify contests in the literature where multiple equilibria exist under reasonably weak conditions.
    Keywords: rent-seeking, contest, asymmetric equilibrium, multiple equilibria
    JEL: C62 C72 D72 D74
    Date: 2010–09–17
  8. By: Smerilli, Alessandra
    Abstract: The idea of team-thinking or we-thinking is increasingly drawing the attention of economists. The main claim of scholars who analyze we-thinking is that it is a coherent mode of reasoning people may use when they face a decision problem. But, if there is a general agreement on the existence of the we-mode of reasoning and on the fact people endorse it, scholars have different opinions about the way in which we-thinking arises and how it brings people to behave in a particular way. Then different authors have proposed different analyses of the issue. In this paper I address the issue by proposing a simple model of vacillation between the I and we-modes of reasoning, as a way in which we-thinking can arise in the face of a decision problem. The model is based on a not fully developed intuition - the double-crossing problem in the PD game - of Bacharach, whose theory is the most developed from an analytical point of view.
    Keywords: we-thinking; frames; vacillation; game theory
    JEL: C79 Z19 C72
    Date: 2010–08–25

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