New Economics Papers
on Collective Decision-Making
Issue of 2010‒11‒27
fourteen papers chosen by

  1. An Evolutionary Analysis of Turnout With Conformist Citizens By Massimiliano Landi; Mauro Sodini
  2. What Determined Conservative Success in the 2010 U.K. General Election? A Bayesian Spatial Econometric Analysis By Christa D. Jensen; Donald Lacombe; Stuart Mcintyre
  3. Conformism and Turnout By Massimiliano Landi; Mauro Sodini
  4. Judge:Don't Vote! By Michel Balinski; Rida Laraki
  5. Choosing choices: Agenda selection with uncertain issues By Raphaël Godefroy; Eduardo Perez-Richet
  6. International Law, Domestic Political Orders, and the ‘Democratic Imperative’: Has Democracy Finally Emerged as a Global Legal Entitlement? By Christian Pippan
  7. Reducing Rent Seeking by Providing Wide Public Service By Amihai Glazer; Stef Proost
  9. CAPS IN SEQUENTIAL CONTESTS By Aner Sela; Reut Megidish
  11. Re-election Concerns and the Failure of Plea Bargaining By Siddhartha Bandyopadhyay; Bryan C McCannon
  12. Simultaneous Nash Bargaining with Consistent Beliefs By Roberto Burguet; Ramon Caminal
  13. Do FOMC Members Herd? By Jan-Christoph Rülke; Peter Tillmann
  14. Egalitarian-equivalent Groves Mechanisms in the Allocation of Heterogeneous Objects By Duygu Yengin

  1. By: Massimiliano Landi (School of Economics, Singapore Management University); Mauro Sodini (Dipartimento di Statistica e Matematica Applicata all'Economia, Universita degli Studi di Pisa)
    Abstract: We propose an evolutionary analysis of a voting game where citizens have a preference for conformism that adds to the instrumental preference for the electoral outcome. Multiple equilibria arise, and some generate high turnout. Simulations of best response dynamics show that high turnout is asymptotically stable if conformism matters but its likelihood depends on the reference group for conformism: high turnout is more likely when voters care about their own group's choice, as this better overrides the free rider problem of voting games. Comparative statics on the voting cost distribution, the population's size or the groups' composition are also done.
    Keywords: Turnout, Turnout, coordination games, Poisson games, conformism, selection dynamics.
    JEL: D72 C72 C73
    Date: 2010–11
  2. By: Christa D. Jensen (Department of Economics, West Virginia University); Donald Lacombe (Department of Economics, West Virginia University); Stuart Mcintyre (Department of Economics, Strathclyde University)
    Abstract: The Conservative Party won the recent General Election in the United Kingdom (UK), gaining the most votes and seats of any single party. Conservatives simultaneously performed particularly well in some areas of the UK and poorly in others. In attempting to explain the variation in voting behaviour during this election, we consider an analysis involving an explicit accounting of geographic considerations. The spatial econometric analysis of voting behaviour is still quite rare in the literature, and analyses using a full suite of models, as employed here, are even rarer. We use data from various sources to examine the effects of a range of economic, socio-economic, and political variables on the percentage of the vote obtained by the Conservative Party in each UK constituency in the 2010 General Election. We employ recent advances in Bayesian spatial econometric modelling to determine the appropriate model for drawing these inferences. We find that there is significant spatial error dependence in a model of the percentage of the vote obtained by the Conservative Party in the 2010 UK General Election, justifying the use of spatial econometric methods for our analysis. By explicitly modelling this spatial phenomenon, we get better estimates of the impact of our chosen economic, socio-economic, and political explanatory variables. Results that seem contrary to our prior expectations when using a non-spatial regression model change when estimated using spatial econometric techniques.
    Keywords: Bayesian spatial econometric analysis, spatial voting analysis, UK General Election 2010
    JEL: C11 C21 D72
    Date: 2010–10
  3. By: Massimiliano Landi (School of Economics, Singapore Management University); Mauro Sodini (Dipartimento di Statistica e Matematica Applicata all'Economia, Universita degli Studi di Pisa)
    Abstract: This paper proposes a model of turnout in which citizens have a preference for conformism, which adds to the instrumental preference for the electoral outcome. Under this environment multiple equilibria arise, some that generate a (more realistic) high level of turnout, for a wide rage of parameter values. It is also shown that high levels of turnout are robust to the introduction of asymmetry and heterogeneity in the parameter governing the preference for conformism and with respect to the reference group for conformism. This model suggests that high turnout can only be achieved as the outcome of a particular coordination among citizens and, therefore, introduces a di erent perspective in understanding the citizens' decision to vote, which allows also to account for large shifts in turnout rates that are observed after compulsory laws have been introduced or abolished. Moreover, this set up proposes a theory for the D term used in rational theories of voting to account for high turnout rates.
    Keywords: Turnout, compulsory voting, Poisson games, coordination games, conformism.
    JEL: D72 C72
    Date: 2010–11
  4. By: Michel Balinski (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Rida Laraki (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X)
    Abstract: This article explains why the traditional model of the theory of social choice misrepresents reality, it cannot lead to acceptable methods of ranking and electing in any case, and a more realistic model leads inevitably to one method of ranking and electing—majority judgment—that best meets the traditional criteria of what constitutes a good method.
    Keywords: Arrow's paradox ; Condorcet's paradox ; Majority judgment ; Skating ; Social choice ; Strategic manipulation ; Voting
    Date: 2010–11–18
  5. By: Raphaël Godefroy; Eduardo Perez-Richet
    Abstract: This paper studies selection rules i.e. the procedures committees use to choose whetherto place an issue on their agenda. The main ingredient of the model is that committee members are uncertain about their final preferences at the selection stage: they only know the probability that they will eventually prefer the proposal to the status quo at the decision stage. This probability is private information. We find that a more stringent selection rule makes the voters more conservative. Hence individual behavior reinforces the effect of the rule instead of balancing it. For a voter, conditional on being pivotal, the probability that the proposal is adopted depends on which option she eventually favors. The probability that the proposal is adopted if she eventually prefers the proposal increases at a higher rate with the selection rule than if she eventually prefers the status quo. In order to compensate for that, the voters become more selective. The decision rule has the opposite effect. We describe optimal rules when there is a fixed cost of organizing the final election.
    Date: 2010
  6. By: Christian Pippan
    Abstract: Abstract: After the end of the Cold War, democratic transitions in many parts of the world, a significant increase in the number of signatories to global and regional human rights instruments containing participatory rights, and a growing interest in ‘free and fair’ elections on the part of the UN and other international organizations have led some legal scholars to assert the emergence of an internationally constituted ‘right to democratic governance’. In a certain sense, this was in line with the predominantly liberal reading of the events of 1989 in social science, which interpreted the demise of European communism as a confirmation of the superiority of Western-style democracy over other political regimes. In the controversial debate that followed its initial articulation in the early 1990s, the ‘democratic entitlement thesis’ was hailed by some commentators as finally giving substance to widely accepted but highly ambiguous international concepts such as self-determination, popular sovereignty and political participation, whereas others criticized it as a form of ‘liberal messianism’, or even as a ‘democratic jihad’. The present essay aims to revisit the discussion in light of recent international developments, particularly within the United Nations. Following a general introduction (Section 1), it briefly recapitulates the major strands of the democratic norm thesis and the vivid critique it has received (Section 2). In order to better grasp the overall problématique raised by the thesis, the main section of the paper (Section 3) then addresses three interrelated, yet ultimately distinct, questions: Does the international legal system display any preference for democracy over other domestic political regimes and concurrent constitutional orders? If so, does the contemporary international order embrace any particular vision of democracy? Finally, provided the two prior questions can be answered in the affirmative, do any of the components of an emerging international vision of democracy have a universal legal character? The essay concludes (in Section 4) by arguing that, unless one (inappropriately) equates democracy with free and fair elections, no general rule of international law can be identified requiring states to design their domestic political and constitutional orders in accordance with a particular (e.g. liberal) model of democracy. Moreover, while the persistent refusal to allow for the holding of periodic and genuine elections may today be regarded as constituting a violation of a customary norm (an argument supported here), the responsible government usually does not forfeit its legal standing in the international arena. Notwithstanding these findings, it will be argued that an international regime on domestic democratic governance is progressively taking shape. This regime is comprised of principles, norms, rules, and standards with varying degrees of normativity, around which the expectations of international actors regarding efforts of states ‘to implement the principles and practices of democracy’ increasingly converge.
    Date: 2010–10–18
  7. By: Amihai Glazer (Department of Economics, University of California-Irvine); Stef Proost (Center for Economic Studies, KULeuven)
    Abstract: A winning coalition which sets policy cannot always ensure that members of the coalition will be the ones getting benefits. Different jurisdictions (including members of the winning coalition) may then engage in costly rent seeking. Maximizing the welfare of the winning coalition may therefore require providing services to jurisdictions which are not members of the winning coalition, thereby reducing rent seeking by members of the winning coalition. The paper shows how this mechanism can generate insuffcient supply of public services, and offers another explanation for the use of co-funding requirements by the central government.
    Keywords: Publicly provided goods; Rent seeking
    JEL: H42 D72
    Date: 2010–11
  8. By: Aner Sela (Department of Economics, Ben-Gurion University of the Negev, Israel); Reut Megidish
    Abstract: We study all-pay contests with an exogenous minimal effort constraint where a player can participate in a contest only if his effort (output) is equal to or higher than the minimal effort constraint. Contestants are privately informed about a parameter (ability) that affects their cost of effort. The designer decides about the size and the number of prizes. We analyze the optimal prize allocation for the contest designer who wishes to maximize either the total effort or the highest effort. It is shown that if the minimal effort constraint is relatively high, the winner-take-all contest in which the contestant with the highest effort wins the entire prize sum does not maximize the expected total effort nor the expected highest effort. In that case, the random contest in which the entire prize sum is equally allocated to all the participants yields a higher expected total effort as well as a higher expected highest effort than the winner-take-all contest.
    Keywords: Winner-take-all contests, all-pay auctions, participation constraints.
    JEL: D44 O31 O32
    Date: 2010
  9. By: Aner Sela (Department of Economics, Ben-Gurion University of the Negev, Israel); Reut Megidish
    Abstract: We study a sequential two-stage all-pay auction with two identical prizes. In each stage, the players compete for one prize and each player may win either one or two prizes. The designer may impose a cap on the players' bids in each of the stages. We analyze the equilibrium in this sequential all-pay auction with bid caps and show that capping the players' bids is pro?table for a designer who wishes to maximize the players' expected total bid.
    Keywords: Multi-stage contests, All-pay auctions, Bid caps
    JEL: D44 D82 J31 J41
    Date: 2010
  10. By: Aner Sela (Department of Economics, Ben-Gurion University of the Negev, Israel); Eyal Erez
    Abstract: We study a round-robin tournament with n symmetric players where in each of the n-1 stages each of the players competes against a different player in the Tullock contest. Each player has a limited budget of effort that decreases within the stages proportionally to the effort he exerted in the previous stages. We show that when the prize for winning (value of winning) is equal between the stages, a player's effort is weakly decreasing over the stages. We also show how the contest designer can influence the players' allocation of effort by changing the distribution of prizes between the stages. In particular, we analyze the distribution of prizes over the stages that balance the effort allocation such that a player exerts the same effort over the different stages. In addition, we analyze the distribution of prizes over the stages that maximizes the players' expected total effort.
    Date: 2010
  11. By: Siddhartha Bandyopadhyay; Bryan C McCannon
    Abstract: A new explanation for the failure of plea bargaining is provided. It is shown that a retention agent (i.e. median voter) can use convictions at trial as a signal of the quality of a prosecutor. This encourages a public prosecutor to take cases to trial even when both social welfare and her utility (absent the retention motivatiOn) from plea bargaining is higher.
    Keywords: plea bargaining, prosecutor evaluation, signaling
    JEL: K41 D82
    Date: 2010–10
  12. By: Roberto Burguet; Ramon Caminal
    Abstract: We propose and analyze a new solution concept, the R solution, for three-person, transferable utility, cooperative games. In the spirit of the Nash Bargaining Solution, our concept is founded on the predicted outcomes of simultaneous, two-party negotiations that would be the alternative to the grand coalition. These possibly probabilistic predictions are based on consistent beliefs. We analyze the properties of the R solution and compare it with the Shapley value and other concepts. The R solution exists and is unique. It belongs to the bargaining set and to the core whenever the latter is not empty. In fact, when the grand coalition can simply execute one of the three possible bilateral trades, the R solution is the most egalitarian selection of the bargaining set. Finally, we discuss how the R solution changes important conclusions of several well known Industrial Organization models.
    Keywords: cooperative games, bargaining, endogenous fall-back options, consistent beliefs, R solution.
    JEL: C71 C78 L14
    Date: 2010–11–17
  13. By: Jan-Christoph Rülke (WHU - Otto Beisheim School of Management,WHU - Otto Beisheim School of Management); Peter Tillmann (Justus-Liebig-University Giessen)
    Abstract: Twice a year FOMC members submit forecasts for growth, unemplyoment and in ation to be published in the Humphrey-Hawkins Report to Congress. In this paper we use individual FOMC forecasts to assess whether these forecasts exhibit herding behavior, a pattern often found in private sector forecasts. While growth and unemployment forecast do not show herding behavior, the in ation forecasts show strong evidence of anti-herding, i.e. FOMC members intentionally scatter their forecasts around the consensus. Interestingly, anti-herding is more important for nonvoting members than for voters.
    Keywords: Central Federal Open Market Committee, monetary policy, forecasting, herding
    JEL: E43 E52 E27
    Date: 2010
  14. By: Duygu Yengin (School of Economics, University of Adelaide)
    Abstract: We study the problem of allocating objects when monetary transfers are possible. We are interested in mechanisms that allocate the objects in an efficient way and induce the agents to report their true preferences. Within the class of such mechanisms, first we characterize egalitarian-equivalent mechanisms. Then, we add a bounded-deficit condition and characterize the corresponding class. Finally, we investigate the relations between egalitarian-equivalence and other fairness notions such as no-envy.
    Keywords: fairness, allocation of indivisible goods and money, task assignments, strategy-proofness, the Vickrey-Clarke-Groves mechanisms, egalitarian-equivalence, no-envy, order preservation
    JEL: C79 D61 D63
    Date: 2010–11

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