New Economics Papers
on Collective Decision-Making
Issue of 2011‒05‒07
thirteen papers chosen by

  1. Three Stories about the Chance of Casting a Pivotal Vote By Dan Usher
  2. A Duty to Vote By Dan Usher
  3. On the (In-)Efficiency of Unanimity in Multilateral Bargaining with Endogenous Recognition By Nicolas Quérou; Raphael Soubeyran
  4. Satisfaction and adaptation in voting behavior: an empirical exploration By Martorana, Marco; Mazza, Isidoro
  5. Narrowing the field in elections: the next-two rule By Brams, Steven J.; Kilgour, D. Marc
  6. Voting Rules in Bargaining with Costly Persistent Recognition By Nicolas Quérou; Raphael Soubeyran
  7. Do Canadian Business Cycle Peaks Predict Federal Election Calls? By Marcel-Cristian Voia; J. Stephen Ferris
  8. On core solutions in economies with asymmetric information By Herves-Beloso, Carlos; Meo, Claudia; Moreno Garcia, Emma
  9. Coalition formation in the U.S. Supreme Court: 1969-2009 By Brams, Steven J.; Camilo, Gustavo; Franz, Alexandra D.
  10. On amending the sufficient conditions for Nash implementation By Wu, Haoyang
  11. A Human Relations Paradox By Hans Gersbach; Hans Haller
  12. Downs' ökonomische Theorie der Demokratie 2.0: Politische Präferenzen und Gleichheitsaversion By Sell, Friedrich L.; Stratmann, Felix
  13. Good versus Bad Political Institutions and Economic Welfare By Mamoon, Dawood

  1. By: Dan Usher (Queen's University)
    Abstract: People vote from self-interest or from a sense of duty. Voting from self-interest requires there to be some chance, however small, that one’s vote swings the outcome of the election from the political party one opposes to the political party one favours. This paper is a discussion of three models of how that chance might arise: the common sense model inferring the probability of a tied vote today from the distribution of outcomes in past elections, person-to-person randomization where each voter looks upon the political preferences of rest of the electorate as analogous to drawings from an urn with given proportions of red and blue balls, and nation-wide randomization where voters are lined up according to their valuations (positive or negative) of a win for one of the two competing parties, but where chance shifts the entire schedule of preferences up or down. Emphasis is on the third model about which this paper may have something new to say.
    Keywords: Pivotal voting, Duty to vote, Compulsory voting
    JEL: D72
    Date: 2011–04
  2. By: Dan Usher (Queen's University)
    Abstract: A duty to vote may be many things. It may be no more than an obligation to cast one’s ballot as self-interestedly or as altruistically as one pleases. It may a requirement to vote for the political party most likely to yield the highest social welfare. It may be a requirement to choose between competing parties in the interest of one’s social class or with recognition of the needs of the poor. It may include a requirement to inform oneself about the issues in an election. This paper begins with a critique of the argument denying any duty to vote because, as with participants in the market, there is no conflict between self-interest and public interest in the choice whether to vote or abstain. The core of the paper is a discussion of several interpretations of the duty to vote, and there is a brief review of pros and cons of compulsory voting.
    Keywords: Pivotal voting, Duty to vote, Compulsory voting
    JEL: D72
    Date: 2011–04
  3. By: Nicolas Quérou; Raphael Soubeyran
    Abstract: In this paper, we study the (symmetric) equilibria of a model of multilateral bar- gaining where players are heterogeneous regarding their time preferences, and make costly efforts at the beginning of the process in order to inuence their probabilities of being the proposer for all stages of the negotiation process. We analyse whether the optimality of the unanimity rule (as the voting rule minimizing the social cost resulting from the agents' willingness to buy inuence) characterised in Yildirim (2007) extends to the present situation. In the case of weakly heterogeneous agents, we show that k-majority rules may actually become strictly optimal. Then we provide numerical ex- amples that suggest that there are situations where each type of voting rule (unanimity and strict k-majority) may be socially optimal.
    Date: 2010–10
  4. By: Martorana, Marco (University of Catania, Department of Economics and Quantitative Methods); Mazza, Isidoro (University of Catania, Department of Economics and Quantitative Methods)
    Abstract: Dynamic models of learning and adaptation have provided realistic predictions in terms of voting behavior. This study aims at contributing to their scant empirical verification. We develop a learning algorithm based on bounded rationality estimating the pattern of learning process through a two-stage econometric model. The analysis links voting behavior to past choices and economic satisfaction derived from previous period election and state of the economy. This represents a novelty in the literature on voting that assumes given voter preferences. Results show that persistence is positively affected by the combination of income changes and past behavior and by union membership.
    Keywords: voting; bounded rationality; learning; political accountability
    JEL: C23 C25 D72
    Date: 2010–12–01
  5. By: Brams, Steven J.; Kilgour, D. Marc
    Abstract: We suggest a new approach to narrowing the field in elections, based on the deservingness of candidates to be contenders in a runoff, or to be declared one of several winners. Instead of specifying some minimum percentage (e.g., 50) that the leading candidate must surpass to avoid a runoff (usually between the top two candidates), we propose that the number of contenders depend on the distribution of votes among candidates. Divisor methods of apportionment proposed by Jefferson and Webster, among others, provide measures of deservingness, but they can prescribe a runoff even when one candidate receives more than 50 percent of the vote. We propose a new measure of deservingness, called the Next-Two rule, which compares the performance of candidates to the two that immediately follow them. It never prescribes a runoff when one candidate receives more than 50 percent of the vote. More generally, it identifies as contenders candidates who are bunched together near the top and, unlike the Jefferson and Webster methods, never declares that all candidates are contenders. We apply the Next-Two rule to several empirical examples, including one (elections to major league baseball’s Hall of Fame) in which more than one candidate can be elected.
    Keywords: voting; contenders in elections; runoffs; apportionment; fairness
    JEL: D63 D74
    Date: 2011–04
  6. By: Nicolas Quérou; Raphael Soubeyran
    Abstract: In this paper, we consider a model of multilateral bargaining where homogeneous agents may exert e¤ort before negotiations in order to inuence their chances to become the proposer. E¤ort levels have a permanent effect on the recognition process (persistent recognition). We prove two main results. First, all voting rules are equivalent (that is, they yield the same social cost) when recognition becomes persistent. Secondly, an equilibrium may fail to exist, because players may have more incentives to reduce their e¤ort level (in order to be included in winning coalitions) than to increase it (in order to increase their proposal power). Both results di¤er greatly from the case where recognition is transitory: Yildirim (2007) shows that una- nimity is the unique strictly optimal rule, and that an equilibrium always exists (under mild assumptions) in such a setting. Moreover, our second conclusion is quite di¤erent from the one obtained in most of the existing literature on bargaining (which assumes an exogenous recognition process), where it is generally considered that it is always in an agents best interest to have a proposal power as high as possible.
    Date: 2011–01
  7. By: Marcel-Cristian Voia (Department of Economics, Carleton University); J. Stephen Ferris (Department of Economics, Carleton University)
    Abstract: This paper examines the regularity that business cycle peaks and federal elections often arise together in parliamentary democracies as it applies to Canadian data over the post Confederation time period (1870 onwards). Breaking the simultaneity of these two events and properly identifying causality is possible we argue only if we address carefully the selection issue associated with observed events. Our results suggest that it is business cycle peaks that lead federal elections rather than the other way around. While such a finding reinforces the hypothesis of strategic election timing, the result is also insightful because it helps to explain why the predicted presence of a political business cycle is harder to find in parliamentary governments where the date of the next election is under the control of the governing political party than in democratic systems where governing durations and election dates are fixed.
    Keywords: election timing, political business cycles, selection models, election hazard
    JEL: D72 D78 C41
    Date: 2011–04–25
  8. By: Herves-Beloso, Carlos; Meo, Claudia; Moreno Garcia, Emma
    Abstract: In a scenario with a continuum of asymmetrically informed agents, we analyze how the initial information of a trader may be altered when she becomes a member of a coalition. In contrast to a perfect competition frame, we first show that neither arbitrarily small coalitions nor large coalitions are enough to block an allocation which is not in the core, due to the market failure produced by asymmetric information. However, under mild assumptions, we extend the characterizations of the core provided by Vind and Schmeidler (1972) to economies with asymmetrically informed traders. We then focus on information sharing rules based on the coalitions' size. Assuming the existence of coalitions to which the sharing rule associates an information finer than all the others, we show that the corresponding cores coincide with the one defined by this finest information. Finally, characterizations for the weak fine, the fine and the private core are obtained as particular cases of this equivalence theorem.
    Keywords: Coalitions; asymmetric information economies; information sharing; blocking mechanisms; core.
    JEL: D71 C02 D82 D51
    Date: 2011–03–10
  9. By: Brams, Steven J.; Camilo, Gustavo; Franz, Alexandra D.
    Abstract: We apply a fallback model of coalition formation to decisions of the U.S. Supreme Court, focusing on the seven natural courts, which had the same members for at least two terms, between 1969 and 2009. The predictions of majority coalitions on each of the courts are generally bourn out by the 5-4 decisions, whereas the predictions of the Martin-Quinn (2002) model, which assumes a single underlying dimension along which the justices can be ordered, are not. The present model also provides insight into the dynamic process by which subcoalitions build up into majority coalitions and, in addition, identifies "kingmakers” and “leaders” on the natural courts.
    Keywords: coalition formation; U.S. Supreme Court; Martin-Quinn scores; single-peakedness
    JEL: D71 C78 D63 D74 D02 C61
    Date: 2011–04
  10. By: Wu, Haoyang
    Abstract: Mechanism design, a reverse problem of game theory, is an important branch of economics. Nash implementation is the cornerstone of the theory of mechanism design. The well-known Maskin's theorem describes the sufficient conditions for Nash implementation when the number of agents are at least three. A recent work [H. Wu, Quantum mechanism helps agents combat ``bad'' social choice rules. International Journal of Quantum Information, 2010 (accepted) ] shows that when an additional condition is satisfied, the Maskin's theorem will no longer hold by using a quantum mechanism. Although quantum mechanisms are theoretically feasible, agents cannot benefit from them immediately due to the restriction of current experimental technologies. In this paper, we will go beyond the obstacle of how to realize quantum mechanisms, and propose an algorithmic mechanism which leads to the same results as quantum mechanisms do. Consequently, the sufficent conditions for Nash implementation are amended not only in the quantum world, but also in the real world.
    Keywords: Quantum computing; Mechanism design; Nash implementation.
    JEL: D71
    Date: 2011–04–05
  11. By: Hans Gersbach (ETH Zurich, Switzerland); Hans Haller (Virginia Polytechnic Institute)
    Abstract: We present a variant of a general equilibrium model with group formation to study how changes of non-consumptive benefits from group formation impact on the well-being of group members. We identify a human relations paradox: Positive externalities increase, but none of the group members gains in equilibrium. Moreover, a member who experiences an increase of positive emotional benefits in a group may become worse off in equilibrium.
    Keywords: Group formation, competitive markets, human relation, exit
    JEL: D41 D50 D60
    Date: 2011–04
  12. By: Sell, Friedrich L.; Stratmann, Felix
    Abstract: Nach einem kurzen Rückblick auf das Downs-Modell diskutieren wir anhand empirischer Daten aus Deutschland dessen heutige Relevanz unter Berücksichtigung der aus der Fairness-Literatur bekannten Ungleichheitsaversion (UA). Dabei wird der Begriff der sozialen Präferenzen um das neue Konzept der Gleichheitsaversion (GA) erweitert. Dies ermöglicht es, für Deutschland einen Einblick in den Zusammenhang zwischen den tatsächlichen individuellen politischen Präferenzen, dem gewünschten Niveau an gesamtgesellschaftlicher Einkommensumverteilung und der Verteilung von UA und GA in den individuellen sozialen Präferenzen zu gewinnen. Die Erweiterungen am Downs-Modell zeigen, dass - neben möglichen negativen Wohlfahrtseffekten - wegen der Rolle von GA eine zu hohe geplante Umverteilung eine Partei insgesamt erheblich Stimmen kosten kann. -- In the first place, we sort of recapitulate the Downs-Model and discuss, based on recent empirical findings from Germany, its current relevance.We then extend the original model, taking into account not only the accepted concept of inequity aversion, but also the less known idea of equity aversion. This enables us to gain insight into the relationship between the 'true' individual political preferences, the desired level of income redistribution and the issue of equity aversion. Our extension shows for the case of Germany that - in addition to possible negative welfare effects - a high level of redistribution is in discordance with the median voter and will, most likely, cost decisive votes.
    Keywords: Downs-Modell,Demokratie,politische Präferenzen,Gleichheitsaversion,Downs-Model,democracy,political preferences,eyuity aversion
    JEL: B41 D72 D78
    Date: 2011
  13. By: Mamoon, Dawood
    Abstract: The paper finds that countries which practice democracy are less prone to unequal outcomes especially when it comes to wage inequality and income inequality whereas autocracy is associated with higher level of wage inequalities but its impact on income inequalities are insignificant. Though under good economic management, autocracies may redistribute incomes from the richest to the poorest, more generally an autocratic set up violates the median voter hypothesis. The results also show that political stability and voice and accountability are more sensitive to inequalities than democracy and autocracy which is to say that the countries which are politically stable and practice accountability also form more equal societies.
    Keywords: Institutions; Redistribution; Inequality
    JEL: C51 D63 B15
    Date: 2011–04–25

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