New Economics Papers
on Collective Decision-Making
Issue of 2011‒09‒05
nine papers chosen by

  1. A Passion for Democracy By Elena Panova
  2. Political Motivations and Electoral Competition: Equilibrium Analysis and Experimental Evidence By Michalis Drouvelis; Alejandro Saporiti; Nicolaas J. Vriend
  3. Demeny Voting and Its Impact, NIRA Round-Table March 10, 2011 By Demeny, Paul; Aoki, Reiko; Makihara, Izuru; Ushio, Jiro; Yanagawa, Noriyuki
  4. Electoral Competition as a Determinant of Fiscal Decentralization By Mario Jametti; Marcelin Joanis
  5. Fiscal Union Consensus Design under the Risk of Autarky By Luque, Jaime; Morelli, Massimo; Tavares, José
  6. Robust Mechanism Design: An Introduction By Dirk Bergemann; Stephen Morris
  7. Anarchism and Austrian economics By Boettke, Peter
  8. Payoff Uncertainty, Bargaining Power, and the Strategic Sequencing of Bilateral Negotiations By Silvana Krasteva; Huseyin Yildirim
  9. Mechanism Design via Consensus Estimates, Cross Checking, and Profit Extraction By Bach Q. Ha; Jason D. Hartline

  1. By: Elena Panova
    Abstract: Theories of voter turnout assume that an active voter receives a warm glow from doing a good deed to like-minded compatriots. What tells him that he is doing them a good deed by voting for this or that candidate or policy? Their own votes are naturally available feedback. We propose a dynamic model of voting with asymmetric information in which being among the majority provides a voter with a positive feedback on his voting decision, increasing his self confidence, hence, his warm glow from voting in the future. The voters who cannot tell which policy is superior, try to pool with a majority (so as to get involved in the democratic process). They vote much according to the available public information, however, without herding. We find these effects in the unique equilibrium of our voting game. <P>Les théories de vote supposent qu'un électeur reçoit de la satisfaction ou du « warm glow » quand il vote. Le « warm glow » est créé par la confiance d'une bonne action envers ses compatriotes. Qu'est-ce qui fait croire à un électeur qu'il fait une bonne action envers ses compatriotes en votant pour telle ou telle plateforme politique? Leurs propres votes sont un signal naturellement disponible. Nous proposons un modèle dynamique de vote avec des informations asymétriques dans lequel la majorité fournit un signal positif sur le choix de vote. Ce signal augmente la confiance de l’électeur en ses choix de vote, et par conséquent, son « warm glow » de votes prochains. Les électeurs qui ne peuvent pas distinguer quelle plateforme politique est supérieure essaient d'imiter le vote de majorité afin de bâtir la confiance en ses choix de vote et s'impliquer dans le processus démocratique. Ils votent surtout selon les informations publiques disponibles, cependant, sans « herding ». Nous trouvons ces effets dans l'équilibre unique de notre jeu de vote.
    Keywords: expressive voting, habitual voting, complementarities in voting, self-signaling, public information and the vote, status quo bias., vote expressif, vote habituel, complémentarités au vote, self-signaling, information publique et vote, tendance au statu qo.
    JEL: D71 D72 D82 D83 P16
    Date: 2011–05–01
  2. By: Michalis Drouvelis (University of Birmingham); Alejandro Saporiti (University of Manchester); Nicolaas J. Vriend (Queen Mary, University of London)
    Abstract: We study both theoretically and experimentally the complete set of Nash equilibria of a classical one-dimensional, majority rule election game with two candidates, who might be interested in power as well as in ideology, but not necessarily in the same way. Apart from obtaining the well known median voter result and the two-sided policy differentiation outcome, the paper uncovers the existence of two new equilibrium configurations, called 'one-sided' and 'probabilistic' policy differentiation, respectively. Our analysis shows how these equilibrium configurations depend on the relative interests in power (resp., ideology) and the uncertainty about voters' preferences. The theoretical predictions are supported by the data collected from a series of laboratory experiments, as we observe convergence to the Nash equilibrium values at the aggregate as well as the individual levels in all treatments, and the comparative statics effects across treatments are as predicted by the theory.
    Keywords: Electoral competition, Power, Ideology, Uncertainty, Nash equilibrium, Experimental evidence
    JEL: C72 C90 D72
    Date: 2011–08
  3. By: Demeny, Paul; Aoki, Reiko; Makihara, Izuru; Ushio, Jiro; Yanagawa, Noriyuki
    Abstract: The birth rate in Japan remains lower than the target rate. Both the population size and composition by age mean an increase in the number of elderly people and a decrease in the number of young workers. - We should squarely address the essential problem inherent in the current voting system, that is, the problem that the interests of the next generation cannot be reflected in decision-making under the current system. - Demeny Voting, which aims to provide parents or prospective parents extra votes, is also expected to work to recover the birth rate. - We have not implemented measures to address the low birth rate issue as a soure of major threat to national strength. Demeny Voting will serve to trigger fundamental discussions on the low birth rate and inspire new policy ideas.
    Date: 2011–06
  4. By: Mario Jametti (Institute for Microeconomics and Public Economics (MecoP), University of Lugano; CESifo); Marcelin Joanis (University of Sherbrooke, GREDI, CIRANO)
    Abstract: Fiscal decentralization is high on the agenda in policy fora. This paper empirically investigates the underlying causes of fiscal decentralization, based on the predictions of a simple political economy model. We argue that the likeliness that a central government engages in devolution of powers depends in important ways on the political forces that it faces, the theory’s main insight being that the central government’s electoral strength should, all else being equal, decrease that government’s share of spending. Consistent with the model’s predictions, empirical results from a panel of democracies support the relevance of political factors as determinants of fiscal decentralization. The relationship between central government electoral strength and both expenditure and revenue centralization emerges as negative and non-linear.
    Keywords: Fiscal decentralization; Fiscal federalism; Vertical interactions; Partial De-centralization; Elections
    JEL: H77 D72 H11
    Date: 2011–08–26
  5. By: Luque, Jaime; Morelli, Massimo; Tavares, José
    Abstract: Inspired by the current debate over the future of the monetary union in Europe, this paper provides a simple model for the determination of the conditions of survival of the common good, which requires the creation of an effective fiscal union. We highlight the importance of institutional design and varying decision weights for the enlargement of the space for consensus. Our model deepens the discussion of economic risk and political risk in fiscal federalism, and highlights the related roles of country heterogeneity and institutional design in enlarging the scope for cross country fiscal agreements.
    Keywords: autarky; consensus; fiscal union; heterogeneous countries; uncertainty; voting weights
    JEL: D70 D78 E62 F15 H77
    Date: 2011–08
  6. By: Dirk Bergemann; Stephen Morris
    Date: 2011–08–19
  7. By: Boettke, Peter
    Abstract: In the 2011 Franz Cuhel Memorial Lecture, I argue that the study of endogenous rule formation in economic life (what I term the positive political economy of anarchism) should be studied in-depth and that the economic analysis of the Austrian school of economics provides many of the key analytical insights necessary for such study.
    Keywords: Rule formation; Enterprise of Law; Austrian Economics
    JEL: O17 B41 B53 P16
    Date: 2011
  8. By: Silvana Krasteva; Huseyin Yildirim
    Date: 2011–08–25
  9. By: Bach Q. Ha; Jason D. Hartline
    Abstract: There is only one technique for prior-free optimal mechanism design that generalizes beyond the structurally benevolent setting of digital goods. This technique uses random sampling to estimate the distribution of agent values and then employs the Bayesian optimal mechanism for this estimated distribution on the remaining players. Though quite general, even for digital goods, this random sampling auction has a complicated analysis and is known to be suboptimal. To overcome these issues we generalize the consensus technique from Goldberg and Hartline (2003) to structurally rich environments that include, e.g., single-minded combinatorial auctions. JEL Code: C18, C53, D89
    Keywords: calibration, prediction
    Date: 2011–08–24

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