New Economics Papers
on Collective Decision-Making
Issue of 2011‒09‒16
twelve papers chosen by

  1. Voter Behavior and Seniority Advantage in Pork Barrel Politics By Rodet, Cortney S.
  2. Smooth Politicians and Paternalistic Voters: A Theory of Large Elections By Marco Faravelli; Randall Walsh
  3. Fact Finding Trips to Italy: An experimental investigation of voter incentives By Rodet, Cortney S.
  4. To vote or to abstain? An experimental study or first past the poste and PR elections By André Blais; Jean-Benoît Pilet; Karine Van Der Straeten; Jean-François Laslier; Maxime Heroux-Legault
  5. Policymakers’ Horizon and Trade Reforms By Paola Conconi; Giovanni Facchini; Maurizio Zanardi
  6. An Experimental Study of Alternative Campaign Finance Systems: Donations, Elections and Policy Choices By Hanming Fang; Dmitry A. Shapiro; Arthur Zillante
  7. Aligning With One's Own: Private Voting and Public Outcomes in Elections in Rural India By Raghbendra Jha; Hari K. Nagarajan; Kailash C. Pradhan
  8. The Political Economy of International Environmental Agreements: A Survey By Leo Wangler; JJuan-Carlos Altamirano-Cabrera; Hans-Peter Weikard
  9. Vote-Buying and Reciprocity By Frederico Finan; Laura A. Schechter
  10. Political Motivations and Electoral Competition: Equilibrium Analysis and Experimental Evidence By Michalis Drouvelis; Alejandro Saporiti; Nicolaas J. Vriend
  11. Some Inconvenient Truths About Climate Change Policy: The Distributional Impacts of Transportation Policies By Stephen P. Holland; Jonathan E. Hughes; Christopher R. Knittel; Nathan C. Parker
  12. A note on the Shapley value for characteristic functions on bipartitions By Sander Muns

  1. By: Rodet, Cortney S.
    Abstract: This paper uses experiments to explore electoral accountability in a legislative system that favors seniority. Voters face a trade-off between pork barrel transfers and policy representation. Term limits are tested as a mechanism to reduce the cost of searching for a legislator who better represents voters on policy, as well as reducing the resulting asymmetric distribution of income. Subjects’ preferences on abortion are used in an innovative means of capturing incumbents’ policy choices where subject legislators vote to determine whether a donation is allocated to either a pro-choice or pro-life foundation.
    Keywords: voting; legislature; term limits; experiments
    JEL: C92 D89 D72 C91 P16
    Date: 2011–04
  2. By: Marco Faravelli; Randall Walsh
    Abstract: We propose a new game theoretic approach to modeling large elections that overcomes the “paradox of voting” in a costly voting framework, without reliance on the assumption of ad hoc preferences for voting. The key innovation that we propose is the adoption of a “smooth” policy rule under which the degree to which parties favor their own interests is increasing in their margin of victory. In other words, mandates matter. We argue that this approach is an improvement over the existing literature as it is consistent with the empirical evidence. Incorporating this policy rule into a costly voting model with paternalistic voters yields a parsimonious model with attractive properties. Specifically, the model predicts that when the size of the electorate grows without bound, limiting turnout is strictly positive both in terms of numbers and proportions. Further, the model preserves the typical comparative statics predictions that have been identified in the extant costly voting models such as the underdog effect and the competition effect. Finally, under the case of selfish agents, we are able to extend Palfrey and Rosenthal’s (1985) zero turnout result to a general class of smooth policy rules. Thus, this new approach reconciles the predictions of standard costly voting, both in terms of positive turnout and comparative statics predictions with the assumption of a large electorate environment.
    JEL: D72 H0
    Date: 2011–09
  3. By: Rodet, Cortney S.
    Abstract: This paper addresses the interaction of voter information and seniority on electoral accountability. We test whether information leads voters to be less tolerant of moral hazard in a legislative system favoring seniority. A simple game theoretic model is used to predict outcomes in a pork-barrel experiment where subjects act as legislators and voters. Senior legislators have an advantage in providing transfers which presents the opportunity to shirk where legislators can enrich themselves at the expense of voters. Voter information about incumbent behavior is varied across experimental treatments. We find that accountability increases when voters can compare their own legislator’s behavior to the behavior of others. Despite the fact that voters succumb to the incentives of seniority, information is effective in deterring legislator shirking.
    Keywords: voting; experiments; information; principal-agent problem
    JEL: C92 D89 D72 C91 P16
    Date: 2011–09
  4. By: André Blais (UdeM - Université de Montréal - Université de Montréal); Jean-Benoît Pilet (Université Libre de Bruxelles - Département de Science Politique); Karine Van Der Straeten (CNRS, Toulouse School of Economics - [-]); Jean-François Laslier (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Maxime Heroux-Legault (Université de Montréal - [-])
    Abstract: We examine through an experimental design how rational and non-rational considerations affect the decision to vote or to abstain in First Past the Post and PR elections. We show that in both types of elections, but particularly so under PR, a majority of subjects do not make the "right" decision, that is, they do not choose the option that is the most beneficial to them, given. We also demonstrate that a social norm such as sense of civic duty plays a bigger role, even in the lab, and particularly so in PR elections. We suggest that civic duty has a greater impact under PR because this electoral system has a more complicated formula, making it more difficult for voters to realize that their vote is unlikely to substantially affect the outcome of the election.
    Keywords: Experiments, Voting, First Past the Post, Proportional Representation, Civic Duty
    Date: 2011–08–24
  5. By: Paola Conconi (Université Libre de Bruxelles (ECARES) and CEPR); Giovanni Facchini (Erasmus University, University of Milan, Centro Studi Luca d\'Agliano, CEPR and CES-Ifo); Maurizio Zanardi (Université Libre de Bruxelles (ECARES))
    Abstract: Does policymakers\' horizon affect their willingness to support economic reforms? Voting in the U.S. Congress provides an ideal setting to address this question. Differences between the House and Senate, in which members serve two-year and six-year mandates respectively, allow to examine the role of term length; the staggered structure of the Senate allows to compare the behavior of different \"generations\" of senators and study the impact of election proximity. Considering all major trade liberalization reforms undertaken by the U.S. since the early 1970\'s, we find that Senate members are more likely to support them than House members. However, inter-cameral differences disappear for third-generation senators, who face re-election at the same time as House members. Considering Senate votes alone, we find that the last generation is more protectionist than the previous two and this result holds both when comparing different senators voting on the same bill, as well as individual senators voting on different bills. Inter-generational differences disappear instead for senators who hold safe seats or have announced their retirement, indicating that the protectionist effect of election proximity is driven by legislators\' fear of losing office.
    Keywords: Term Length, Election Proximity, Trade Reforms
    JEL: D72 F10
    Date: 2011–09–06
  6. By: Hanming Fang; Dmitry A. Shapiro; Arthur Zillante
    Abstract: We experimentally study the effect of alternative campaign finance systems – as characterized by different information structure about donors – on donations, election outcomes, political candidates' policy choices, and welfare. Three alternative campaign finance systems are considered: a full anonymity (FA) system in which neither the politicians nor the voters are informed about the donors' ideal policies or levels of donations; a partial anonymity (PA) system in which only the politicians, but not the voters, are informed about the donors' ideal policies and donations; and finally a no anonymity (NA) system in which both the politicians and the voters are informed about the donors' ideal policies and donations. We find that donors contribute less in the FA system than in the PA and NA system, and candidates are less likely to deviate from their ideal policies under FA than under the PA and NA systems. The effect of donations on the candidate's policy deviations differs in FA from that in PA and NA. Specifically, in the FA system larger donations lead to smaller deviations from the candidate's ideal policy; but in the NA and PA systems, larger donations lead to larger deviations. As a result we observe that the donations lead to a centrist bias in the candidate's policy choices, i.e., donations are more likely to make extreme candidate move to the center than to make centrist candidate move to the right. This centrist bias is present more robustly in FA treatments. Finally, we find that donors greatly benefit from the possibility of donations regardless of the finance system. Voter welfare remains virtually unchanged under the PA and NA systems, especially when there is competition among the donors. Our findings provide the first experimental evidence supportive of Ayres and Ackerman's (2002) campaign finance reform proposal.
    JEL: D72
    Date: 2011–09
  7. By: Raghbendra Jha; Hari K. Nagarajan; Kailash C. Pradhan
    Abstract: This paper has the objective of showing that identity based voting will lead to improvements in household welfare through increased access to welfare programs. Using newly available data from rural India, we establish that identity based voting will lead to enhanced participation in welfare programs and increased consumption growth. We also show that consumption growth is retarded if households do not engage in identity based voting. Using 3 stage least squares, we are able to show that identity based voting results from the externalities derived from membership in social and information networks, and such voting by enhancing participation in welfare programs leads to significant increases in household consumption growth.
    Keywords: Identity Based Voting, Panchayats, Decentralization, Devolution
    JEL: D7 D72 D73
    Date: 2011
  8. By: Leo Wangler (School of Economics and Business Administration, Friedrich-Schiller-University Jena); JJuan-Carlos Altamirano-Cabrera (Universidad Autonoma Metropolitana-Azcapotzalco, Department of Economics, Growth and Environment Group, Mexico City, Mexico); Hans-Peter Weikard (Environmental Economics and Natural Resources Group, Wageningen University, The Netherlands.)
    Abstract: This paper surveys the recent literature on the political economy of the formation of international environmental agreements. The survey covers theoretical modelling approaches and empirical studies including experimental work. Central to our survey is the question how the political process impacts different stages of agreement formation and stability. Relevant are the rules defined during pre-negotiations that govern negotiations, ratification and implementation. Strategic delegation and lobbying are directly relevant during the negotiation and ratification phases. Implementation, the choice of policy instruments at the national level, will also be impacted by lobbying and indirectly influence negotiations.
    Keywords: international environmental agreements, coalition formation, coalition stability, environmental policy-making, strategic delegation, interest groups, free-rider incentives, determinants of international environmental cooperation, public goods experiments
    JEL: D72 D62 C72 H41
    Date: 2011–09–05
  9. By: Frederico Finan; Laura A. Schechter
    Abstract: While vote-buying is common, little is known about how politicians determine who to target. We argue that vote-buying can be sustained by an internalized norm of reciprocity. Receiving money engenders feelings of obligation. Combining survey data on vote-buying with an experiment-based measure of reciprocity, we show that politicians target reciprocal individuals. Overall, our findings highlight the importance of social preferences in determining political behavior.
    JEL: H23 H41 O1
    Date: 2011–09
  10. By: Michalis Drouvelis; Alejandro Saporiti; Nicolaas J. Vriend
    Date: 2011
  11. By: Stephen P. Holland; Jonathan E. Hughes; Christopher R. Knittel; Nathan C. Parker
    Abstract: Instead of efficiently pricing greenhouse gases, policy makers have favored measures that implicitly or explicitly subsidize low carbon fuels. We simulate a transportation-sector cap & trade program (CAT) and three policies currently in use: ethanol subsidies, a renewable fuel standard (RFS), and a low carbon fuel standard (LCFS). Our simulations confirm that the alternatives to CAT are quite costly–2.5 to 4 times more expensive. We provide evidence that the persistence of these alternatives in spite of their higher costs lies in the political economy of carbon policy. The alternatives to CAT exhibit a feature that make them amenable to adoption–a right skewed distribution of gains and losses where many counties have small losses, but a smaller share of counties gain considerably–as much as $6,800 per capita, per year. We correlate our estimates of gains from CAT and the RFS with Congressional voting on the Waxman-Markey cap & trade bill, H.R. 2454. Because Waxman-Markey (WM) would weaken the RFS, House members likely viewed the two policies as competitors. Conditional on a district's CAT gains, increases in a district's RFS gains are associated with decreases in the likelihood of voting for WM. Furthermore, we show that campaign contributions are correlated with a district's gains under each policy and that these contributions are correlated with a Member's vote on WM.
    JEL: H2 H3 K0 K2 L5 L7 L9
    Date: 2011–09
  12. By: Sander Muns
    Abstract: <p>The Shapley value is a well-known allocation concept in cooperative game theory. It assigns to each player a part of the worth generated by the coalition of all players. The Shapley value is fair in the sense that it satisfies several desirable properties and axioms.</p><p>We consider a cooperative game with a bipartition that indicates which players are participating. The paper provides a simple analytical solution for the Shapley value when the worth of a coalition only depends on the number of participating coalition players. The computational complexity is only linear in the number of players, which contrasts with the usual exponential increase. This efficient result remains true when we introduce (i) randomization of the bipartition, and (ii) randomly draw an appropriate characteristic/worth function. We illustrate our result with an example that is related to the problem of allocating systemic risk among banks.</p>
    JEL: C71
    Date: 2011–08

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