New Economics Papers
on Collective Decision-Making
Issue of 2012‒02‒08
six papers chosen by

  1. Legislative bargaining and the dynamics of public investment By Battaglini, Marco; Nunnari, Salvatore; Palfrey, Thomas
  2. Group Decision Making with Uncertain Outcomes: Unpacking Child-Parent Choices of High School Tracks By Pamela Giustinelli
  3. Replicator Dynamics and Evolutionary Stable Strategies in Heterogeneous Games. By Andre Barreira da Silva Rocha; Annick Laruelle; Peio Zuazo
  4. The prenucleolus for games with communication structures By Khmelnitskaya, Anna B.; Sudhölter, Peter
  5. On extensions of the core and the anticore of transferable utility games By Derks, Jean; Peters, Hans; Sudhölter, Peter
  6. Coping with Conflict:A Dynamic Decision Making Perspective By Kuperman, Ranan

  1. By: Battaglini, Marco; Nunnari, Salvatore; Palfrey, Thomas
    Abstract: We present a legislative bargaining model of the provision of a durable public good over an infinite horizion. In each period, there is a societal endowment which can either be invested in the public good or consumed. We characterize the optimal public policy, defined by the time path of investment and consumption. In each period, a legislature with presentatives of each of n districts bargain over the current period's endowment for investment in the public good and transfers to each district. We analyze the Markov perfect equilibrium under different voting q-rules where q is the number of yes votes required for passage. We show that the efficiency of the public policy is increasing in q because higher q leads to higher investment in the public good and less pork. We examine the theoretical equilibrium predictions by conducting a laboratory experiment with fiveperson committees that compares three alternative voting rules: unanimity (q=5); majority (q=3); and dictatorship (q=1). --
    Keywords: dynamic political economy,voting,public goods,bargaining,experiments
    JEL: D71 D72 C78 C92 H41 H54
    Date: 2011
  2. By: Pamela Giustinelli (University of Michigan)
    Abstract: Predicting group decisions with uncertain outcomes involves the empirically difficult task of disentangling individual decision makers' beliefs and preferences over outcomes' states from the group's decision rule. This paper addresses the problem within the context of a consequential family decision concerning the high school track of adolescent children in presence of curricular strati cation. The paper combines novel data on children's and parents' probabilistic beliefs, their stated choice preferences, and families' decision rules with standard data on actual choices to estimate a simple model of curriculum choice featuring both uncertainty and heterogeneous cooperative-type decisions. The model's estimates are used to quantify the impact on curriculum enrollment of policies affecting family members' expectations via awareness campaigns, publication of education statistics, and changes in curricular specialization and standards. The latter exercise reveals that identity of policy recipients--whether children, parents, or both--matters for enrollment response, and underlines the importance of incorporating information on decision makers' beliefs and decision rules when evaluating policies.
    Keywords: Choice under Uncertainty, Multilateral Choice, Heterogeneous Decision Rules, Curricular Tracking, Curriculum Choice, Child-Parent Decision Making, Subjective Probabilities, Stated and Revealed Preferences, Choice-Based Sampling
    JEL: C25 C35 C50 C71 C81 C83 D19 D81 D84 I29 J24
    Date: 2011–07
  3. By: Andre Barreira da Silva Rocha (Departament of Economics, University of Leicester); Annick Laruelle (; Peio Zuazo (Departamento de Fundamentos del Análisis Económico I UPV/EHU)
    Abstract: We generalise and extend the work of Iñarra and Laruelle (2011) by studying two person symmetric evolutionary games with two strategies, a heterogenous population with two possible types of individuals and incomplete information. Comparing such games with their classic homogeneous version vith complete information found in the literature, we show that for the class of anti-coordination games the only evolutionarily stable strategy vanishes. Instead, we find infinite neutrally stable strategies. We also model the evolutionary process using two different replicator dynamics setups, each with a different inheritance rule, and we show that both lead to the same results with respect to stability.
    Date: 2012–01–24
  4. By: Khmelnitskaya, Anna B. (Faculty of Applied Mathematics); Sudhölter, Peter (Department of Business and Economics)
    Abstract: t is well-known that the prenucleolus on the class of TU games is characterized by singlevaluedness, covariance under strategic equivalence, anonymity, and the reduced game property. We show that the prenucleolus on the class of TU games restricted to the connected coalitions with respect to communication structures may be characterized by the same axioms and a stronger version of independence of non-connected coalitions requiring that the solution does not depend on the worth of any non-connected coalition. Similarly as in the classical case, it turns out that each of the five axioms is logically independent of the remaining axioms and that an infinite universe of potential players is necessary. Moreover, a suitable definition and characterization of a prekernel for games with communication structures is presented.
    Keywords: TU game; solution concept; communication and conference structure; nucleolus
    JEL: C71
    Date: 2011–12–10
  5. By: Derks, Jean (Department of Knowledge Engineering); Peters, Hans (Department of Quantitative Economics); Sudhölter, Peter (Department of Business and Economics)
    Abstract: We consider several related set extensions of the core and the anticore of games with transferable utility. An efficient allocation is undominated if it cannot be improved, in a specific way, by sidepayments changing the allocation or the game. The set of all such allocations is called the undominated set, and we show that it consists of finitely many polytopes with a core-like structure. One of these polytopes is the L1-center, consisting of all efficient allocations that minimize the sum of the absolute values of the excesses. The excess Pareto optimal set contains the allocations that are Pareto optimal in the set obtained by ordering the sums of the absolute values of the excesses of coalitions and the absolute values of the excesses of their complements. The L1-center is contained in the excess Pareto optimal set, which in turn is contained in the undominated set. For three-person games all these sets coincide. These three sets also coincide with the core for balanced games and with the anticore for antibalanced games. We study properties of these sets and provide characterizations in terms of balanced collections of coalitions. We also propose a single-valued selection from the excess Pareto optimal set, the min-prenucleolus, which is defined as the prenucleolus of the minimum of a game and its dual.
    Keywords: Transferable utility game; core; anticore; core extension; min-prenucleolus
    JEL: C71
    Date: 2012–01–06
  6. By: Kuperman, Ranan (University of Haifa)
    Abstract: This research investigates how students of political science playing the role of a state leader cope with structural and dynamic complexities of international conflict. This was studied with the aid of an interactive microworld simulator of a fishing dispute, which was designed according to principles of system dynamics. The research question was what type of decision-making patterns characterized subjects who adapted successfully to the challenges posed by the opponent in comparison to subjects who pursued policies that produced suboptimal payoffs. The results of this research suggest two reasons for poor adaptation. First, rather than exploring the consequences of all possible policy options, most subjects had very strong pre-existing policy preferences and were reluctant to abandon them in favor of alternative policies. Second, many subjects did not adequately analyze the statistical data that were required in order to estimate the payoffs. A third possibility that was explored but not sufficiently supported is that decisions were based on satisficing rather than comparing utilities associated with alternative policies.
    Keywords: policy preferences; decision making; international conflicts
    JEL: D74
    Date: 2011–12–01

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