New Economics Papers
on Collective Decision-Making
Issue of 2012‒04‒17
eight papers chosen by

  1. Optimal Districting with Endogenous Party Platforms By E Bracco
  2. SCHOOLING AND VOTER TURNOUT: Is there an American Exception? By Arnaud Chevalier; Orla Doyle
  3. Eliciting Information from a Committee By Andriy Zapechelnyuk
  4. A New Outside Option Value for Networks: The Kappa-Value – Measuring Distribution of Power of Political Agreements By Julia Belau
  5. Group Membership and Communication in Modified Dictator Games By Klemens Keldenich
  6. The politics of automatic stabilization mechanisms in public pension programs By Weaver, Kent
  7. Community Projects: An Experimental Analysis of a Fair Implementation Process By Simona Cicognani; Aanna D'Ambrosio; Werner Güth; Simone Pfuderer; Matteo Ploner
  8. A Robustly Efficient Auction By Kyungmin Kim; Antonio Penta

  1. By: E Bracco
    Abstract: This paper proposes a theory of socially optimal districting in a legislative-election model with endogenous party platforms. We generalize the model of Coate and Knight (2007), allowing parties to strategically condition their platforms on the districting. The socially optimal districting re ects the ideological leaning of the population, so that parties internalize voters' preferences in their policy platforms. The optimal seat-vote curve is unbiased when voters are risk-neutral, and -contrary to previous findings-biased against the largest partisan group when voters are risk-averse. The model is then calibrated by an econometric analysis of the elections of U.S. State legislators during the 1990s.
    Date: 2011
  2. By: Arnaud Chevalier (Royal Holloway, University of London, CEE & IZA); Orla Doyle (UCD Geary Institute & School of Economics, University College Dublin)
    Abstract: One of the most consistent findings in studies of electoral behaviour is that individuals with higher education have a greater propensity to vote. The nature of this relationship is much debated, with US studies generally finding evidence of a causal relationship, while European studies generally reporting no causal effect. To assess whether the US is an exception we rely on an international dataset incorporating 38 countries, the ISSP (International Social Survey Programme) from 1985 to 2010. Both instrumental variable and multi-level modelling approaches, reveals that the US is an outlier regarding the relationship between education and voter turnout. Moreover country-specific institutional and economic factors do not explain the heterogeneity in the relationship of interest. Alternatively, we show that disenfranchisement laws in the U.S. mediates the effect of education on voter turnout, such that the education gradient in voting is greater in U.S. States with the harshest disenfranchisement legislature. As such, the observed relationship between education and voting is partly driven by the effect of education on crime.
    Keywords: Voter turnout, Education, Disenfranchisement laws
    JEL: D72 I20 K42
    Date: 2012–04–10
  3. By: Andriy Zapechelnyuk (Queen Mary, University of London)
    Abstract: The paper addresses the mechanism design problem of eliciting truthful information from a committee of informed experts who collude in their information disclosure strategies. It is shown that under fairly general conditions full information disclosure is possible if and only if the induced outcome is Pareto undominated for the committee members.
    Keywords: Communication, Multidimensional mechanism design, Experts, Collusion, Axiomatic bargaining, Closed rule
    JEL: D82 C78 D72
    Date: 2012–04
  4. By: Julia Belau
    Abstract: In an economic or social situation where agents have to group in order to achieve common goals, how can we calculate the coalitional rents of the agents arising from the coalition formation? Once we have formalized the situation via a TU-game and a network describing the economic structure, we can apply different allocation rules to assign the coalitional rents to the agents. We specifically analyze situations where parties with a specific vote distribution in a parliament have to build agreements in order to reach some required quorum. In this situation, we want to measure the (relative) distribution of power. We analyze the allocation rules called Position value (Meessen (1988) and Borm et al. (1992)) and graph-chi-value (Casajus (2009)). Applying the generalized framework (Gómez et al. (2008)), a framework where coalitions are not established yet, we fi nd that the graph-chi-value does not differ for networks referring to the same coalition while the Position value takes into account the specific role of an agent within the network, i.e. the communication path. We define and characterize a new outside option sensitive value, the Kappa-value, which takes into account both outside options and the role of an agent within the network.
    Keywords: Cooperative games; graph-restricted games; networks; position value; outside options; minimal winning coalitions
    JEL: C71 D85 H10
    Date: 2012–04
  5. By: Klemens Keldenich
    Abstract: This paper presents a laboratory experiment to measure the effect of group membership on individual behavior in modified dictator games. The results suggest that this effect is influenced by the degree of group membership saliency. A within-subject design is employed: in stage 1, each subject decides individually; in stage 2, the subjects are divided into groups of three and one person is selected at random from each group to make the decision (the “hierarchical decision rule”). In stage 3, additional pre-play communication in the group is allowed before the decision and, in stage 4, the decisions are again made on an individual basis. Interestingly, the dictators behave more selfishly when group members are not allowed to communicate. However, if groups are allowed to communicate, decisions do not differ from individual choices. Chat content shows that groups are concerned with reaching a consensus, even though talk is “cheap” and only one group member will make the binding decision.
    Keywords: Group decision making; social comparison; leadership; communication
    JEL: C91 C92 D71
    Date: 2012–03
  6. By: Weaver, Kent
    Abstract: Demographic and fiscal pressures have increased pressures on governments in most wealthy countries to reduce the generosity of their public pension programs. Mechanisms that automatically adjust public pension levels to take account of factors such as increased life expectancy and slower economic growth are appealing to politicians because it saves them from having to take loss-imposing actions that are likely to incur political blame. This paper analyzes the financial and political potential of automatic stabilizing mechanisms (ASMs), beginning with a discussion of design issues and alternatives. This is followed by a discussion of potential adoption, implementation, and sustainability challenges for automatic stabilizing mechanisms and a review of experiences with stabilization mechanisms in three countries: Canada, Sweden and Germany. The paper argues that ASMs are vulnerable to erosion over time, especially when the losses that the ASM would impose are substantial, and when elections are impending. Preserving the integrity of ASMs is most likely where the parties that initially supported their adoption continue to be able to sustain cartel-like behavior with respect to pension policymaking. Overall, the analysis in this paper suggests that automatic stabilizing mechanisms are no panacea for the problems of countries facing serious long-term pension financing problems. --
    Date: 2011
  7. By: Simona Cicognani (School of Social Sciences, University of Trento, Italy); Aanna D'Ambrosio (School of Social Sciences, University of Trento, Italy); Werner Güth (Max Planck Institute of Economics, Strategic Interaction Group); Simone Pfuderer (School of Social Sciences, University of Trento, Italy); Matteo Ploner (Cognitive and Experimental Economics Laboratory, University of Trento, Italy)
    Abstract: We define and experimentally test a public provision mechanism that meets three basic ethical requirements and allows community members to influence, via monetary bids, which of several projects is implemented. For each project, participants are assigned personal values, which can be positive or negative. We provide either complete or only private information about others' personal values. This produces two distinct public provision games which are experimentally implemented and analysed for various projects. In spite of the complex experimental task, participants do not rely on truth-telling as an obvious and simple heuristic whose general acceptance would result in fair and efficient outcomes. Rather, they yield to strategic underbidding. Although underbidding is affected by projects' characteristics, the provision mechanism seems quite functional.
    Keywords: Public Provision, Procedural Fairness, Experiment
    JEL: C91 C72 D63
    Date: 2012–04–05
  8. By: Kyungmin Kim; Antonio Penta
    Abstract: We study the problem of efficient auction design in environments with interdependent values, under arbitrary common knowledge assumptions. We propose a simple mechanism and show that, under a rather mild condition, it "robustly" achieves efficiency. Our mechanism consists in a standard Vickrey auction, preceded by one round of communication, where agents report their private signals and receive transfers from the designer. We interpret the transfers as the cost for the designer to robustly achieve efficiency. We introduce a notion of robust informational size and show that the transfers are small if agents are informationally small in our sense. Furthermore, the transfers are decreasing in the amount of information available to the designer and in the strength of the common knowledge assumptions. In other words, the more robust the efficient implementation result, the higher the cost of achieving efficiency. We thus formalize the intuitive idea of a trade-off between robustness and efficient implementation and analyze the determinants of the "cost of robustness".
    Keywords: Cost of robustness; efficient auctions; informational size; interdependent values; robust mechanism design
    JEL: C72 D82
    Date: 2012

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