New Economics Papers
on Collective Decision-Making
Issue of 2012‒05‒22
fifteen papers chosen by

  1. Competitive Equilibrium in Markets for Votes By Alessandra Casella; Aniol Llorente-Saguer; Thomas R. Palfrey
  2. E-Lections: Voting Behavior and the Internet By Falck, Oliver; Gold, Robert; Heblich, Stephan
  3. Schooling and Voter Turnout: Is there an American Exception? By Chevalier, Arnaud; Doyle, Orla
  4. Altruism and Voting: A Large-Turnout Result That Does not Rely on Civic Duty or Cooperative Behavior By Özgür Evren
  5. Incumbent Effects and Partisan Alignment in Local Elections: a Regression Discontinuity Analysis Using Italian Data By Bracco, Emanuele; Redoano, Michela; Porcelli, Francesco
  6. Immigration and election outcomes: Evidence from city districts in Hamburg By Otto, Alkis Henri; Steinhardt, Max Friedrich
  7. Incumbent-Quality Advantage and Counterfactual Electoral Stagnation in the U.S. Senate By Ivan Pastine; Tuvana Pastine; Paul Redmond
  8. Strategic Budgeteering and Debt Allocation By Troeger, Vera; Schneider, Christina J.
  9. Contests with Incumbency Advantages: An Experiment Investigation of the Effect of Limits on Spending Behavior and Outcome By HHironori Otsubo
  10. Toward a more general approach to political stability in comparative political systems By Apolte, Thomas
  11. Bargaining over an Endogenous Agenda By Vincent Anesi; Daniel J. Seidmann
  12. Lobbying as a Guard against Extremism By Zudenkova, Galina
  13. Inefficient predation, information, and contagious institutional change By Dorsch, Michael; Maarek, Paul
  14. Participation Games and international environmental agreements: a nonparametric model By Karp, Larry; Simon, Leo
  15. Trustworthy by Convention By M. Bigoni; S. Bortolotti; M. Casari; D. Gambetta

  1. By: Alessandra Casella (Columbia University, NBER and CEPR); Aniol Llorente-Saguer (Max Planck Institute for Research on Collective Goods, Bonn); Thomas R. Palfrey (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: We develop a competitive equilibrium theory of a market for votes. Before voting on a binary issue, individuals may buy and sell their votes with each other. We define the concept of ex ante vote-trading equilibrium, and show by construction that an equilibrium exists. The equilibriumwe characterize always results in dictatorship if there is any trade, and the market for votes generates welfare losses, relative to simple majority voting, if the committee is large enough or the distribution of values not very skewed. We test the theoretical implications by implementing a competitive vote market in the laboratory using a continuous open-book multi-unit double auction.
    Keywords: Experiments, voting, Markets, Vote Trading, Competitive Equilibrium
    JEL: C92 C72 D70 P16
    Date: 2012–02
  2. By: Falck, Oliver (Ifo Institute for Economic Research); Gold, Robert (Max Planck Institute for Economics); Heblich, Stephan (University of Stirling)
    Abstract: This paper analyses the effect of information disseminated by the Internet on voting behavior. We address endogeneity in Internet availability by exploiting regional and technological peculiarities of the preexisting voice telephony network that hinder the roll-out of fixed-line broadband infrastructure for high-speed Internet. We find small negative effects of Internet availability on voter turnout, and no evidence that the Internet systematically benefits single parties. Robustness tests including placebo estimations from the pre-Internet era confirm our results. We relate differences in the Internet effect between national and local elections to a crowding out of national but not local newspapers.
    Keywords: elections, political economy, instrumental variables, mass media, internet
    JEL: D72 C50 L86
    Date: 2012–05
  3. By: Chevalier, Arnaud (Royal Holloway, University of London); Doyle, Orla (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 reveal 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. mediate 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: 2012–05
  4. By: Özgür Evren (New Economic School)
    Abstract: I propose a game-theoretic model of costly voting that predicts signi…cant turnout rates even when the electorate is arbitrarily large. The model has two key features that jointly drive the result: (i) some agents are altruistic (or ethical), (ii) among the agents who prefer any given candidate, the fraction of altruistic agents is uncertain. When deciding whether to vote or not, an altruistic agent compares her private voting cost with the expected contribution of her vote to the welfare of the society. Under suitable homogeneity assumptions, the asymptotic predictions of my model coincide with those of Feddersen and Sandroni (2006a) up to potential differences between the respective parameters that measure the importance of the election. I demonstrate with an example that these homogeneity assumptions are not necessary for qualitative predictions of my model. I also show that when the fractions of altruistic agents are known, turnout rates will typically be close to zero in a large election, despite the presence of altruism.
    Keywords: Altruism; Utilitarianism; Voting; Turnout; Pivotal Voter
    JEL: D64 D72
    Date: 2012–04
  5. By: Bracco, Emanuele (University of Lancaster); Redoano, Michela (University of Warwick); Porcelli, Francesco (University of Warwick)
    Abstract: This paper provides a simple model to explain effect of political alignment between different tiers of government on policy choices and election outcomes. We derive precise predictions that, as long as voters attribute most of the credit for providing public goods to the local government: (i) aligned municipalities receive more grants, set lower taxes and provide more public goods, (ii) that the probability that the local incumbent is re-elected is higher in aligned municipalities compared to not aligned ones. Our empirical strategy to identify the alignment effects is built upon the fact that being or not aligned changes discontinuously at 50% of the vote share of local parties. This allows us to use sharp regression discontinuity design. Our theoretical predictions are largely con…rmed using a new dataset on Italian public finance and electoral data at the central and local level.
    Keywords: Fiscal Federalism, Political Competition, Accountability.
    Date: 2012
  6. By: Otto, Alkis Henri; Steinhardt, Max Friedrich
    Abstract: This paper provides new evidence on the effect of immigration on election outcomes. Our analysis makes use of data on city districts in Hamburg, Germany, during a period of substantial inflows of immigrants and asylum seekers. We find significant and robust effects for changes in foreigner shares on the electoral success of parties that built up a distinctive reputation in immigration politics. In particular, our fixed-effects estimates indicate a positive effect for xenophobic, extreme right-wing parties and an adverse effect for the Green party that actively campaigned for liberal immigration policies and minority rights. Overall, our results support the hypothesis that changes in local compositional amenities shape individual attitudes towards immigration. --
    Keywords: immigration,elections,xenophobia
    JEL: D72 J15 R23
    Date: 2012
  7. By: Ivan Pastine (University College Dublin); Tuvana Pastine (NUI Maynooth); Paul Redmond (NUI Maynooth)
    Abstract: This paper presents a simple statistical exercise to provide a benchmark for the degree of electoral stagnation without direct officeholder benefits or challenger scare-off effects. Here electoral stagnation arises solely due to incumbent-quality advantage where the higher quality candidate wins the election. The simulation is calibrated using the observed drop-out rates in the U.S. Senate. From 1946 to 2010, the observed incumbent reelection rate is 81.7 percent; the benchmark with incumbent-quality advantage alone is able to generate a reelection rate of 78.2 percent. In the sub-sample from 1946 to 1978, the reelection rate from the simulation is almost identical to the observed. The rates diverge in the second part of the sub-sample from 1980 to 2010, possibly indicating an increase in electoral stagnation due to incumbency advantage arising for reasons other than incumbent-quality advantage.
    Keywords: Incumbent-Quality Advantage, Counterfactual Electoral Stagnation
    Date: 2012–05–10
  8. By: Troeger, Vera (University of Warwick); Schneider, Christina J. (University of California, San Diego)
    Abstract: This paper analyzes how opportunistic governments choose between alternative fiscal policies in order to increases their chances of re-election. To increase the provision of public goods shortly before elections – and thus, to generate a fiscal political business cycles – governments may either increase deficits or redistribute governmental resources from longterm efficient sources to short-term efficient public programs. We argue that incumbents who face highly competed elections principally have an incentive to spend more on public goods even though these investments are not efficient in the long term. In principal, they would do so by increasing the deficits (with re-balancing the budget after the election). However, our model demonstrates that incumbents would even electioneer at the cost of long-term investments if the extent of fiscal transparency does not allow them to finance the provision of public goods with higher deficits. In other words, if elections are close and voters may observe the governmental deficit, then governments tend to increase the provision of public goods – and consequently, their electoral prospects – by a redistribution of budget resources from long-term efficient investment to a short-term provision of public goods. We test the predictions with new data on the composition of government consumption for 17 OECD countries over 35 years. The preliminary findings suggest that governments indeed reshuffle resources from long-term efficient investment to short-term public goods before elections especially if elections are contested.
    Date: 2012
  9. By: HHironori Otsubo (Faculty of Economics, Soka University, Tokyo)
    Abstract: This paper experimentally investigates the effect of limits on campaign spending and outcome in an electoral contest where two candidates, an incumbent and a challenger, compete for office in terms of the amount of campaign expenditure. The candidates are asymmetric only in that the incumbent wins the contest in case of a tie. Theory predicts that in the presence of such asymmetry spending limits put the challenger at a disadvantage and tightening the limits leads to further entrenchment of the incumbent. The experimental results confirmed the theoretical predictions regarding the effect of limits on campaign spending and outcome but yielded partial support to other predictions.
    Keywords: Contest, All-pay auction, Spending limit, Incumbency advantage, Experiment
    JEL: C72 C92 D72
    Date: 2012–05–08
  10. By: Apolte, Thomas
    Abstract: This paper provides a general framework for analyzing political (in)stability in comparative political systems. It distinguishes different subgroups of a society, some of which have a potential for pursuing a redistribution of wealth in its broadest sense via constitutional or non-constitutional government overturns. Political instability implies a cycle of overturns and redistributions with no stable equilibrium. It will be shown that individual incentives for participating in overturn attempts hinge not upon specific distributions of wealth but are rather dependent on the respective structure and credibility of promises and threats within and across the different subgroups of the society. What is more, without credible commitments of the incumbent governments to a carrot-and-stick policy there will be the danger of endless over-turn and redistribution cycles, leading to failed states. For much the same reason, democratic constitutions contain effective measures against redistribution cycles. Stability within non-democracies, by contrast, can be explained by the fact that commitments among potential re-bels cannot be backed by formal institutions, whereas incumbent governments can use their legal surrounding for developing institutions that, in turn, help them to embed potentially threatening societal groups into a system of carrot and stick. --
    Keywords: political economy,revolutions,credible commitments
    JEL: D72 D74 O15 P16
    Date: 2012
  11. By: Vincent Anesi (University of Nottingham); Daniel J. Seidmann (University of Nottingham)
    Abstract: We present a model of bargaining in which a committee searches over the policy space, successively amending the default by voting over proposals. Bargaining ends when proposers are unable or unwilling to amend the existing default, which is then implemented. We characterize the policies which can be implemented from any initial default in a pure strategy stationary Markov perfect equilibrium for an interesting class of environments including multi-dimensional and infinite policy spaces. Minimumwinning coalitions may not form, and the set of equilibrium policies may be unaffected by a change in the set of proposers. The set of stable policies (which are implemented, once reached as default) forms a weakly stable set; and conversely, any weakly stable set is supported by some equilibrium. If the policy space is well ordered then the committee implements the ideal policy of the last proposer in a subset of a weakly stable set. However, this result does not generalize to other cases, allowing us to explore the effects of protocol manipulation. Variations in the quota and in the number of proposers may have surprising effects on the set of stable decisions. We also show that equilibria of our model are contemporaneous perfect ?-equilibria of a related model of repeated implementation with an evolving default; and that stable decisions in semi-Markovian equilibria form the largest consistent set.
    Keywords: bargaining, evolving default, stable set
    JEL: C78 D71 D72
    Date: 2011–09
  12. By: Zudenkova, Galina
    Abstract: This paper analyzes endogenous lobbying over a unidimensional policy issue. Individuals differ in policy preferences and decide either to join one of two opposite interest lobbies or not to take part in lobbying activities. Once formed, lobbies make contributions to the incumbent government in exchange for a policy favor as in a common-agency model. An equilibrium occurs only if no lobby member would prefer his lobby to cease to exist. I show the existence of an equilibrium with two organized lobbies. Individuals with more extreme preferences are more likely to join lobbying activities. Therefore, the lobbyists are rather extremists than moderates. However, the competition between those extreme lobbies results in a more moderate policy outcome relative to that initially preferred by the pro- or anti-policy government. Lobbies therefore guard against extremism, while acting as moderators of the government's preferences. JEL classification: D72. Keywords: common agency; endogenous lobbying; extremism.
    Keywords: Lobbisme, Grups de pressió, 32 - Política,
    Date: 2012
  13. By: Dorsch, Michael; Maarek, Paul
    Abstract: This paper presents an agency theory of revolutionary political transitions from autocracy to democracy. We model authoritarian economic policy as the equilibrium outcome of a repeated game between an elite ruling class and a disenfranchised working class, in which workers have imperfect information about the elite's policy choice and the economy's productive capacity. We characterize the conditions under which, in equilibrium, (i) the elite will set inefficient economic institutions under the threat of revolution, (ii) information shocks can catalyze democratic revolutions that may be contagious among similar countries, and (iii) democracy can be consolidated following a political transition.
    Keywords: Political transition; Revolution; Asymmetric information; Contagion; Democratic consolidation; Arab Spring
    JEL: D71 D74 P48
    Date: 2012–04
  14. By: Karp, Larry; Simon, Leo
    Abstract: We examine the size of stable coalitions in a participation game that has been used to model international environmental agreements, cartel formation, R&D spillovers, and monetary policy. The literature to date has relied on parametric examples; based onthese examples, a consensus has emerged that in this kind of game, the equilibrium coalition size is small, except possibly when the potential benefits of cooperation are also small. In this paper, we develop a non-parametric approach to the problem, and demonstrate that the conventional wisdom is not robust. In a general setting, we identify conditions under which the equilibrium coalition size can be large even when potential gains are large. Contrary to previously examined leading special cases, we show that reductions in marginal abatementcosts in an international environmental game can increase equilibrium membership, and we provide a measure of the smallest reduction in costs needed to support a coalition of arbitrary size.
    Keywords: Natural Resources and Conservation, Social Sciences, stable coalitions, participation games, International Environmental Agreement, climate agreement, trans-boundary pollution, investment spillovers
    Date: 2012–02–13
  15. By: M. Bigoni; S. Bortolotti; M. Casari; D. Gambetta
    Abstract: Social life offers innumerable instances in which trust relations involve multiple agents. In an experiment, we study a new setting called Collective Trust Game where there are multiple trustees, who may have an incentive to coordinate their actions. Trustworthiness has also a strategic motivation, and the trusters' decision depends upon their beliefs about the predominant convention with regard to trustworthiness. In this respect, the Collective Trust Games offers a richer pattern of behavior than dyadic games. We report that the levels of trustworthiness are almost thirty percentage points higher when strategic motivations are present rather than not. Higher levels of trustworthiness also led to higher levels of trust. Moreover, strategic motives appear as a major drive for trustees, comparable in size to positive reciprocity, and more important than concerns for equality.
    JEL: C92 C72 D03
    Date: 2012–05

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