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on Collective Decision-Making |
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Issue of 2012‒12‒10
five papers chosen by |
| By: | Thomas J. Fitzpatrick; Amy B. Monahan |
| Abstract: | Much attention has been paid to the significant underfunding of many state and local employee pension plans, as well as efforts by states and cities to alleviate that underfunding by modifying the benefits provided to workers. Yet relatively little attention has been paid to the systemic causes of such financial distress—such as chronic underfunding that shifts financial burdens to future taxpayers, and governance rules that may reduce the likelihood that a plan’s trustees will make optimal investment decisions. This article presents the results of a qualitative study of the funding and governance provisions of twelve public pension plans that are a mix of state and local plans of various funding levels. We find that none of the plans in our study satisfy the best practices that have been established by expert panels, but also that the strength of a plan’s governance provisions does not appear correlated with a plan’s financial health. Our most important finding is that, regardless of the content of a plan’s governance provisions, such provisions are almost never effectively enforced. This lack of enforcement, we theorize, has a significant, detrimental impact on plan funding and governance. If neither plan participants nor state taxpayers are able to effectively monitor and challenge a state’s inadequate funding or improper investment decisions, public plans are very likely to remain underfunded. We conclude by offering several possible reform options to address the monitoring and enforcement problems made clear by our study: automatic benefi t haircuts, automatic tax increases, a low-risk investment requirement, and market monitoring through the use of modified pension obligation bonds. |
| Keywords: | State finance ; Social security ; Public policy |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedcwp:1223&r=cdm |
| By: | Francesc Llerena (Universitat Rovira i Virgili - CREIP); Marina Nunez (Universitat de Barcelona); Carles Rafels (Universitat de Barcelona) (Universitat de Barcelona) |
| Abstract: | On the domain of two-sided assignment markets, the nucleolus is axiomatized as the unique solution that satisfies derived consistency (Owen, 1992) and complaint mono- tonicity on sectors size. As a consequence, we obtain a geometric characterization of the nucleolus by means of a strong form of the bisection property that characterizes the inter- section between the core and the kernel of a coalitional game in Maschler et al (1979). |
| Keywords: | core, assignment games, nucleolus, cooperative games |
| JEL: | C71 C78 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:bar:bedcje:2012286&r=cdm |
| By: | Coenen, Michael; Jovanovic, Dragan |
| Abstract: | We analyze a constrained dictator game in which the dictator splits a pie which will be subsequently created through simultaneous investments by herself and the recipient. We consider two treatments by varying the maximum attainable size of the pie leading to either high or low investment incentives. We find that constrained dictators and recipients invest less than a model with self-interested players would predict. While the splitting decisions of constrained dictators correspond to the theoretical predictions when investment incentives are high, they are more selfish when investment incentives are low. Overall, team productivity is negatively affected by lower investment incentives. -- |
| Keywords: | Bargaining Game,Dictator Game,Investment Incentives,Team Production |
| JEL: | C72 C91 D01 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:77&r=cdm |
| By: | Leech, Dennis (University of Warwick); Leech, Robert (Imperial College, London) |
| Abstract: | The weighted voting system used by the International Monetary Fund creates problems of democratic legitimacy since each member's influence or voting power is not in general equal to its voting weight. Using voting power analysis to analyse both the Board of Governors and the Executive Board, we show that it tends to enhance the power of the United States at the expense of all other members. We investigate the constituency system as a form of representative democracy, idealizing it as a compound voting body, and find that it gives disproportionately large power to some smaller European countries, particularly Belgium and Netherlands. We also find that many countries are effectively disenfranchised. Separate analyses are done for 2006 and 2012, before and after recent reforms, which have been billed as being radical, enhancing the voice of the poor and emerging markets, but the effects are disappointingly small. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:1001&r=cdm |
| By: | Sergio Currarini (Department of Economics, Universita' degli Studi di Venezia & University of Bristol); Marco Marini (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza") |
| Abstract: | We consider a class of symmetric games with externalities across coalitions and show that, under certain regularity conditions, restricting the deviating power to majority guarantees the existence of core-stable allocations. We also show that if majorities can extract resources from minorities, stability requires a supermajority rule, whose threshold is increasing in the extraction power. |
| Keywords: | Majority Rule, Supermajority, Externalities, Core |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:aeg:report:2012-01&r=cdm |