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on Collective Decision-Making |
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Issue of 2013‒02‒03
fifteen papers chosen by |
| By: | Axel Dreher; Peter Nunnenkamp; Maya Schmaljohann |
| Abstract: | We investigate the importance of geo-strategic and commercial motives for the allocation of German aid to 138 countries over the 1973-2010 period. We find that geo-strategic and – less robustly – commercial motives matter. When we relate geo-strategic and commercial motives to the political color of the German government in general, and the Ministry for Economic Cooperation and Development and the Federal Foreign Office in particular, we find their importance to increase under socialist leadership. Socialist leadership also decreases the amount of aid commitments, controlled for other factors |
| Keywords: | aid allocation; government ideology |
| JEL: | F35 F53 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1817&r=cdm |
| By: | Marta Faias (Universidade Nova de Lisboa); Emma Moreno-garcÃa (Universidad de Salamanca); Myrna Wooders (Vanderbilt University) |
| Abstract: | Bergstrom, Blume and Varian (1986) provides an elegant gametheoretic model of an economy with one private good and one public good. Strategies of players consist of voluntary contributions of the private good to public good production. Without relying on first order conditions, the authors demonstrate existence of Nash equilibrium and an extension of Warr's neutrality result - any redistribution of endowment that left the set of contributors unchanged would induce a new equilibrium with the same total public good provision. The assumption of one-private good greatly facilities the results. We provide analogues of the Bergstrom, Blume and Varian results in a model allowing multiple private and public goods. In addition, we relate the strategic market game equilibrium to the private provision of equilibrium of Villanaci and Zenginobuz (2005), which provides a counter-part to the Walrasian equilibrium for a public goods economy. Our techniques follow those of Dubey and Geanakoplos (2003), which itself grows out of the seminal work of Shapley and Shubik (1977). Our approach also incorporates, into the strategic market game literature, economies with production, not previously treated and, as a by-product, establishes a new existence of private-provision equilibrium. |
| Keywords: | Public goods, market games, equilibrium, Nash equilibrium, privateprovision, voluntary contributions. |
| JEL: | H0 C7 |
| Date: | 2012–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:van:wpaper:vuecon-12-00001&r=cdm |
| By: | Giuliano, Paola (University of California, Los Angeles); Nunn, Nathan (Harvard University) |
| Abstract: | We provide evidence that a history of democracy at the local level is associated with contemporary democracy at the national level. Auxiliary estimates show that a tradition of local democracy is also associated with attitudes that favor democracy, with better quality institutions, and higher level of economic development. |
| Keywords: | democracy, historical persistence, local institutions |
| JEL: | N30 P0 Z1 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7156&r=cdm |
| By: | Sambit Bhattacharyya; Roland Hodler |
| Abstract: | Democracy and media freedom have been suggested as useful tools in the fight against political corruption, but so far their interplay in this fight has received scant attention. We present a game theoretic model which predicts that the corruption-reducing effect of democracy becomes stronger as media freedom increases. Using panel data covering the period 1980-2008 and 126 countries, we find empirical support for this prediction. Our main results hold when we control for the effects of income, time varying common shocks, regional fixed effects and various additional covariates. The complementarity between democracy and media freedom in the fight against corruption is also supported by Indian state level data. |
| Keywords: | Corruption, Political institutions, Democracy, Media freedom |
| JEL: | D72 D73 H11 |
| Date: | 2012–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:wps/2012-02&r=cdm |
| By: | Nicolas Jacquemet (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, BETA - Bureau d'économie théorique et appliquée - CNRS : UMR7522 - Université de Strasbourg - Université Nancy II); Frédéric Koessler (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris - Institut national de la recherche agronomique (INRA)) |
| Abstract: | This paper studies the value of private information in strictly competitive interactions in which there is a trade-off between (i) the short-run gain of using information, and (ii) the long-run gain of concealing it. We implement simple examples from the class of zero-sum repeated games with incomplete information. While the empirical value of information does not always coincide with the theoretical prediction, the qualitative properties of the value of information are satisfied in the laboratory: (i) it is never negative, (ii) it decreases with the number of repetitions, (iii) it is bounded below by the value of the infinitely repeated game, and (iv) it is bounded above by the value of the one-shot game. In line with the theory, the empirical use of private information is almost complete when it should be, and decreases in longer interactions. |
| Keywords: | Concealment of information; Laboratory experiments; Value of information; Zero-sum repeated games |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00773412&r=cdm |
| By: | Olper, Alessandro; Fatkowski, Jan; Swinnenm Johan |
| Abstract: | This paper studies the effect of political regime transitions on public policy using a new data set on global agricultural and food policies over a 50-year period (including data from 74 developing and developed countries over the 1955–2005 period). The authors find evidence that democratization leads to a reduction of agricultural taxation, an increase in agricultural subsidization, or both. The empirical findings are consistent with the predictions of the median voter model because political transitions occurred primarily in countries with a majority of farmers. The results are robust to different specifications, estimation approaches, and variable definitions. |
| Keywords: | Parliamentary Government,Labor Policies,Emerging Markets,Political Economy,Population Policies |
| Date: | 2013–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:6336&r=cdm |
| By: | Klumpp, Tilman (University of Alberta, Department of Economics); Su, Xuejuan (University of Alberta, Department of Economics) |
| Abstract: | We examine the incentives of access-regulated firms to invest in infrastructure facilities they must share with competitors. The non-strategic incentives imply that investment depends positively on the market size. The strategic incentives imply that investment also depends on market composition, namely, the market shares of the facility owner and its competitors. Using a dataset of regulated electric utilities in the United States, we find evidence that transmission investments are indeed made strategically. Ceteris paribus, utilities are less likely to invest, and investment levels are lower, when competitors occupy a larger share of the market. |
| Keywords: | infrastructure investment; network industries; open access; access regulation; electricity wholesale market |
| JEL: | D21 D22 D43 K23 L43 L94 |
| Date: | 2013–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2013_002&r=cdm |
| By: | LOPES BENTO Cindy; HOTTENROTT Hanna |
| Abstract: | This study analyses the effectiveness of targeted public support for R&D investment. In particular, we test whether the specific policy design aiming at incentivizing (international)collaboration and R&D in small and medium-sized firms achieves the desired objectives on input as well as output additionality. Our results show that the targeted R&D subsidies accelerate R&D spending in the private sector, and especially so in the targeted groups. Further, we differentiate between privately financed R&D and subsidy-induced R&D investment to evaluate their respective effects on innovation performance. The results confirm that the induced R&D is productive as it translates into marketable product innovations. While both types of R&D investments trigger significant output effects, we find that the effect of subsidy-induced R&D investment is higher for firms that collaborate internationally as well as for SMEs. |
| Keywords: | Innovation Policy; Subsidies; R&D; Trestment effect; SMEs; International Collaboration; Innovation Performance |
| JEL: | C14 C30 G23 O31 O38 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:irs:cepswp:2012-36&r=cdm |
| By: | Hanna Daoudy; Michel Verstraeten |
| Abstract: | The present study analyses the impacts of verbal interactions as well as the team’s international diversity on team performance and on team members’ satisfaction during a game called the Marshmallow Challenge. Ninety-one students from a business school participated in the game, forming twenty-three teams. The purpose was to construct the highest freestanding structure with 20 sticks of spaghettis and a marshmallow on top. Participants only had eighteen minutes to achieve this goal. The variables were measured through observations and through individual questionnaires. Results show that verbal interactions played a critical role on both performance and satisfaction. Teams where some of the members spoke more than others were more likely to achieve higher performance. Members in these teams were also more satisfied regarding the team outcome. Furthermore, open discussions in teams decreased the members’ communication process satisfaction. Finally interesting results appeared in international teams. For instance, the average level of anger and frustration was highest in these teams. This in turn had an impact on personal satisfaction. More specifically, the team’s international diversity affected negatively the members’ communication process satisfaction. Taken together, these findings show that communication strongly affected performance and satisfaction and it significantly influenced members’ willingness to remain in the same team. Despite these observations, the current study presents some limitations that will be discussed and that should be taken into account for further research. |
| Keywords: | team performance; team members’ satisfaction; verbal interactions |
| Date: | 2013–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:2013/138387&r=cdm |
| By: | Laurent Bouton (Boston University); Micael Castanheira (Université Libre de Bruxelles); Aniol Llorente-Saguer (Max Planck Institute for Research on Collective Goods, Bonn) |
| Abstract: | This paper both theoretically and experimentally studies the properties of plurality and approval voting when the majority is divided as a result of information imperfections. The minority backs a third alternative, which the majority views as strictly inferior. The majority thus faces two problems: aggregating information and coordinating to defeat the minority candidate. Two types of equilibria coexist under plurality: either voters aggregate information, but this requires splitting their votes, or they coordinate but cannot aggregate information. With approval voting, expected welfare is strictly higher, because some voters multiple vote to achieve both goals at once. In the laboratory, we observe both types of equilibrium under plurality. Which one is selected depends on the size of the minority. Approval voting vastly outperforms plurality. Finally, subject behavior suggests the need to study asymmetric equilibria. |
| Keywords: | Experiments, Multicandidate Elections, Plurality, Approval Voting |
| JEL: | C92 C72 D70 P16 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:mpg:wpaper:2012_20&r=cdm |
| By: | Jacob Boudoukh; Ronen Feldman; Shimon Kogan; Matthew Richardson |
| Abstract: | A basic tenet of financial economics is that asset prices change in response to unexpected fundamental information. Since Roll’s (1988) provocative presidential address that showed little relation between stock prices and news, however, the finance literature has had limited success reversing this finding. This paper revisits this topic in a novel way. Using advancements in the area of textual analysis, we are better able to identify relevant news, both by type and by tone. Once news is correctly identified in this manner, there is considerably more evidence of a strong relationship between stock price changes and information. For example, market model R-squareds are no longer the same on news versus no news days (i.e., Roll’s (1988) infamous result), but now are 16% versus 33%; variance ratios of returns on identified news versus no news days are 120% higher versus only 20% for unidentified news versus no news; and, conditional on extreme moves, stock price reversals occur on no news days, while identified news days show an opposite effect, namely a strong degree of continuation. A number of these results are strengthened further when the tone of the news is taken into account by measuring the positive/negative sentiment of the news story. |
| JEL: | G14 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18725&r=cdm |
| By: | Donna Harris; Benedikt Herrmann |
| Abstract: | Using a laboratory experiment with minimal groups, we examined the extent to which the threats of costly punishments affect in-group favouritism behaviour. We studied three types of punishment separately: in-group, out-group, and third-party punishments. In line with previous studies, the majority of the allocators favoured their own group by allocating more money to each of the in-group members at the expense of the out-group in the baseline without punishment. In the in-group punishment treatment, we observed a slight increase in in-group favouritism behaviour. On the contrary, when only the out-group could punish the allocators, there was a significant drop in in-group favouritism behaviour as well as an increase in the equal division option. Finally, when faced with an independent third-party punisher the allocators continued to favour their own group. The threat of third-party punishment appeared to have no effect on their decisions. Our paper contributes to the literature on in-group favouritism and the nature of social norms by showing that the decision whether to favour one’s own group is affected by the threats of in-group and out-group punishments and whether it leads to an increase or decrease in this behaviour depends on who has the punishment power. Parochial or in-group biased norm was enforced by the in-group members, whilst ‘egalitarian sharing norm’ (across groups) was enforced by the out-group members. We conclude firstly that people apply different ‘self-serving’ social norms depending on their own group identity. Secondly, unlike selfish or opportunistic behaviours, independent third-parties, who only observed this behaviour but were not directly affected by it, were not willing to punish this behaviour. |
| Keywords: | In-group favouritism, Group behaviour, Social identity, Social norm, In-group punishment, Out-group punishment, Third-party punishment, Favour game |
| JEL: | D70 D73 C92 |
| Date: | 2012–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:628&r=cdm |
| By: | Roxana Gutierrez-Romero |
| Abstract: | This article investigates whether vote-buying and the instigation of violence in the disputed 2007 Kenyan elections were strategically motivated, and whether those affected by electoral violence changed their views towards ethno-politics and the use of violence. To answer these questions, a panel survey conducted before and after the elections is combined with external indicators of electoral violence. We find that political parties targeted vote-buying towards specific groups to weaken the support of their political rivals and to mobilize their own supporters. Furthermore, parties instigated violence strategically in areas where they were less likely to win. Although the victims of violence would prefer that parties are no longer allowed to organize in ethnic or religious lines, they are more likely to identify in ethnic terms, support the use of violence and avoid relying on the police to resolve disputes. The overall findings suggest an increased risk of electoral-violence reoccurring. |
| Keywords: | Political competition, electoral violence, vote-buying, election fraud, ethnic identity, Kenya |
| Date: | 2012–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:wpf/2012-16&r=cdm |
| By: | Sebastian Ille |
| Abstract: | This paper develops a simple dynamic, non-symmetric game between two player populations that can be generalised to a large variety of conflicts. One population attempts to re-write a current (social) contract in its favour, whereas the other prefers to maintain the status quo. In the modelùs initial set up, the free-rider problem obstructs the occurrence of a conflict, leading to a low probability of a successful turn-over. The normative and conventional framework, in which players interact, plays however a vital role in the evolution of conflicts. By relating the individual pay-off perceptions for each strategy to the type and frequency of norm violations, the free-rider effect can be considerably weakened, thus enabling the model to predict the existence of two stable equilibria; one with a high rate of conflict, and another in which no conflict arises. This second equilibrium is caused by a triggering event. The model provides an explanation of how and why these events may occur and under which conditions they can be observed more frequently. In addition, it is also shown which factors influence the equilibriaùs basin of attraction, i.e. the likelihood of a transition and hence the probability of a conflict. |
| Keywords: | Social Conflict, Social Change, Evolutionary Game, Stability of Equilibria |
| Date: | 2013–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2013/01&r=cdm |
| By: | Newton, Jonathan |
| Abstract: | This study considers pure coordination games on networks and the waiting time for an adaptive process of strategic change to achieve efficient coordination. Although it is in the interest of every player to coordinate on a single globally efficient norm, coalitional behavior at a local level can greatly slow, as well as hasten convergence to efficiency. For some networks, parameter values exist at which the effect of coalitional behavior changes abruptly from a conservative effect to a reforming effect. These effects are confirmed for a variety of stylized and empirical social networks found in the literature. For coordination games in which the Pareto efficient and risk dominant equilibria differ, polymorphic states can be the only stochastically stable states. |
| Keywords: | social networks; networks; conservatism; reform; social norm; coalition; learning; Stochastic stability; Evolution |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:syd:wpaper:2123/8895&r=cdm |