New Economics Papers
on Collective Decision-Making
Issue of 2013‒03‒02
nineteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Building Blocks for Smart Networks By OECD
  2. Scientific Mobility and Knowledge Networks in High Emigration Countries: Evidence from the Pacific By John Gibson; David McKenzie
  3. Corporate governance, value and performance of firms: New empirical results on convergence from a large international database By Jackie Krafft; Yiping Qu; Francesco Quatraro; Jacques-Laurent Ravix
  4. Relational Contracting, Repeated Negotiations, and Hold-Up By Sebastian Kranz
  5. The Origins of Social Contracts: Attitudes toward Taxation in Urban Nigeria. By Cristina Bodea; Adrienne LeBas
  6. The Transnational Origins of Constituions: Evidence From a New Global Data Set On Constitional Rights By Goderis, B.V.G.; Versteeg, M.
  7. Quality Control and Due Diligence in Project Management: Getting Decisions Right by Taking the Outside View By Bent Flyvbjerg
  8. On the optimality of bargaining outcomes in the Collective-Particularistic multilateral bargaining game By Daniel Cardona; Antoni Rubí-Barceló
  9. A Competitive Partnership Formation Process By Andersson , Tommy; Gudmundsson , Jens; Talman , Adolphus; Yang , Zaifu
  10. Cooperation Events, Ego-Network Characteristics and Firm Innovativeness – Empirical Evidence from the German Laser Industry By Muhamed Kudic; Katja Guhr
  11. The BPM4ED project: Designing 21st century schools By Domenico Lembo; Massimo Mecella; Mario Vacca
  12. Tactical/Operational Decision Making for Designing Green Logistics Networks By Mallidis, I.; Dekker, R.; Vlachos, D.
  13. Dynamic Coalitions By Baron, David P.; Bowen, T. Renee
  14. ‘Europe of patients, Europe for patients’: the Europeanization of healthcare policies by European patients’ organizations By Vololona Rabeharisoa; Orla O'Donovan
  15. Conditional cooperation among the poor: a new profile? By Jonathan Gheyssens; Isabel Günther
  16. R&D Co-operation in European Post-transition Economies By Andrea Gauselmann
  17. Does Partner Type Matter in R&D Collaboration for Environmental Innovation? By Gunnar Pippel
  18. Regulation, Trust, and Cronyism in Middle Eastern Societies: The Simple Economics of 'Wasta' By Barnett, Andy; Yandle, Bruce; Naufal, George S
  19. "The Economics of Inclusion: Building an Argument for a Shared Society" By Michael A. Valenti; Olivier G. Giovannoni

  1. By: OECD
    Abstract: This report examines the development of smart networks and services with particular attention to the implications for communication policy and regulation. The word “smart” has become a term that is frequently affixed to an area where the introduction of networked information and communication technologies (ICTs) is expected to have significant implications for economic and social development. In this document it is defined as: an application or service that is able to learn from previous situations and to communicate the results of these situations to other devices and users. Collection of data will be enabled by the expansion of Machine-to-Machine (M2M) communications. Large scale processing will be delivered by “cloud computing” services. Analysis of these data will be undertaken around a process frequently called “big data”. These phenomenona together form the “building blocks of smart networks”. Each distinguishes itself from previous similar developments because the size of numbers of devices, data and elements is orders of magnitude larger than that of previous periods.
    Date: 2013–01–17
  2. By: John Gibson (University of Waikato); David McKenzie (The World Bank)
    Abstract: This paper uses a unique survey to examine the nature and extent of knowledge flows that result from the international mobility of researchers whose initial education was in small island countries. Current migrants produce substantially more research than similar-skilled return migrants and non-migrants. Return migrants have no greater research impact than individuals who never migrate but are the main source of research knowledge transfer between international and local researchers. Our results contrast with previous claims in the literature that too few migrant researchers ever return home to have much impact, and that there is no productivity gain to researchers from migration.
    Keywords: Diasporas, Knowledge networks, Scientific mobility
    JEL: J6 O3 R1
    Date: 2013–02
  3. By: Jackie Krafft (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Yiping Qu (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Francesco Quatraro (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS)); Jacques-Laurent Ravix (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis (UNS))
    Abstract: This paper aims to revisit the link between corporate governance, value, and firm performance by focusing on convergence, understood as the way that non-US firms are adopting US best practice in terms of corporate governance, and the implications of this adoption. We examine theoretical questions related to conventional models (agency theory, transaction cost economics, new property rights theory),which tend to suggest rational adoption of best practice, and contributions that alternatively consider country- and firm-level differences as possible barriers to convergence. We contribute to the empirical literature by using a large international database to show how non-US firms' adoption of US best practice is having an impact on performance.
    Keywords: Corporate governance; governance metrics, ratings, rankings and scoring; firm value; firm performance
    Date: 2013
  4. By: Sebastian Kranz (Dept. of Mathematics and Economics, University of Ulm)
    Abstract: We propose a unified framework to study relational contracting and hold-up problems in infinite horizon stochastic games. We first illustrate that with respect to long run decisions, the common formulation of relational contracts as Pareto-optimal public perfect equilibria is in stark contrast to fundamental assumptions of hold-up models. We develop a model in which relational contracts are repeatedly newly negotiated during relationships. Negotiations take place with positive probability and cause bygones to be bygones. Traditional relational contracting and hold-up formulations are nested as opposite corner cases. Allowing for intermediate cases yields very intuitive results and sheds light on many plausible trade-offs that do not arise in these corner cases. We establish a general existence result and a tractable characterization for stochastic games in which money can be transferred. This paper formulates a theory of relational contracting in dynamic games. A crucial feature is that existing relational contracts can depreciate and ensuing negotiations then treat previous informal agreements as bygones. The model nests the traditional formulation of relational contracts as Pareto-optimal equilibria as a special case. In repeated games both formulations are always mathematically equivalent. We provide ample illustrations that in dynamic games the traditional formulation is restrictive in so far that it rules out by assumption many plausible hold-up problems -- even for small discount factors. Our model provides a framework that naturally unifies the analysis of relational contracting and hold-up problems.
    Keywords: Relational contracting, Hold-up, Negotiations, Stochastic games
    JEL: C73 C78 D23 L14
    Date: 2013–02
  5. By: Cristina Bodea; Adrienne LeBas
    Abstract: How do social contracts come into being? This paper argues that norm adoption plays an important and neglected role in this process. Using novel data from urban Nigeria, we examine why individuals adopt norms favoring a citizen obligation to pay tax where state enforcement is weak. We find that public goods delivery by the state produces the willingness to pay tax, but community characteristics also have a strong and independent effect on both social contract norms and actual tax payment. Individuals are less likely to adopt pro-tax norms if they have access to community provision of security and other services. In conflict-prone communities, where “self-help” provision of club goods is less effective, individuals are more likely to adopt social contract norms. Finally, we show that social contract norms substantially boost tax payment. This paper has broad implications for literatures on state formation, taxation, clientelism, and public goods provision.
    Date: 2013
  6. By: Goderis, B.V.G.; Versteeg, M. (Tilburg University, Center for Economic Research)
    Abstract: Abstract Constitutions are commonly described as national products shaped by domestic politics. This paper develops and empirically tests a different hypothesis, which is that constitutions are also shaped by transnational influence, or “diffusionâ€. Constitutional rights can diffuse through four mechanisms: coercion, competition, learning and acculturation. To test diffusion, we traced the historical documents of all post-WWII constitutions and documented the presence of 108 constitutional rights. Using a sample of these rights in 180 countries between 1948 and 2001, we estimate a spatial lag model to explain their adoption. Our results show that countries follow the choices of their former colonizer, countries with the same legal origin, the same religion, the same former colonizer, and the same aid donor. We also find that diffusion explains only 3 percent of the variation in adoption. However, when a country adopts its first constitution, diffusion is much stronger and explains 46 percent of the variation.
    Keywords: constitutions;diffusion;human rights;spatial econometrics
    JEL: K19 C21 O33
    Date: 2013
  7. By: Bent Flyvbjerg
    Abstract: This paper explores how theories of the planning fallacy and the outside view may be used to conduct quality control and due diligence in project management. First, a much-neglected issue in project management is identified, namely that the front-end estimates of costs and benefits--used in the business cases, cost-benefit analyses, and social and environmental impact assessments that typically support decisions on projects--are typically significantly different from actual ex post costs and benefits, and are therefore poor predictors of the actual value and viability of projects. Second, it is discussed how Kahneman and Tversky's theories of the planning fallacy and the outside view may help explain and remedy this situation through quality control of decisions. Third, it is described what quality control and due diligence are in the context of project management, and an eight-step procedure is outlined for due diligence based on the outside view. Fourth, the procedure is tested on a real-life, multibillion-dollar project, organized as a public-private partnership. Finally, Akerlof and Shiller's recent discussion in economics of "firing the forecaster" is discussed together with its relevance to project management. In sum, the paper demonstrates the need, the theoretical basis, a practical methodology, and a real-life example for how to de-bias project management using quality control and due diligence based on the outside view.
    Date: 2013–02
  8. By: Daniel Cardona (Universitat de les Illes Balears); Antoni Rubí-Barceló (Universitat de les Illes Balears)
    Abstract: This note analyzes the efficiency properties of the equilibrium in a multilateral bargaining game in which a legislature divides a budget among collective and particularistic goods. We extend the model of Volden and Wiseman (2007) by considering smooth utility functions and consensus requirements ranging from simple-majority to unanimity. We show that when the private valuation of the private good is relatively high, only unanimity induces an (ex-ante) Pareto efficient outcome. Moreover, optimality can be easily attained by using sequential negotiations, independently of the majority requirement.
    Keywords: Non-cooperative bargaining, sequential negotiantion, voting, quota rules
    JEL: C72 C78 D72
    Date: 2013
  9. By: Andersson , Tommy (Department of Economics, Lund University); Gudmundsson , Jens (Department of Economics, Lund University); Talman , Adolphus (CentER, Tilburg University); Yang , Zaifu (Department of Economics and Related Studies, University of York)
    Abstract: A group of heterogeneous agents may form partnerships in pairs. All single agents as well as all partnerships generate values. If two agents choose to cooperate, they need to specify how to split their joint value among one another. In equilibrium, which may or may not exist, no agents have incentives to break up or form new partnerships. This paper proposes a dynamic competitive adjustment process that always either finds an equilibrium or exclusively disproves the existence of any equilibrium in finitely many steps. When an equilibrium exists, partnership and revenue distribution will be automatically and endogenously determined by the process. Moreover, several fundamental properties of the equilibrium solution and the model are derived.
    Keywords: Partnership formation; adjustment process; equilibrium; assignment market
    JEL: C62 C72 D02
    Date: 2013–02–04
  10. By: Muhamed Kudic; Katja Guhr
    Abstract: We study how firm innovativeness is related to individual cooperation events and the structure and dynamics of firms’ ego-networks employing a unique panel dataset for the full population of 233 German laser source manufactures between 1990 and 2010. Firm innovativeness is measured by yearly patent applications as well as patent grants with a two year time-lag. Network measures are calculated on the basis of 570 knowledge-related publicly funded R&D alliances. Estimation results from a panel data count model with fixed effects are suggestive of direct innovation effects due to individual cooperation events, but only as long as structural ego-network characteristics are neglected. Innovativeness is robustly related to ego-network size and ego-network brokerage whereas ego-network density reveals some surprising results.
    Keywords: R&D cooperation, ego-networks, firm innovativeness
    JEL: L25 O32 D85
    Date: 2013–02
  11. By: Domenico Lembo (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza"); Massimo Mecella (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza"); Mario Vacca (Universita' degli Studi di Roma "La Sapienza")
    Abstract: The ways of schooling and teaching is quickly changing for the continuous evolution of the surrounding world: new forms of education are required; in fact, on the one side the birth of the smart cities and the smart community ask for active citizens interacting with institutions and on the other side the enormous potentiality of ICT is modifying both the learning environments and the training models. The so called “21st century schools”, differ from the current ones in almost all the aspects: building architecture, furniture, teaching and learning methods and so on. This new kind of school are spreading all over Europe and the world and governments, which recognize the importance of an efficient, modern and up to date education system, are committed in the design and implementation of these new schools. Two problems make this scenario confusing, preventing an ordered development of this new kind of schools: first, the lack of theoretical models able to represent the “21st century school” features; second, tools to manage and design these schools and their services and activities are, when they exist, based on the old paradigms (i.e., the traditional school with classrooms, etc.) and are not still integrated in an unique tool to support the overall school working and management. In this paper, the ongoing BPM4ED (Business Process Management for EDucation) research project is described: schools are seen as organizations and the business processes management techniques are used to analyze and classify them; the final and ambitious goals of the project are the development of a design methodology for “21st century schools” and the definition, design and implementation of a new class of integrated tools, possibly including the existing ones, to manage all the school activities and services.
    Keywords: Business Process Modeling; Learning environments;Design Methodology
    Date: 2013–02
  12. By: Mallidis, I.; Dekker, R.; Vlachos, D.
    Abstract: Cap and trade regulations along with an increasing consumer and company demand for green products and services constitute two major drivers for motivating corporations to adopt green practices. However, the adoption of such practices usually increases their operational costs. Therefore, the trade-off between “green†and cost-optimal policies is a common challenge for most organizations, at least in developed countries. The purpose of this paper is to assess alternative logistic network design options (applicable in most supply chains) taking into account both their cost and CO2 emissions performance. The applicability of the proposed methodology is illustrated through the design of a major white good retailer’s logistics network in the region of Greece. The results indicate that a company optimizes its cost performance by serving all its retail stores directly by truck through one central distribution center. On the other hand, a CO2 emissions optimal performance includes additional distribution centers and the employment of rail instead of truck transportation. Moreover, longer review periods, despite the higher holding and backorder costs, result in lower transportation costs and CO2 emissions.
    Keywords: environment;CO2 emissions;periodic review inventory control system
    Date: 2013–02–04
  13. By: Baron, David P. (Stanford University); Bowen, T. Renee (Stanford University)
    Abstract: Policy-making is a dynamic process in which policies can be changed in each period but continue in the absence of new legislation. We study a dynamic legislative bargaining game with an endogenous status quo where in each period a dollar is allocated with a proposal voted against the allocation in the previous period. We characterize for any initial status quo a class of simple Markov perfect equilibria (MPE) with dynamic coalitions, where a dynamic coalition is a decisive set of legislators whose members support the same policy, or set of policies, in at least two consecutive periods. In the basic model a dynamic coalition persists throughout the game, and coalition members share the dollar equally in every period. If uncertainty is associated with the implementation of a policy, there is a continuum of allocations supported by coalition MPE in which the originator of the coalition receives a share larger than the coalition partner receives but smaller than in sequential legislative bargaining theory. These coalition equilibria have the same allocation in every period when the coalition persists, but with positive probability the coalition dissolves due to the uncertainty. Coalition MPE also exists in which members tolerate a degree of implementation uncertainty resulting in coalition allocations that can change from one period to the next. The dynamic coalitions are minimal winning, form in the first period, and, if a coalition dissolves, a new coalition is formed in the next period. The predictions of the theory are compared to experiment results.
    JEL: C73 D72
    Date: 2013–01
  14. By: Vololona Rabeharisoa (Centre de Sociologie de l'Innovation, Mines ParisTech); Orla O'Donovan (Department of Applied Social Studies, University College Cork)
    Abstract: Analyses the role of European patients’ organizations in the process of Europeanization of healthcare policies by exploring the types of organizations constituted by European patients’ organizations and the form of activism they develop.
    Keywords: Europeanization; patient organizations; health activism; evidence-based activism; healthcare policy
    JEL: I18
    Date: 2013–01
  15. By: Jonathan Gheyssens (ETH Zürich); Isabel Günther (ETH Zürich)
    Abstract: On the basis of a conditional contribution experiment conducted in Benin and Uganda, we argue that a conditional u-shaped profile exists, at least in poor communities. Under this profile, individuals invest considerably in public goods when nobody else does, reduce their commitment in reaction to positive group participation and turn into conditional cooperators after a threshold of others’ participation is reached. For the understanding of the dynamics of repeated cooperation the implications of this group of u-shaped cooperators might be important.
    Keywords: Conditional cooperation; Public goods; Experiments; sub-Saharan Africa
    Date: 2013–02–22
  16. By: Andrea Gauselmann
    Abstract: Innovation systems abroad become more and more important to multinational enterprises (MNEs) as sources of knowledge and technology. On the other hand, MNEs’ foreign subsidiaries can be considered agents of technological and economic development in their target location region. Applying a logit estimation, this discussion paper investigates which firm- and region-specific determinants influence cooperations in the area of research and development (R&D) between the foreign subsidiary and the regional innovation system. Results suggest that especially the foreign subsidiary’s mandate in terms of R&D and management, its size and the regional knowledge stock are positively associated with these co-operations. The analysis focuses on posttransition economies, using the example of five selected CEE countries and East Germany. We exploit a unique dataset – the IWH FDI Micro Database – which holds information on 1,245 foreign subsidiaries in this region.
    Keywords: foreign direct investment, Central East Europe, East Germany, R&D-cooperations
    JEL: F23 O30 P13 P20
    Date: 2013–02
  17. By: Gunnar Pippel
    Abstract: In the literature on environmental innovations R&D collaborations have been identified as a critical determinant of a firm’s environmental innovation performance. However, the literature suggests that R&D collaboration is not always beneficial. Therefore, a more elaborated analysis of the effects of R&D collaborations on a firm’s environmental innovation performance is necessary. This paper investigates the impact of R&D col-laborations with different partner types such as customers, competitors, suppliers, uni-versities, governmental research institutes, consultants and other firms within the same firm group on a firm’s environmental innovation performance. In addition, this paper addresses the question of whether the diversity of R&D collaboration partners is im-portant for the environmental innovation performance. Firm-level data from 2,337 Ger-man service and manufacturing firms are used in the regression analysis. The results suggest that R&D collaboration with suppliers, customers, universities, governmental research institutes, consultants and other firms within the same firm group has a signifi-cantly positive impact on a firm’s environmental innovation performance, whereas col-laboration with competitors has no significant impact. The diversity of R&D collaboration partners has a significantly positive impact on a firm’s environmental innovation performance.
    Keywords: R&D, collaboration, environment, innovation
    JEL: O31 O32
    Date: 2013–02
  18. By: Barnett, Andy (Auburn University); Yandle, Bruce (Clemson University); Naufal, George S (American University of Sharjah)
    Abstract: Despite being a fixture of everyday life in the Arab world, wasta, which may be thought of as special influence by members of the same group or tribe, has received little attention from social scientists. Our casual empiricism suggests that wasta is an important determinant of how economic activities are organized and resources are allocated in Middle Eastern societies, yet economists, even those who specialize in work related to the Middle East, have not addressed the issue of wasta. With this paper we provide a modest beginning to filling that void. Specifically, we use the history of wasta, Hayek's concept of extended order and Coase's work on the nature of the firm to draw inferences regarding the existence of wasta and its persistence in Arab societies.
    Keywords: cronyism, wasta, firm, Hayek, Coase, Middle East, social capital
    JEL: D21 K20 N45
    Date: 2013–02
  19. By: Michael A. Valenti; Olivier G. Giovannoni
    Abstract: This paper presents a review of the literature on the economics of shared societies. As defined by the Club de Madrid, shared societies are societies in which people hold an equal capacity to participate in and benefit from economic, political, and social opportunities regardless of race, ethnicity, religion, language, gender, or other attributes, and where, as a consequence, relationships between the groups are peaceful. Our review centers on four themes around which economic research addresses concepts outlined by the Club de Madrid: the effects of trust and social cohesion on growth and output, the effect of institutions on development, the costs of fractionalization, and research on the policies of social inclusion around the world.
    Keywords: Shared Societies; Economic Inclusion; Institutions; Economic Growth; Income Distribution
    JEL: D31 O11 O43
    Date: 2013–02

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