|
on Collective Decision-Making |
| By: | Spiros Bougheas (School of Economics, University of Nottingham); Jeroen Nieboer (School of Economics, University of Nottingham); Martin Sefton (School of Economics, University of Nottingham) |
| Abstract: | We investigate experimentally the effect of consultation (unincentivized advice) on choices under risk in an incentivized investment task. We compare these choices to two benchmark treatments: one with isolated individual choices, and a second with group choice after communication. Our benchmarking treatments replicate earlier findings that groups take more risk than individuals in the investment task . In our consultation treatments we find evidence of peer effects: there is significant correlation of decisions within the peer group. However, average risk taking is not significantly different from the benchmark treatment with isolated individual choices. This latter result underlines the importance of payoff-commonality for bringing about higher risk-taking in groups. |
| Keywords: | experimental economics, choice under risk, advice, social influence, peer effects |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:not:notcdx:2013-01&r=cdm |
| By: | Christophe Muller (Aix-Marseille University (Aix-Marseille School of Economics, EHESS & CNRS.); Marc Vothknecht (German Institute for Economic Research (DIW Berlin)) |
| Abstract: | We study the impact of violent conflict on social capital, as measured by citizen participation in community groups, defined by four activity types: governance, social service, infrastructure development and risk-sharing. Combining household panel data from Indonesia with conflict event information, we find an overall decrease in citizen contributions in districts affected by group violence in the early post-Suharto transition period. However, participation in communities with a high degree of ethnic polarization is less affected, and is even stimulated for local governance and risk-sharing activities. Moreover, individual engagement appears to depend on the involvement of other members from the same ethnic group, which points toward building of intra-ethnic social networks in the presence of violence. Finally, our results show the danger of generalization when dealing with citizen participation in community activities. We find a large variety of responses depending on the activity and its economic and social functions. We also find large observed and unobserved individual heterogeneities of the effect of violence on participation. Once an appropriate nomenclature of activities is used and controls for heterogeneity are applied, we find that the ethnic and social configuration of society is central in understanding citizen participation. |
| Keywords: | Violent Conflict, Citizen Participation, Local Public Goods |
| JEL: | D74 H42 O11 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:aim:wpaimx:1306&r=cdm |
| By: | Kawai, Masahiro (Asian Development Bank Institute) |
| Abstract: | Infrastructure connectivity in Northeast Asia—comprising the northeastern People’s Republic of China, Japan, the Democratic People’s Republic of Korea, the Republic of Korea, Mongolia, and the Russian Far East—has been hindered by limited intergovernmental cooperation. The paper finds that total infrastructure investment needs for Northeast Asia excluding Japan and the Republic of Korea (in transport, energy, information and communication technology, and the environment) could be $63 billion per year over the next 10 years. Of this total, $13 billion would have to be mobilized every year from external sources. The paper considers three options to fund these needs in addition to traditional financing by bilateral and multilateral agencies: (i) special and/or trust funds newly set up in existing multilateral development banks (MDBs), (ii) a structured infrastructure investment fund supported by MDBs, and (iii) a new subregional multilateral development bank. It suggests that the first two have potential, but recommends against establishing a new development bank. |
| Keywords: | infrastructure development and connectivity; subregional cooperation programs in asia; northeast asian infrastructure forum; northeast asian infrastructure fund |
| JEL: | F15 F36 F55 O19 Q01 |
| Date: | 2013–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbiwp:0407&r=cdm |
| By: | H Peyton Young; Paul Glasserman |
| Abstract: | Interconnections among financial institutions create potential channels for contagion and amplification of shocks to the financial system. We propose precise definitions of these concepts and analyze their magnitude. Contagion occurs when a shock to the assets of a single firm causes other firms to default through the network of obligations; amplification occurs when losses among defaulting nodes keep escalating due to their indebtedness to one another. Contagion is weak if the probability of default through contagion is no greater than the probability of default through independent direct shocks to the defaulting nodes. We derive a general formula which shows that, for a wide variety of shock distributions, contagion is weak unless the triggering node is large and/or highly leveraged compared to the nodes it topples through contagion. We also estimate how much the interconnections between nodes increase total losses beyond the level that would be incurred without interconnections. A distinguishing feature of our approach is that the results do not depend on the specific topology: they hold for any financial network with a given distribution of bank sizes and leverage levels. We apply the framework to European Banking Authority data and show that both the probability of contagion and the expected increase in losses are small under a wide variety of shock distributions. Our conclusion is that the direct transmission of shocks through payment obligations does not have a major effect on defaults and losses; other mechanisms such as loss of confidence and declines in credit quality are more llikely sources of contagion. |
| Keywords: | Systemic risk, contagion, financial network |
| JEL: | D85 G21 |
| Date: | 2013–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:642&r=cdm |
| By: | Link, Albert N. (University of North Carolina at Greensboro, Department of Economics); Scott, John T. (Dartmouth College) |
| Abstract: | In the aftermath of the passage of the American Recovery and Reinvestment Act of 2009, the employment effects of public subsidies have been scrutinized because of new emphasis on public accountability and transparency. In this paper we investigate conditions in which public subsidies of research and development (R&D) in small firms stimulate employment growth. We find, based on an empirical analysis of employment growth induced by U.S. Department of Defense Small Business Innovation Research (SBIR) program awards, that the stimulated employment growth is greater under two conditions: one, the presence of outside investors providing additional funding for the R&D, and two, when an exceptional amount of intellectual property is created by the publicly subsidized R&D. In addition to outside investors, other firms that make commercial agreements with the subsidized firm appear important for the employment growth of the subsidized firm. Cooperation between the small business doing the R&D and other firms is an important determinant of the commercial success of the technologies created with the support of public funds. |
| Keywords: | Public subsidy of R&D; Intellectual property; Employment growth; Entrepreneurship; Cooperation |
| JEL: | J21 L26 O31 O38 |
| Date: | 2013–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:ris:uncgec:2013_001&r=cdm |
| By: | Arnaud Dellis; Mandar Oak (School of Economics, University of Adelaide) |
| Abstract: | We use the citizen-candidate model to study the differential incentives that different voting rules provide for candidate entry, and their effect on policy polarization. In particular, we show that allowing voters to cast multiple votes leads to equilibria which support multiple candidate clusters. These equilibria are more polarized than those obtained under the Plurality Rule. We also show that equilibria under the Alternative Vote Rule do not exhibit multiple candidate clusters and they are less polarizing than those under the Plurality Rule. These results differ from those obtained in the existing literature, where the set of candidates is exogenous. Thus, our paper contributes to the scholarly literature as well as public debate on the merits of using alternative voting rules by highlighting the importance of endogenous candidacy. |
| Keywords: | plurality, approval voting, citizen-candidate |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:adl:wpaper:2013-02&r=cdm |
| By: | Gail Pacheco (Department of Economics, Faculty of Business and Law, Auckland University of Technology); Barrett Owen |
| Abstract: | This study empirically explores the determinants of political participation. Using recent data from the European Social Survey (2010/2011), we investigate the relationship between political participation and personal values, via use of the Schwartz (1992) values inventory. Political activities are categorised into levels of participation (none, weak, medium, strong) based on the cost of participating and how unconventional the activity is. A generalised ordered logit model is applied, and finds that individuals that are more open to change and more self-transcendent, are more likely to participate. Furthermore, the patterns of influence (with respect to the majority of individual characteristics) are not monotonic in nature, as you rise through the levels of political participation, highlighting some key areas that future research could tackle. These findings are important for researchers and policy makers who may be interested in understanding determinants of, and/or enhancing the level of political participation in an economy. |
| Keywords: | personal values, political participation |
| JEL: | D72 P16 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:aut:wpaper:201302&r=cdm |
| By: | Gani Aldashev; Marco Marini; Thierry Verdier |
| Abstract: | Mission-driven nonprofi?t organizations compete for donations through fundrais- ing activities. Such competition can lead to inefficient outcomes, if nonpro?fits impose ex- ternalities on each others? output. This paper studies the design of sustainable voluntary cooperation agreements, using a game-theoretic model of alliance formation. Two key char- acteristics determine the stability of cooperation: the alliance formation rule and whether the fundraising efforts of nonprofi?ts are strategic complements or substitutes. Both affect the incentives to deviate from the cooperative agreement (by one or several nonpro?ts). We propose conditions on the alliance formation protocols that facilitate the stability of Pareto-optimal cooperation in fundraising. |
| Keywords: | nonprofits, giving, coordination, endogenous coalition formation, non-distribution constraint. |
| JEL: | L31 D74 L44 C72 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:293&r=cdm |
| By: | Gani Aldashev |
| Abstract: | Is the decline in voter turnout an indicator of a worse health of a representative democracy? We build a simple probabilistic-voting model with endogenous turnout to address this question. We ?nd that a lower turnout caused by a higher cost of voting implies higher political rents. Contrarily, a lower turnout caused by a higher ideological mobility of voters or by a lower expressive bene?t of voting implies lower political rents. If voters have a civic-duty motive to vote which depends on the level of rents, multiple equilibria (a high-rents and a low-rents) can arise. |
| Keywords: | voter turnout, political rents, electoral competition. |
| JEL: | E62 H3 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:cca:wpaper:294&r=cdm |
| By: | Matthew W. McCarter (Argyros School of Business and Economics, Chapman University); Anya C. Samak (School of Human Ecology, University of Wisconsin-Madison); Roman M. Sheremeta (Argyros School of Business and Economics, Chapman University) |
| Abstract: | It is common in organizational life to be simultaneously involved in multiple collective actions. These collective actions may be modeled using public good dilemmas. The developing social dilemma literature has two perspectives – the “divided loyalties” and “conditional cooperation” perspectives – that give opposite predictions about how individuals will behave when they simultaneously play two identical public good games. The current paper creates consensus between these social dilemma perspectives by examining cooperative behavior of participants interacting in two public good games with either different or the same group members. In each round, individuals have a common budget constraint across the two games. In support of the conditional cooperator’s perspective of social dilemmas, we find that playing two games with different, rather than same, group members increases overall contributions. Over the course of the experiment, participants playing two games with different group members shift their contributions significantly more often toward more cooperative public good games than participants playing with the same group members. |
| Keywords: | cooperation, conditional cooperation, public good, experiments, group composition |
| JEL: | C72 C73 C91 D03 H41 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:chu:wpaper:13-08&r=cdm |
| By: | Leopoldo Fergusson; Juan F. Vargas |
| Abstract: | This paper studies the effect of strengthening democracy, as captured by an increase in voting rights, on the incidence of violent civil conflict in nineteenth-century Colombia. Empirically studying the relationship between democracy and conflict is challenging, not only because of conceptual problems in defining and measuring democracy, but also because political institutions and violence are jointly determined. We take advantage of an experiment of history to examine the impact of one simple, measurable dimension of democracy (the size of the franchise) on conflict, while at the same time attempting to overcome the identification problem. In 1853, Colombia established universal male suffrage. Using a simple difference-indifferences specification at the municipal level, we find that municipalities where more voters were enfranchised relative to their population experienced fewer violent political battles while the reform was in effect. The results are robust to including a number of additional controls. Moreover, we investigate the potential mechanisms driving the results. In particular, we look at which components of the proportion of new voters in 1853 explain the results, and we examine if results are stronger in places with more political competition and state capacity. We interpret our findings as suggesting that violence in nineteenth-century Colombia was a technology for political elites to compete for the rents from power, and that democracy constituted an alternative way to compete which substituted violence. |
| Date: | 2013–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:col:000092:010545&r=cdm |
| By: | Arvanitis, Spyros (KOF, ETH Zürich); Lokshin, Boris (School of Business and Economics, Maastricht University); Mohnen, Pierre (UNU-MERIT/MGSoG); Wörter, Martin (KOF, ETH Zürich) |
| Abstract: | There is growing evidence that firms increasingly adopt open innovation practices. In this paper we investigate the impact of two such external knowledge acquisition strategies, 'buy' and 'cooperate', on firm's product innovation performance. Taking a direct (productivity) approach, we test for complementarity effects in the simultaneous use of the two strategies, and in the intensity of their use. Our results based on large panels of Dutch and Swiss innovating firms, suggest that while both 'buy' and 'cooperate' have a positive effect on innovation, there is little statistical evidence that using them simultaneously leads to higher innovation performance. Results from the Dutch sample provide some indication, that there are positive economies of scope in doing external and cooperative R&D simultaneously conditional on doing internal R&D. |
| Keywords: | Innovation, Open innovation, R&D collaboration, make, buy strategies |
| JEL: | O31 O32 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2013003&r=cdm |
| By: | Cowan, Robin (UNU-MERIT/MGSoG, Maastricht University, and BETA, Universite de Strassbourg); Kamath, Anant (UNU-MERIT/MGSoG) |
| Abstract: | This is a model of knowledge exchange by means of informal interaction among agents in low technology clusters. What this study seeks to do is to colour these exchanges by placing them in an environment of complex social relations, test whether the small-world network structure is the most favourable for knowledge exchanges in these environments, and explore the influence of social relations and network distance. These enquiries are the contribution of this model to the existing series of studies on efficient network structures for knowledge diffusion. We find that the small-world network structure may not be the best network structure for highest and most equitable knowledge distribution, when knowledge exchanges are undertaken in environments of complex social relations. Also, we confirm that the highest and most equitable knowledge distribution is achieved when there is perfect affinity among the agents. |
| Keywords: | Knowledge Exchanges, Small-Worlds, Social Networks, Complex Social Relations |
| JEL: | D85 O33 Z13 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2013004&r=cdm |
| By: | Adele C. Morris; Warwick J. McKibbin; Peter J. Wilcoxen |
| Abstract: | The Doha climate talks in December 2012, wrapped up lines of negotiation that were begun years before in Bali. Negotiators resolved contentious questions about the future of the Kyoto Protocol and finally put the constraints of the Bali agenda behind them. Now they need turn to developing by 2015 a new agreement under the United Nations Framework Convention on Climate Change (UNFCCC) to cover the post-2020 period. In order to make concrete progress on climate policy there is a need to establish a Carbon Pricing Consultation (CPC) process, which would be a detailed, pragmatic, and ongoing discussion of the implementation details of domestic cap-and-trade and GHG taxes. Though carbon pricing generally been considered to be a national-level policy?to be adopted at the discretion of individual governments?the paper argues that a CPC process would provide an opportunity for negotiators, as well as the administrators of national pricing policies, to discuss how to induce, practically and efficiently, the broad economic shifts required to de-couple emissions and economic activity. This paper makes the argument for focusing on carbon pricing in the international negotiations and offers a way forward in that process. |
| Keywords: | Carbon Pricing, Carbon Tax, UNFCCC, Climate Change, Negotiations |
| JEL: | F51 F53 Q54 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2013-08&r=cdm |
| By: | Weng, Qian (Department of Economics, School of Business, Economics and Law, Göteborg University); Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | Common identity and peer punishment have been identified as important means to reduce free riding and to promote cooperation in teamwork settings. This paper examines the relative importance of these two mechanisms, as well as the importance of income distribution in team cooperation. In a repeated public good experiment, conditions vary among different combinations of homogenous or heterogeneous endowment, strong or weak identity, and absence or presence of peer punishment. We find that without punishment, strong identity can counteract the negative impact of endowment heterogeneity on cooperation. Moreover, punishment increases cooperation irrespective of income distribution and identity strength, and cooperation is similar across all treatments with punishment. These findings provide important implications for management policy makers in organizations: implementing ex ante income heterogeneity within teams should be done with caution, and a very strong peer punishment mechanism is more effective in enhancing cooperation over common identity when both are viable.<p> |
| Keywords: | Endowment distribution; identity; punishment; cooperation; public goods experiment |
| JEL: | C91 D63 H41 M54 |
| Date: | 2013–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0551&r=cdm |
| By: | Catherine Roux; Christian Thöni |
| Abstract: | We explore targeted punishment as an explanation for collusion among many firms. In a series of Cournot oligopoly experiments with various numbers of firms, we compare production decisions with and without the possibility to target punishment at specific market participants. We find strong evidence that targeted punishment enables firms to establish and maintain collusion. More so, we find that the collusive effect of targeted punishment is even stronger in markets with more competitors, suggesting a reversal of the conventional wisdom that collusion is easier the fewer the firms. |
| Keywords: | Cournot oligopoly; Experiments; Collusion; Targeted punishment |
| JEL: | L13 K21 C91 |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:13.02&r=cdm |
| 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: | 2013–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:wps/2013-02&r=cdm |
| By: | Porath, Amiram (CREST Expert Group) |
| Abstract: | Collaborative Research (CR) is usually regarded as a way to overcome several R&D barriers: the limitations of specific R&D projects resulting from lack of finance required for research infrastructure investment; the lack of expertise in industry (while it exists in academic institutes); and successful knowledge transfer. CR can be regarded as a strategic Open Innovation tool. In a book published in 2010 (Porath, 2010) I discussed CR on various aspects, analyzing it from the academic point of view and in the later part of the book on the practical aspects of participants and policy makers. Two recent books have been published, in which I have one chapter each. In the first one I presented a model (Porath, 2012a); and in the second a case study (Porath 2012b) regarding Open Innovation. These chapters have not dealt with CR as Open Innovation but rather presented another tool that has made Open Innovation a strategy for companies with little other choice. In this chapter I will combine the three sources into a more comprehensive picture. |
| Keywords: | Collaborative research; Open innovation; Knowledge management |
| JEL: | L14 L17 O32 |
| Date: | 2013–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:ris:cieodp:2013_001&r=cdm |
| By: | Nicolas Gavoille (CREM CNRS UMR6211, Condorcet Center, University of Rennes 1, France) |
| Abstract: | This article introduces a new database focusing on the legislative production as well as the characteristics of the governments in France, from the early months of the Vth Republic in January 1959 to the end of the XIIIth legislature in March 2012. It provides a large amount of variables covering several aspects of the legislative production, classified in four different groups: composition of the governments, political constraints, institutional variables and legislative production. Most of the variables are observed at a monthly rate. |
| Keywords: | Economic theory of legislation, Legislative production function, Political fragmentation, Political Legislation Cycle |
| JEL: | Y10 H69 D72 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cccrwp:2013-01-ccr&r=cdm |
| By: | Brahms, Lisa |
| Abstract: | This paper analyzes the legitimacy of investor-state arbitration under international investment agreements in sovereign debt restructuring. The paper presents mechanisms governing sovereign default generally, namely collective action clauses and informal negotiation in the London and Paris clubs and then discusses how sovereign debt restructuring is governed by IIAs, looking at how the clauses affect restructuring. Taking the conception of legitimacy in global governance by Buchanan and Keohane as a theoretical framework, the legitimacy of IIAs as a mechanism of governing sovereign debt disputes is questioned, looking at the aspects transparency, accountability, minimal moral acceptability, institutional integrity and comparative benefit. It is concluded that investor-state dispute settlement on the basis of IIAs lacks legitimacy to decide on sovereign debt restructuring. -- |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubipe:162013&r=cdm |