New Economics Papers
on Collective Decision-Making
Issue of 2013‒04‒13
nineteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Why Mass Media Matter to Planning Research: The Case of Megaprojects By Bent Flyvbjerg
  2. Do Institutions Affect Citizens' Selection into Politics? By Thomas Braendle
  3. Finance, Governments, and Trade By Bertola, Giuseppe; Lo Prete, Anna
  4. Social Fragmentation, Public Goods and Elections: Evidence from China By Padro, Gerard; Qian, Nancy; Yao, Yang
  5. The effect of options on coordination By Araujo, Luis; Guimarães, Bernardo
  6. Bounded Rationality and Voting Decisions Exploring a 160-Year Period By David Stadelmann; Benno Torgler
  7. Exit Polls, Turnout, and Bandwagon Voting: Evidence from a Natural Experiment By Rebecca B. Morton; Daniel P. Mueller; Lionel Page; Benno Torgler
  8. Deception detection and the role of self-selection By Konrad, Kai A.; Lohse, Tim; Qari, Salmai
  9. Rational Inattention and Organizational Focus By Dessein, Wouter; Galeotti, Andrea; Santos, Tano
  10. Do French firms use financial participation to transfer more risk to their workers? By Leila Baghdadi; Rihab Bellakhal; Marc-Arthur Diaye
  11. Opportunities and challenges for community involvement in public service provision in rural Guatemala: By Speer, Johanna; Vásquez, William F.
  12. Spatial patterns of organic agriculture adoption: evidence from Honduras By Wollni, Meike; Andersson, Camilla
  13. Multicriteria Decision Making: A Case Study in the Automobile Industry By Márcia Oliveira; Dalila B. M. M. Fontes; Teresa Pereira
  14. Policy Choices by an Incumbent - A Case with Down-Up Problem, Bias Beliefs and Retrospective Voting By Carlos Seixas; António Brandão; Manuel Luís Costa
  15. The sources of preference heterogeneity for nature restoration scenarios By De Valck, Jeremy; Vlaeminck, Pieter; Liekens, Inge; Aertsens, Joris; Chen, Wendy; Vranken, Liesbet
  16. Managing the Quality of Higher Education in Scope of Some Theories By Siklós, Balazs; Gawlik, Remigiusz
  17. A Policy-Based Rationalization of Collective Rules: Dimensionality, Specialized Houses, and Decentralized Authority By Guemmegne, Juliette; Pongou, Roland
  18. Turnout, political preferences and information: Experimental evidence from Perú By Gianmarco León
  19. Hanging together or being hung separately: The strategic power of coalitions where bargaining occurs with incomplete information By Konrad, Kai A.; Cusack, Thomas R.

  1. By: Bent Flyvbjerg
    Abstract: This article asks how planning scholarship may effectively gain impact in planning practice through media exposure. In liberal democracies the public sphere is dominated by mass media. Therefore, working with such media is a prerequisite for effective public impact of planning research. Using the example of megaproject planning, it is illustrated how so-called "phronetic planning research," which explicitly incorporates in its methodology active and strategic collaboration with media, may be helpful in generating change in planning practice via the public sphere. Main lessons learned are: (1) Working with mass media is an extremely cost-effective way to increase the impact of planning scholarship on practice; (2) Recent developments in information technology and social media have made impact via mass media even more effective; (3) Research on "tension points," i.e., points of potential conflict, are particularly interesting to media and the public, and are especially likely to generate change in practice; and (4) Tension points bite back; planning researchers should be prepared for, but not afraid of, this.
    Date: 2013–04
  2. By: Thomas Braendle (University of Basel)
    Abstract: <p style="text-align:justify"><span style="font-size:12.0pt; line-height:115%; font-family:"Times New Roman","serif"">Traditional political economy has paid primary attention to the structuring of the principal-agent relationship between citizens and politicians and the role of competition and institutions in disciplining political agents. However, as the electoral control of politicians and the credibility of policy commitments are limited, this perspective needs to be complemented with an economics of political selection that takes into account the quality of those elected to political office. We review the emerging literature which investigates institutional conditions that impact the selection of politicians. We discuss pay in politics, electoral rules, institutions enhancing transparency in politics, and institutions which govern dual office holding in different branches of government. We argue that further comparative analyses are essential in order to gain an improved understanding of the impact that institutions have on political outcomes, not only via the channel of accountability, but also via the channel of selection.</span>
    Keywords: political selection, electoral rules, incompatibility, citizen candidate model
    JEL: D72 D73 H11
    Date: 2013
  3. By: Bertola, Giuseppe; Lo Prete, Anna
    Abstract: We study how financial transactions may respond to exogenous variation in trade opportunities not only directly, but also through policy channels. In more open economies, governments may find it more difficult to fund and enforce public policies that substitute private financial transactions, and more appealing to deregulate financial markets. We propose a simple theoretical model of such policy-mediated relationships between trade and financial development. Empirically, we document in a country panel dataset that, before the 2007-08 crisis, financial market volumes were robustly and negatively related to the share of government consumption in GDP in regressions that also include indicators of financial regulation and trade openness, and we seek support for a causal interpretation of this result in instrumental variable specifications.
    Keywords: financial reforms; government size; openness; private credit
    JEL: E60 F13 G18
    Date: 2013–02
  4. By: Padro, Gerard; Qian, Nancy; Yao, Yang
    Abstract: This study examines how the economic effects of elections in rural China depend on voter heterogeneity, for which we proxy with religious fractionalization. We first document religious composition and the introduction of village-level elections for a nearly nationally representative sample of over two hundred villages. Then, we examine the interaction effect of heterogeneity and the introduction of elections on village-government provision of public goods. The interaction effect is negative. We interpret this as evidence that voter heterogeneity constrains the potential benefits of elections for public goods provision.
    Keywords: Democracy; Fractionalization; Pre-Conditions; Religion; Voter Heterogeneity
    JEL: O1 P1
    Date: 2013–01
  5. By: Araujo, Luis; Guimarães, Bernardo
    Abstract: This paper studies how constraints on the timing of actions affect equilibrium in intertemporal coordination problems. We show that while the possibility of waiting longer for others'’ actions helps agents to coordinate in the good equilibrium, the option of delaying one’s' actions harms coordination and can induce severe coordination failures: if agents are very patient, they might get arbitrarily low expected payoffs even in cases where coordination would yield arbitrarily large returns. The risk-dominant equilibrium of the corresponding one-shot game is selected when the option to delay effort is commensurate with the option to wait longer for others’' actions. In an application to innovation processes, we show that protection of the domestic industry might hinder industrialization. We also argue that increased competition might have spurred the emergence of shadow banking in the last few decades.
    Keywords: coordination failures; delay; option; strategic complementarities
    JEL: C72 C73 D84
    Date: 2013–01
  6. By: David Stadelmann; Benno Torgler
    Abstract: Using a natural voting experiment in Switzerland that encompasses a 160-year period (1848–2009), we investigate whether a higher level of complexity leads to increased reliance on expert knowledge. We find that when more referenda are held on the same day, constituents are more likely to refer to parliamentary recommendations in making their decisions. This finding holds true even when we narrow our focus to referenda with a relatively lower voter turnout on days on which more than one referendum was held. We also show that when constituents face a higher level of complexity, they listen to parliament rather than interest groups.
    Keywords: Bounded rationality, voting, referenda attention, rules of thumb
    JEL: D03 D72 D83 H70
    Date: 2013–03–14
  7. By: Rebecca B. Morton; Daniel P. Mueller; Lionel Page; Benno Torgler
    Abstract: We exploit a voting reform in France to estimate the causal effect of exit poll information on turnout and bandwagon voting. Before the change in legislation, individuals in some French overseas territories voted after the election result had already been made public via exit poll information from mainland France. We estimate that knowing the exit poll information decreases voter turnout by about 12 percentage points. Our study is the first clean empirical design outside of the laboratory to demonstrate the effect of such knowledge on voter turnout. Furthermore, we find that exit poll information significantly increases bandwagon voting; that is, voters who choose to turn out are more likely to vote for the expected winner.
    Date: 2013–03–14
  8. By: Konrad, Kai A.; Lohse, Tim; Qari, Salmai
    Abstract: We consider a lie-catching experiment with 9240 judgements. A set of videotapes shows subjects participating in a tax compliance experiment. The subjects chose whether or not to misreport. Subjects knew that underreporters were chosen for an audit with some probability. An audit led to detection and to a punishment fee. This compliance framework induced only persons with high deceptive abilities to underreport and, so, caused self-selection. Among the students who judged these videos, we find that the deception detection rate was significantly below 50 percent and even lower if the self-selection pressure in the tax compliance experiment was higher. This suggests that, when subjects can choose whether to state the truth or to lie, there is a self-selection effect by which individuals with higher deceptive ability are more likely to lie.
    Keywords: Decision making; Interpersonal interaction; Judgment; Perception
    JEL: D83 H26
    Date: 2013–03
  9. By: Dessein, Wouter; Galeotti, Andrea; Santos, Tano
    Abstract: We examine the allocation of scarce attention in team production. Each team member is in charge of a specialized task, which must be adapted to a privately observed shock and coordinated with other tasks. Coordination requires that agents pay attention to each other, but attention is in limited supply. We show that when attention is scarce, organizational focus and leadership naturally arise as a response to organizational trade-offs between coordination and adaptation. At the optimum, all attention is evenly allocated to a select number of "leaders." The organization then excels in a small number of focal tasks at the expense of all others. Our results shed light on the importance of leadership, strategy and “core competences,” as well as new trends in organization design. We also derive implications for the optimal size or “scope” of organizations. Surprisingly, improvements in communication technology may result in smaller but more adaptive organizations.
    Keywords: Attention; Coordination; Core competencies; Leadership; Organization Size; Organizational Design; Organizational Strategy
    JEL: D2 D83 D85 L2
    Date: 2013–03
  10. By: Leila Baghdadi (Tunis Business School); Rihab Bellakhal (Ecole Polytechnique of Tunis); Marc-Arthur Diaye (University of Evry Val d’Essonne)
    Abstract: Several papers report a positive effect of financial participation (profit-sharing, employee share ownership) on firms’ economic performance. This increase can be obtained in two main ways: by increasing the effort (extrinsic, intrinsic or commitment) of workers, directly or indirectly through worker selection; or by transferring more risk to the workers. The question is of course not neutral. Indeed if the risk transfer story is true then it means that the increase of economic performance is obtained at the expense of workers, who support more risks. The question is especially important in France where financial participation is associated with tax exemption for firms and where it is forbidden by law to substitute base wage and profit sharing. The purpose of our paper is to use three French data sets (an employer-employee data set- and two employer panel data sets), to answer the question of whether financial participation schemes are mainly designed as a risk transfer (from firms to workers) device.
    Keywords: Profit-sharing, ESOP, wage, risk sharing
    JEL: M52 J33
    Date: 2012–06
  11. By: Speer, Johanna; Vásquez, William F.
    Abstract: The purpose of the research summarized in this paper is to provide policy-relevant knowledge on the governance of rural services in Guatemala and thus to contribute to improving the provision of services that are essential for agricultural and rural development. Based on quantitative and qualitative primary data, we examine how services are actually provided today and how community preferences and participation affect service provision in rural Guatemala. Our main finding is that the provision of formally decentralized services by local governments is incomplete.
    Keywords: public services; community involvement; rural areas; Participation; community-based development;,
    Date: 2013
  12. By: Wollni, Meike; Andersson, Camilla
    Abstract: In low potential agricultural areas like the Honduran hillsides characterized by soil degradation and erosion, organic agriculture can provide a means to break the downward spiral of resource degradation and poverty. We use original survey data to analyze the factors influencing the decision to convert to organic agriculture. Previous studies have emphasized the role of spatial patterns in the diffusion and adoption of agricultural technologies in general and organic agriculture in particular. These spatial patterns can result from a variety of underlying factors. In this article we test various potential explanations, including the availability of information in the farmer's neighborhood, social conformity concerns and perceived positive external effects of the adoption decision, in a spatially explicit adoption model. We find that farmers who believe to act in accordance with their neighbors' expectations and with greater availability of information in their neighborhood network are more likely to adopt organic agriculture. Furthermore, perceived positive productivity spillovers to neighboring plots decrease the probability of adoption. We discuss the implications of our findings for the dissemination of sustainable agricultural technologies in low-potential agricultural areas in developing countries.
    Keywords: neighborhood effects, social conformity, spatial autoregressive probit model, organic agriculture, technology adoption, Central America, Agricultural and Food Policy, International Development, Land Economics/Use, Production Economics, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods, O13, O33, Q12, Q16,
    Date: 2013–03
  13. By: Márcia Oliveira (FEP, Faculdade de Economia da Universidade do Porto, and LIAAD/INESC TEC); Dalila B. M. M. Fontes (FEP, Faculdade de Economia da Universidade do Porto, and LIAAD/INESC TEC); Teresa Pereira (IPP/ESEIG, Escola Superior de Estudos Industriais e de Gestão, Instituto Politécnico do Porto)
    Abstract: Multi-criteria decision analysis (MCDA) has been one of the fastest-growing areas of operations research during the last decades. The academic attention devoted to MCDA motivated the development of a great variety of approaches and methods within the field. These methods distinguish themselves in terms of procedures, theoretical assumptions and type of decision addressed. This diversity poses challenges to the process of selecting the most suited method for a specific real-world decision problem. In this paper we present a case study in a real-world decision problem arising in the painting sector of an automobile plant. We tackle the problem by resorting to the well-known AHP method and to the MCDA method proposed by Pereira and Fontes (2012) (MMASSI). By relying on two, rather than one, MCDA methods we expect to improve the confidence and robustness of the obtained results. The contributions of this paper are twofold: first, we intend to investigate the contrasts and similarities of the results obtained by distinct MCDA approaches (AHP and MMASSI); secondly, we expect to enrich the literature of the field with a real-world MCDA case study on a complex decision making problem since there is a paucity of applied research work addressing real decision problems faced by organizations.
    Keywords: AHP, Decision Making, Multicriteria Decision Analysis, Multicriteria Methodology, Automobile Industry
    JEL: M11 C44
    Date: 2013–02
  14. By: Carlos Seixas (Faculty of Economics, University of Porto, and CEF.UP); António Brandão (Faculty of Economics, University of Porto, and CEF.UP); Manuel Luís Costa (Faculty of Economics, University of Porto, and CEF.UP)
    Abstract: The main question addressed in the model regards which type of incentives an elected politician has to choose good or bad policies. In order to answer it, we focus on two inefficiencies, recently considered in the literature: the down-up problem and voters having bias beliefs and voting retrospectively. Moreover, we consider that the politician receives utility from holding office and from the success of his projects and, as to his policy platform choice; he can choose any combination of bad (yet popular) policies and good (yet less popular) policies. We are able to show that politicians can choose good long term policy platforms even when those policies have bad short term results. Motivation regarding the success of the projects or an incumbent bias tends to induce the politician to implement a good policy. Unclear responsibilities or campaign promises will have mixed effects on the type of policy implemented.
    Keywords: Policy choice; Elections; Voting behavior; Retrospective voting; Biased beliefs; Down-up problem
    JEL: D72 D78 D83 D90 P16
    Date: 2013–02
  15. By: De Valck, Jeremy; Vlaeminck, Pieter; Liekens, Inge; Aertsens, Joris; Chen, Wendy; Vranken, Liesbet
    Abstract: Due to the steady reduction of nature sites in urbanised regions, nature restoration projects are now a focal point of public interest. Policy-makers are required to balance public preferences for nature sites, with the high costs of nature restoration projects. Landscape preferences are, in general, positively correlated with ecological preferences. However this relationship is far from straightforward. Past studies show that different factors, such as personal, site-specific and spatial characteristics, influence preferences, while at the same time, little is known about the relative importance of these factors. This article proposes a conceptual approach for gaining insights into preference heterogeneity, in the context of stated preference environmental valuation studies. We conduct a choice experiment at the Drongengoed (Belgium); an afforested heathland with a diversified mosaic of natural habitats. The experiment determines public preferences towards nature restoration scenarios and illustrates the public’s willingness-to-pay for a change from the current state to a scenario with less coniferous trees, higher biodiversity and good maintaining of accessibility. Area-specific and socio-demographic characteristics are controlled for and affect the preferences for certain types of nature restoration scenarios. Preference heterogeneity is also observed for most of the choice attributes, suggesting that more sophisticated modelling methods are needed.
    Keywords: choice experiment, nature, restoration, ecosystem services, preference heterogeneity, Environmental Economics and Policy,
    Date: 2012
  16. By: Siklós, Balazs; Gawlik, Remigiusz
    Abstract: Abstract: The notion of quality became a buzzword in today’s debates about higher education. But despite its popularity, there are still many uncertainties and misinterpretations. In our paper we take a look at most popular models of quality. We describe the specific features of higher education and their impacts on the use of quality models. We take a look at quality assurance models as well, and argue that due to the nature of quality, institutional quality assurance is a tool with dubious efficiency. We neither forget the role of appropriate scholarship distribution in assuring possibly optimal efficiency and quality of higher education programmes
    Keywords: Quality, Higher Education, Scholarship Distribution, Public Decision Making
    JEL: I21 I25 I29
    Date: 2013
  17. By: Guemmegne, Juliette; Pongou, Roland
    Abstract: We offer a policy basis for interpreting, justifying, and designing (3,3)-political rules, a large class of collective rules analogous to those governing the selection of papers in peer-reviewed journals, where each referee chooses to accept, reject, or invite a resubmission of a paper, and an editor aggregates his own and referees' opinions into one of these three recommendations. We prove that any such rule is a weighted multicameral rule: a policy is collectively approved at a given level if and only if it is approved by a minimal number of chambers- the dimension of the rule-, where each chamber evaluates a different aspect of the policy using a weighted rule, with each evaluator's weight or authority possibly varying across chambers depending on his area(s) of expertise. Conversely, it is always possible to design a rule under which a policy is collectively approved at a given level if and only if it meets a certain number of predefined criteria, so that one can set the standards for policies first, and then design the rules that justify the passage of policies meeting those standards. These results imply that a given rule is only suitable for evaluating finite-dimensional policies whose dimension corresponds to that of the rule, and they provide a rationale for using different rules to pass different policies even within the same organization. We further introduce the concept of compatibility with a rule, and use it to propose a method to construct integer weights corresponding to evaluators' possible judgments under a given rule, which are more intuitive and easier to interpret for policymakers. Our findings shed light on multicameralism in political institutions and multi-criteria group decision-making in the firm. We provide applications to peer review politics, rating systems, and real-world organizations.
    Keywords: (3,3)-political rules, multicameralism, multi-criteria group decision-making, decentralized authority, rule suitability and design
    JEL: D71 D72 H40 K10
    Date: 2013–04–09
  18. By: Gianmarco León
    Abstract: Electoral institutions that encourage citizens to vote are widely used around the world. Yet little is known about the effects of such institutions on voter participation and the composition of the electorate. In this paper, I combine a field experiment with a change in Peruvian voting laws to identify the effect of monetary (dis-)incentives on voting. Using the random variation in the fine for abstention and an objective measure of turnout at the individual level, I estimate the elasticity of voting with respect to cost to be -0.21. Consistent with the theoretical model presented, the reduction in turnout induced by the reduction in the fine is driven by voters who (i) are in the center of the political spectrum, (ii) are less interested in politics, and (iii) hold less political information. However, voters who respond to changes in the cost of abstention do not have different preferences for policies than those who vote regardless of the cost. Further, involvement in politics, as measured by the decision to acquire political information, seems to be independent of the level of the fine. Additional results indicate that the reduction in the fine does not affect the incidence of vote buying, but increases the price paid for a vote.
    Keywords: Voting Behavior; Incentives to Vote, Public Choice, Perú.
    JEL: D71 D72 O53
    Date: 2013–03
  19. By: Konrad, Kai A.; Cusack, Thomas R.
    Abstract: What is the strategic role of membership in an intergovernmental group with unanimity requirements if the group negotiates with an external player in a setting with incomplete information? Being in such a group has a strategic effect compared to negotiating as a stand-alone player and reduces the demands of the outside player: being in a group lends additional bargaining power. Negotiating as a group may also cause more inefficiencies due to bargaining failure, and this might harm the intergovernmental group. We uncover the role of preference alignment and preference independence between members of the coalition group for equilibrium payoffs and welfare effects. In this analysis we also distinguish between coalition groups with and without side payments. Overall, coalition groups tend to perform well for the members of the coalition group in comparison to fully decentralized negotiations, particularly if the objectives of the members of the coalition group are not always perfectly aligned. --
    Keywords: bargaining,incomplete information,coalitions,groups,strategic bargaining power
    JEL: F51 F53 F59
    Date: 2013

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