New Economics Papers
on Collective Decision-Making
Issue of 2013‒04‒27
seventeen papers chosen by
Stan C. Weeber, McNeese State University

  1. A Political Theory of Populism By Daron Acemoglu; Georgy Egorov; Konstantin Sonin
  2. Members of German Federal Parliament More Risk-Loving than General Population By Moritz Heß; Christian von Scheve; Jürgen Schupp; Gert G. Wagner
  3. Benchmarking Politicians By Antonio Estache; Renaud Foucart
  4. Institutional Change in Advanced European Democracies: an exploratory assessment By Camille Bedock; Peter Mair and Alex Wilson
  5. Seat competitiveness and redistricting: Evidence from voting on municipal mergers By Janne Tukiainen; Tuukka Saarimaa
  6. Assessing the effectiveness of multistakeholder platforms: Agricultural and rural management councils in the Democratic Republic of the Congo By Badibanga, Thaddée; Ragasa, Catherine; Ulimwengu, John M.
  7. Compliant sinners, obstinate saints: How power and self-focus determine the effectiveness of social influences in ethical decision making By Marko Pitesa; Stefan Thau
  8. Discrete Choice Decision-Making with Multiple Decision Makers within the Household By André De Palma; Nathalie Picard; Ignacio Inoa
  9. Does Social Judgment Diminish Rule Breaking? By Timothy C. Salmony; Danila Serra
  10. Shrouded Costs of Government: The Political Economy of State and Local Public Pensions By Edward L. Glaeser; Giacomo A. M. Ponzetto
  11. Testing for Fictive Learning in Decision-Making Under Uncertainty By Oliver Bunn; Caterina Calsamiglia; Donald Brown
  12. Leadership and incentives. By Cappelen, Alexander W.; Reme, Bjørn-Atle; Sørensen, Erik Ø.; Tungodden, Bertil
  13. Board Games: Timing of Independent Directors’ Dissent in China By Juan Ma; Tarun Khanna
  14. Commitment Problems in Conflict Resolution. By Erik O. Kimbrough; Jared Rubin; Roman M. Sheremeta; Timothy Shields
  15. Predictors of mobile internet usage in 10 African countries By Calandro, Enrico; Wang, Rong
  16. Uncertainty and decision in climate change economics By Geoffrey Heal; Antony Millner
  17. Adding Ideology to the Equation: New Predictions for Election Results under Compulsory Voting By Fernanda L L de Leon

  1. By: Daron Acemoglu; Georgy Egorov; Konstantin Sonin
    Date: 2013–04–11
  2. By: Moritz Heß; Christian von Scheve; Jürgen Schupp; Gert G. Wagner
    Abstract: The article analyzes the question of whether career politicians differ systematically from the general population in terms of their attitudes toward risk. A written survey of members of the 17th German Bundestag in late 2011 identified their risk attitudes, and the survey data was set in relation to respondents to the German Socio-Economic Panel Study (SOEP) for the survey year 2009 (2002 through 2012). Compared with the population surveyed in the SOEP, members of the German parliament display a considerably higher general risk appe-tite, which is highly significant. For different areas of risk, last surveyed in the SOEP in 2009, the members of parliament had significantly stronger risk-loving attitudes across vir-tually all indicators and risk categories surveyed than the comparison groups of SOEP re-spondents.
    Keywords: political decision-making, risk aversion, German parliament, SOEP
    JEL: D71 D78 H11 H70 P16 Z13
    Date: 2013
  3. By: Antonio Estache; Renaud Foucart
    Abstract: We study a political system in which voters can optimally pick between political platforms,but cannot screen the quality of individual politicians associated with these platforms.A bad individual achievement can correspond to either incompetence (adverse selection) orcorruption (moral hazard). Information could improve, if independent experts assess achievementsas compared to commitments, allowing independent judges to investigate possible corruption.We find that while good experts are always beneficial as they increase transparency,the impact of the quality of judges is ambiguous. Above a threshold, with risk-averse socialplanners, good judges increase the incentive-compatible punishment of politicians, at the costof possible judiciary mistakes.
    Date: 2013–04
  4. By: Camille Bedock; Peter Mair and Alex Wilson
    Abstract: Recent decades have seen a wave of institutional changes of the core democratic rules in advanced democracies. These changes include reforms of electoral systems; decentralization of power to sub-national governments; the creation or enhancement of direct-democratic institutions; a rise in public subsidies to political parties; and shifts in the balance of power between executive and legislature. Nevertheless, political science has developed a limited understanding of what explains institutional change in democracies that are already consolidated. This is partly due to the lack of comparative data on the subject, with most studies of institutional change focusing on a single country, or on a single type of reform (e.g. electoral system change). Our paper seeks to bridge this gap by presenting the preliminary findings of an international research project that compared seven dimensions of institutional change in 18 consolidated European democracies between 1990 and 2008, producing a unique dataset whose content has been fully verified by national experts. This dataset provides the empirical basis for evaluating the type and extent of institutional change in consolidated European democracies, as well as developing hypotheses about the motivations and calculations behind these reforms.
    Date: 2012–11–15
  5. By: Janne Tukiainen; Tuukka Saarimaa
    Abstract: We analyze how (anticipated) changes in the competitiveness of the seats of municipal councilors affect their voting behavior over municipal mergers. The competitiveness of the seats changes because the merger changes the composition of political competitors and the number of available seats in the next election. We use this variation for identification and find that the smaller the increase in the competitiveness of a councilor's seat, the more likely he is to vote for the merger. These effects are not related to the behavioral responses of the voters, but arise from the councilors? desire to avoid electoral competition.
    Keywords: Seat competitiveness, local politics, municipal mergers
    JEL: D72 C36 C35 C34 H77 H11
    Date: 2013–03–24
  6. By: Badibanga, Thaddée; Ragasa, Catherine; Ulimwengu, John M.
    Abstract: This paper analyzes the effectiveness of local-level (territory) multistakeholder platforms using data from 55 CARGs in 23 randomly selected territories in three provinces (Bandundu, Bas-Congo, and Kinshasa) of the DRC. The first CARG was established in 2008, and the survey was conducted three years later, from August to October 2011.
    Keywords: multistakeholder governance; Agricultural policies; Participatory development; Participation;,
    Date: 2013
  7. By: Marko Pitesa (GEM - Grenoble Ecole de Management - Grenoble École de Management (GEM)); Stefan Thau (LBS - London Business School - London Business School)
    Abstract: In this research, we examine when and why organizational environments influence how employees respond to moral issues. Past research proposed that social influences in organizations affect employees' ethical decision making, but did not explain when and why some individuals are affected by the organizational environment and some disregard it. To address this problem, we drew on research on power to propose that power makes people more self-focused, which, in turn, makes them more likely to act upon their preferences and ignore (un)ethical social influences. Using both experimental and field methods, we tested our model across the three main paradigms of social influence: informational influence (Study 1 and 2), normative influence (Study 3), and compliance (Study 4). Results offer converging evidence for our theory.
    Keywords: ethical decision making, power, social influences, self-focus
    Date: 2013–06–03
  8. By: André De Palma (ENS Cachan - Ecole Normale Supérieure de Cachan - École normale supérieure de Cachan - ENS Cachan); Nathalie Picard (THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise); Ignacio Inoa (THEMA - Théorie économique, modélisation et applications - CNRS : UMR8184 - Université de Cergy Pontoise)
    Abstract: There is still a long way to achieve the goal of providing a theoretical and empirical framework to model and apply economics of the family. Decision-making within the family has been neglected too long in transportation. Two special issues by Bhat and Pendyala, 2005 and by Timmermans and Junyi Zhang, 2009 provide the most notable exceptions. The objective of this paper is to set-up a flexible framework to discuss the development of integrated transportation models involving interacting and interdependent actors; updating previous reviews from the point of view of economics of the family . Transportation is very keen to have access to this type of models, since their applications are numerous. Let mention, for example, residential location choice, workplace choice, car ownership, choice of children's school, mode choice, departure time choice activity patterns and the like. The (non unitary) economics of the family models are totally different models, which do not merely extend existing discrete choice models. They introduce new concepts, which are specific to within family interactions: negotiation, altruism, or repeated interaction and Pareto optimality. This review is completed with the study of different types of accessibility measures including recent work on time-geography measures of accessibility.
    Date: 2013–04–12
  9. By: Timothy C. Salmony; Danila Serra
    Abstract: We experimentally investigate the extent to which social observability of one’s actions and the possibility of social non-monetary judgment affect the decision to engage in rule breaking behavior. We consider three rule breaking scenarios — theft, bribery and embezzlement — in the absence of any formal enforcement mechanism. By involving a student sample characterized by cultural heterogeneity due to immigration of ancestors to the US, we are able to investigate whether the effectiveness of informal social enforcement mechanisms is conditional on the cultural background of the decision-maker. A total of 52 countries are represented in our sample, ranging from Low Rule of Law countries such as Liberia and Nigeria to High Rule of Law countries such as Sweden and Norway. Our data provide evidence that people with different cultural backgrounds do respond differently to increased social observability of their actions. In particular, while subjects that identify culturally with a High Rule of Law country respond to social obervability and judgment by lowering their propensities to engage in rule breaking, subjects that identify with Low Rule of Law countries do not. Our findings suggest that development policies that rely purely on social judgment to enforce behavior may not work with Low Rule of Law populations.
    Keywords: Theft;Corruption; Social Enforcement; Culture; Experiments
    JEL: C90 D73 K42 Z10
    Date: 2013
  10. By: Edward L. Glaeser; Giacomo A. M. Ponzetto
    Abstract: Why are public-sector workers so heavily compensated with pensions and other non-pecuniary benefits? In this paper, we present a political economy model of shrouded compensation in which politicians compete for taxpayers' and public employees' votes by promising compensation packages, but some voters cannot evaluate every aspect of compensation. If pension packages are "shrouded," meaning that public-sector workers better understand their value than ordinary taxpayers, then compensation will be inefficiently back-loaded. In equilibrium, the welfare of public-sector workers could be improved, holding total public sector costs constant, if they received higher wages and lower pensions. Central control over dispersed municipal pensions has two offsetting effects on pension generosity: more state-level media attention helps taxpayers better understand pension costs, which reduces pension generosity; but a larger share of public sector workers will live within the jurisdiction, which increases pension generosity. We discuss pension arrangements in two decentralized states (California and Pennsylvania) and two centralized states (Massachusetts and Ohio) and find that in these cases, centralization appears to have modestly reduced pension arrangements; but, as the model suggests, this finding is unlikely to be universal.
    JEL: H55 H75
    Date: 2013–04
  11. By: Oliver Bunn; Caterina Calsamiglia; Donald Brown
    Date: 2013–04–11
  12. By: Cappelen, Alexander W. (Dept. of Economics, Norwegian School of Economics and Business Administration); Reme, Bjørn-Atle (Dept. of Economics, Norwegian School of Economics and Business Administration); Sørensen, Erik Ø. (Dept. of Economics, Norwegian School of Economics and Business Administration); Tungodden, Bertil (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: We study whether compensating people who volunteer to be leaders in a public goods game creates a social crowding-out effect of moral motivation among the others in the group. We report from an experiment with four treatments, where the base treatment is a standard public goods game with simultaneous contribution decisions, while the three other treatments allowed participants to volunteer to be an “early contributor” in their group. In the three leader treatments, we manipulate the level of compensation given to the leader. Our main finding is that a moderate compensation to the leader is highly beneficial, it increases the average contribution by almost 80%. A high compensation, however, is detrimental to public good provision. We show that paying a moderate compensation to the leaders strikes the right balance between the need for recruiting leaders and avoiding a large social crowding-out effect. We argue that the main findings of the paper are important in many real life settings where we would like to use economic incentives to encourage people to lead by example.
    Keywords: Voluntariness; Group behavior; Public goods; Laoratory.
    JEL: C72 C92 H41
    Date: 2013–04–12
  13. By: Juan Ma (Harvard Business School); Tarun Khanna (Harvard Business School, Strategy Unit)
    Abstract: This paper examines the circumstances under which so-called "independent" directors voice their independent views on public boards in a sample of Chinese firms. Controlling for firm and board characteristics, we find that independent directors' dissent is associated with breakdown of directors' interpersonal ties with board chairpersons who locate at the center of the board bureaucracy in China. In particular, independent directors tend to "time" their dissent into a restricted set of socially-appropriate circumstances, either when the board chairperson who appoints the independent director has left the board, or when the voting occurs at the end of board "games" that corresponds to a 60-day window prior to departure of the board chairperson or departure of the independent director herself. The endgame effect is particularly strong: 27% of the dissent was issued at board "endgames" which represent merely 4% of independent directors' average tenure. While directors with foreign experience are more likely to dissent, we do not find that academics, accounting and law professionals are significantly more active. We also show that dissent is consequential, to the director and the firm. Although dissent has no significant marginal effect on the total number of board seats received subsequently by an independent director, it significantly increases the chance for a director to exit the director labor market. Firms suffer an economically and statistically significant cumulative abnormal return of -0.97% around announcement of dissent. Literature has suggested that dissent might be reflecting of diverse viewpoints, perhaps beneficial in and of itself through reducing variability of firm performance, however we do not find this offsetting beneficial effect to be strong.
    JEL: G3
    Date: 2013–04
  14. By: Erik O. Kimbrough (Simon Fraser University); Jared Rubin (Chapman University); Roman M. Sheremeta (Chapman University); Timothy Shields (Chapman University)
    Abstract: Commitment problems are inherent to non-binding conflict resolution mechanisms, since an unsatisfied party can ignore the resolution and initiate conflict. We provide experimental evidence suggesting that even in the absence of binding contractual agreements individuals often avoid conflict by committing to the outcome of a conflict resolution mechanism. Commitment problems are mitigated to a greater extent for groups who opt-in to the conflict resolution mechanism, but only when opting-in is costly. Although conflict rates are higher when opting-in is costly than when it is free or exogenously imposed, commitment problems are greatly reduced amongst those groups who choose to opt-in.
    Keywords: conflict resolution, commitment problem, opting-in, contests, experiments
    JEL: C72 C91 D72
    Date: 2013
  15. By: Calandro, Enrico; Wang, Rong
    Abstract: Mobile phones and Internet use can enable human capabilities that can contribute to positive developmental outcomes (Smith, Spencer, & Rashid, 2011; Ndung'u & Waema, 2011; Agüero, de Silva & Kang, 2011; Sen, 1999). Communication networks, in Africa particularly mobile phones, have been recognised as an important component for social mobilisation (Castells, 2009). Reports have focused on the role of mobile phones in organising social protests and political mobilization (Comninos, 2011) such as the food protest in Mozambique in 2007/08, and violent ethnic mobilisation in Kenya in 2009 and around the world. Further, since the Arab Spring, the use of the mobile phone for social mobilization has become an increasing focus of research. As part of this research which seeks to explore the role of ICTs in contemporary social and political engagement, this paper presents an empirical assessment of predominant social and demographic factors that are predictors of mobile Internet usage. It is based on nationally representative ICT household survey data collected by Research ICT Africa in 2011 and 2012 across 10 African countries. This study draws on previous studies on technology adoption, and tests on the effect of social factors and demographic variables on mobile Internet usage. Also, it presents descriptive data on network exposure. It poses the following research questions: what are the social aspects and demographic factors influencing mobile Internet usage in selected African countries? To what extent does belonging to specific civic affiliations such as religious, recreational or political groups impact on mobile Internet usage? The odd of using mobile Internet is assessed against demographic factors such as age, gender, income and level of education, among others. The impact of mobile Internet usage for social mobilisation is evaluated against belonging to specific social affiliations such as religious, recreational or political organisations. Other predictors include affiliation with certain social groups and the closeness of the local community. Network exposure was measured in the ICT household surveys, by asking respondents to list how many people out of their top five contacts are users of mobile phones and social network sites. Further, the analysis includes also an assessment of whether the use of the mobile phone increased or decreased contacts with specific social groups. What activities users got involved in through the mobile are also included into the analysis. The study concludes with policy implications on mobile Internet usage in African countries in particular related to democracy, empowerment and capability development. Furthermore, since it investigates whether mobile Internet usage enhances contacts with different social groups such as family, friends, religious or political groups, this study seeks to assess the potential of the technology to mobilise different networks in selected African countries. --
    Keywords: ICT indicators,Access,Mobile Internet,Social Media,ICT Household Survey,ICTD
    Date: 2012
  16. By: Geoffrey Heal; Antony Millner
    Abstract: Uncertainty is intrinsic to climate change: we know that the climate is changing, but not precisely how fast or in what ways. Nor do we understand fully the social and economic consequences of these changes, or the options that will be available for reducing climate change. Furthermore the uncertainty about these issues is not readily quantified and expressed in probabilistic terms: we are facing deep uncertainty or ambiguity rather than risk in the classical sense, rendering the classical expected utility framework of limited value. We review the sources of uncertainty about all aspects of climate change and resolve these into various components, commenting on their relative importance. Then we review decision-making frameworks that are appropriate in the absence of quantitative probabilistic information, including non-probabilistic approaches and those based on multiple priors, and discuss their application in climate change economics.
    Date: 2013–03
  17. By: Fernanda L L de Leon (University of East Anglia)
    Abstract: This paper provides new predictions for compulsory elections, taking into consideration the differences in ideological views between compulsory and voluntary voters. Having explored Brazil's dual voting system, I predict changes in Americans' preferences and estimate a voting model applied to US senatorial elections. I find that, if the current voting population had ideological preferences of a compulsory electorate, Democrats would gain 8.7 percentage points in their vote shares and win 68% of the elections. Moreover, candidates that are voted for less would be the ones that gain more votes under compulsory elections, while this system would be most detrimental for highly voted-for candidates. Another consequence includes the candidates' reaction while converging in the ideological spectrum.
    Date: 2013–04

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