New Economics Papers
on Collective Decision-Making
Issue of 2013‒08‒05
eighteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Voting Alone? The Political and Cultural Consequences of Commercial TV By Ruben Durante; Paolo Pinotti; Andrea Tesei
  2. Complexity of Optimal Lobbying in Threshold Aggregation By Ilan Nehama
  3. Ethnic Concentration and Extreme Right-Wing Voting Behavior in West Germany By Verena Dill
  4. Partisan politics : parties, primaries and elections By Agustín Casas
  5. Conflict, evolution, hegemony, and the power of the state By David K. Levine; Salvatore Modica
  6. Rule Rationality By Heller, Yuval; Winter, Eyal
  7. Leadership, Information, and Risk Attitude: A Game Theoretic Approach By John T. Kulas; Mana Komai; Saint Cloud State University; Philip J. Grossman
  8. Logistic Regression for Extremely Rare Events: The Case of School Shootings By Christian Westphal
  9. Herd behavior in consumer inflation expectations - Evidence from the French household survey By Andreas Karpf
  10. Development and institutionalization of communitarian thought in Thailand By Shigetomi, Shinichi
  11. Corruption, Accountability and Efficiency. An Application to Municipal Solid Waste Services By Graziano Abrate; Federico Boffa; Fabrizio Erbetta; Davide Vannoni
  12. Search, Project Adoption and the Fear of Commitment By Sidartha Gordon; Talia Bar; Vidya Atal
  13. Moonlighting Politicians: Motivation Matters! By Fedele, Alessandro; Naticchioni, Paolo
  14. Egalitarian Equivalence And Strategyproofness In The Queueing Problem By Youngsub Chun; Manipushpak Mitra; Suresh Mutuswami
  15. Optimal Information Disclosure: Quantity vs. Quality By Anton Kolotilin
  16. Framing moral markets: The cultural legacy of social movements in an emerging market category By Schiller-Merkens, Simone
  17. Justice under uncertainty By Riedl A.M.; Cettolin E.
  18. Collective action and community development : evidence from self-help groups in rural India By Desai, Raj M.; Joshi, Shareen

  1. By: Ruben Durante (Département d'économie); Paolo Pinotti; Andrea Tesei
    Abstract: We investigate the long-term impact of early exposure to Berlusconi’s commercial TV network, Mediaset, on voting behavior and civic engagement in Italy. To do so, we exploit differences in Mediaset signal reception across Italian municipalities due to the network’s staggered introduction over the national territory and to idiosyncratic geomorphological factors. We find that municipalities exposed to Mediaset prior to 1985 exhibit greater electoral support for Berlusconi’s party in 1994, when he first ran for office, relative to municipalities that were exposed only later on. This difference, estimated between 1 and 2 percentage points, is extremely robust and tends to persist in the following four elections. This effect can hardly be attributed to differential exposure to partisan news bias since, prior to 1985, content on Mediaset channels was dominated by light-entertainment programs and no news programs were broadcast until 1991, by which time the network was accessible to the entire population. Instead, we present evidence that early exposure to commercial TV was associated with a substantial decline in social capital consistent with the diffusion of a culture of individualism and civic disengagement that favored the political success of Berlusconi.
    Keywords: mass media, voting, civic engagement
    JEL: L82 D72 Z13
    Date: 2013–06
  2. By: Ilan Nehama (The Hebrew University of Jerusalem, Israel)
    Abstract: Optimal Lobbying is the problem a lobbyist or a campaign manager faces in a full-information voting scenario of a multi-issue referendum when trying to influence the result. The Lobby is faced with a profile that specifies for each voter and each issue whether the voter approves or rejects the issue, and seeks to find the smallest set of voters it must influence to change their vote, for a desired outcome to be obtained. This computational problem also describes problems arising in other scenarios of aggregating complex opinions, such as principal-agents incentives scheme in a complex combinatorial problem, and bribery and manipulation in Truth-Functional Judgement Aggregation. We study the computational complexity of Optimal Lobbying when the issues are aggregated using an anonymous monotone function and the family of desired outcomes is an upward-closed family. We analyze this problem with regard to two parameters: the minimal number of supporters needed to pass an issue, and the size of the maximal minterm of the desired set. We show that for the extreme values of the parameters, the problem is tractable, and provide algorithms. On the other hand, we prove intractability of the problem for the non-extremal values, which are common values for the parameters.
    Date: 2013–07
  3. By: Verena Dill
    Abstract: Using data from the German Socio-Economic Panel (SOEP) and administrative data from 1996 to 2009, I investigate the question whether or not right-wing extremism of German residents is affected by the ethnic concentration of foreigners living in the same residential area. My results show a positive but insignificant relationship between ethnic concentration at county level and the probability of extreme right-wing voting behavior for West Germany. However, due to potential endogeneity issues, I additionally instrument the share of foreigners in a county with the share of foreigners in each federal state (following an approach of Dustmann/Preston 2001). I find evidence for the interethnic contact theory, predicting a negative relationship between foreigners’ share and right-wing voting. Moreover, I analyze the moderating role of education and the influence of cultural traits on this relationship.
    Keywords: Ethnic concentration, extreme right-wing voting, group threat, interethnic contact
    JEL: D72 R23 J15
    Date: 2013
  4. By: Agustín Casas
    Abstract: Parties' candidates are chosen by different nomination rules. Recent empirical evidence shows that these rules influence the attributes of the nominees; for instance, open primaries in the U.S. choose more extreme candidates than closed primaries. Despite this evidence, the literature does not provide an explanation of why appealing to a more moderate electorate -as during open primariesresults in more extreme candidates. I build a model that shows that open primaries elect \predictable extremists", while, for instance, party leaders would chose \moderate mavericks". I obtain these results through a model that puts together 3 pieces of partisan politics: affiliation decisions, nomination rules, and an observed endogenous valence, which (together with party membership) signals the candidates' ideologies. Moreover, I investigate the welfare implications of three methods: nomination by the party leader, by closed primaries, and by open primaries. I show the conditions under which nomination by party leaders leads to higher social welfare than nomination by open primaries. Furthermore, I show that higher screening by parties, leads to more ideologically uncertain candidates. In sum, I argue that party affiliation decisions, and endogenous valence play a large role in understanding the effects of nomination rules on the political equilibria.
    Date: 2013–07
  5. By: David K. Levine; Salvatore Modica
    Abstract: In a model of evolution driven by conflict between societies more powerful states have an advantage. When the influence of outsiders is small we show that this results in a tendency to hegemony. In a simple example in which institutions differ in their “exclusiveness” we find that these hegemonies will be inefficiently “extractive” in the sense of having inefficiently high taxes, high compensation for state officials, and low welfare.
    Keywords: Game theory
    Date: 2013
  6. By: Heller, Yuval; Winter, Eyal
    Abstract: We study the strategic advantages of following rules of thumb that bundle different games together (called rule rationality) when this may be observed by one's opponent. We present a model in which the strategic environment determines which kind of rule rationality is adopted by the players. We apply the model to characterize the induced rules and outcomes in various interesting environments. Finally, we show the close relations between act rationality and “Stackelberg stability” (no player can earn from playing first).
    Keywords: Bounded Rationality, Commitments, Categorization, Value of information.
    JEL: C72 D82
    Date: 2013–07–31
  7. By: John T. Kulas; Mana Komai; Saint Cloud State University; Philip J. Grossman
    Abstract: This paper experimentally investigates how risk attitudes mitigate leadership effectiveness in a collective setting with projects that exhibit both free riding and coordination problems. We take two novel approaches: 1) the introduction of economic game theory to psychological studies of leadership, and 2) the application of the leadership ontology of Drath et al. (2008) as a crossdisciplinary integrative framework. Leadership here is focused on the presence or absence of direction, alignment, and commitment as well as antecedent beliefs and practices that are held within a collective (for us, our experimental participants). Our leadership context is stripped down to very minimal conditions: three group members, an investment decision, and the introduction of information regarding group members' attitudes toward risk. We find that the mere mention of risk attitude (whether risky or risk averse) undermines leadership effectiveness in mitigating free riding for our 420 experimental participants. Our study’s primary implications lie in the application of game theory methodology to the psychological study of leadership, the introduction of relevant individual difference constructs to economic studies of leadership, and the advocation of the Drath et al. (2008) framework as a helpful integrative mechanism for interdisciplinary leadership research.
    Keywords: game theory; risk attitude; interdisciplinary research; group dynamics
    Date: 2013–07
  8. By: Christian Westphal (University of Marburg)
    Abstract: School shootings are often used in public policy debate as a justification for increased regulation, based on qualitative arguments. However, to date, no effort has been made to find valid quantitative evidence for the claims bolstering the regulation recommendations. In defense of this absence of evidence, it is usually argued that the rarity of such events does not allow the employment of quantitative methods. This paper, using a simulation study, shows that, based on the number of shool shootings in the United States and Germany combined, the well-known method of logistic regression can be applied to a case-control study, making it possible to at least test for an association between hypothesized influential variables and the occurrences. Moderate relative risks, explained by an observed variable, would lead to a high power of the appropriate test. A moderate numbers of cases generated by such a variable would suffice to show a significant association.
    Keywords: Rare Events; Logistic Regression; Case-Control Studies; School Shootings
    JEL: C25 C35 I18 K14
    Date: 2013
  9. By: Andreas Karpf (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: This article investigates whether the formation of individual inflation expectations is biased towards a consensus and is thus subject to some kind of herding behavior. Basing on the traditional Carlson-Parkin approach to quantify qualitative survey expectations and its extension by Kaiser and Spitz (2002) in an ordered probit context, a method to gain individual level inflation expectations is proposed using a Markov chain Monte Carlo Hierarchical Bayesian estimation method. This method is applied to micro survey data about inflation expectations of households from the monthly French household survey "Enquête mensuelle de conjoncture auprès des ménages - ECAMME" (January 2004 to December 2012). Finally a non-parametric test for herding behavior (Bernardt et al., 2006) is conducted on the cohort-level expectation estimates, showing that the expectation formation is not subject to a bias towards the expectation consensus. In constrast, it exhibits a strong anti-herding tendency which is consistent with the findings of other studies (Rülke and Tillmann, 2011).
    Keywords: Herd behavior; inflation; rational expectations
    Date: 2013–07
  10. By: Shigetomi, Shinichi
    Abstract: In Thailand, communitarian ideas have been widely accepted and even institutionalized as a principle of national development plans and the Constitution of Thailand. This paper examines how and why the communitarian body of thought, described as "community culture thought," and originally created and shared within a small circle of social activists and academics in the early 1980s, came to be disseminated and authorized in Thai society. Contributors and participants, ways of expression, and avenues for disseminating this paradigm are the main topics in this paper. The paper reveals that these thoughts and concepts have been diversified and used as guiding principles by state elites, anti-state activists, and social reformists since the late 1980s. These people with such different political ideologies were connected through some key individuals. These critical connections networked them onto the same side for promoting communitarian thought in Thailand. When such leading advocates assumed key political positions, it was easy for them to push communitarian ideas into the guidelines and principles of state administration.
    Keywords: Thailand, Community, Sociology, Social movements, Communitarianism, Political sociology
    Date: 2013–07
  11. By: Graziano Abrate (Department of Business Management and Environment, University of Eastern Piedmont); Federico Boffa (Department of Law and Economics, University of Macerata); Fabrizio Erbetta (Department of Business Management and Environment, University of Eastern Piedmont); Davide Vannoni (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)
    Abstract: This paper explores the link between accountability, corruption and efficiency in the context of a career concern model where politically connected local monopolies are in charge of the provision of a local public service. We find that both corruption and a low degree of accountability induce managers to reduce effort levels, thereby contributing to drive down efficiency. Our predictions are tested using data on solid waste management services provided by a large sample of Italian municipalities. The results of the estimation of a stochastic cost frontier model provide robust evidence that high corruption levels and low degrees of accountability substantially increase cost inefficiency. Finally, we show that the negative impact of corruption is weaker for municipalities ruled by left-wing parties, while the positive impact of accountability is stronger if the refuse collection service is managed by limited liability companies.
    Keywords: corruption, accountability efficiency, solid waste.
    JEL: D24 D72 D73 L25 Q53
    Date: 2013–07
  12. By: Sidartha Gordon (Département d'économie); Talia Bar (University of Connecticut); Vidya Atal (Montclair State University)
    Abstract: We examine project adoption decisions of firms constrained in the number of projects they can handle at once. Adoption requires a commitment for a period of uncertain duration, restricting the firm in subsequent periods. Capacity constraints create a “fear of commitment” — some positive return projects are not adopted. In the sequential move dynamic game, the second mover sometimes adopts projects that were rejected by the first, even when both firms are symmetric and equally informed. We study the e§ects of competition on the fear of commitment, and compare the jointly optimal adoption decision to the behavior of strategic non-cooperative firms.
    Keywords: adoption, project selection, commitment, Markov perfect equilibrium
    JEL: L10 L13 D21
    Date: 2013–07
  13. By: Fedele, Alessandro (Free University of Bozen/Bolzano); Naticchioni, Paolo (University of Cassino)
    Abstract: In this paper we study optimal choices of self-selection into politics and commitment once in office on the part of citizens with heterogeneous abilities and heterogeneous motivations. Politicians can moonlight, i.e., they can work in the market sector while appointed in parliament. Our theoretical framework shows that high-ability citizens may enter politics. Yet while high-ability non-motivated (market-fit) politicians are likely to shirk, high-ability motivated (public-fit) ones are more committed to parliamentary activity. We test our predictions by using a unique database of Italian parliamentarians for the period 1996-2006. We find evidence of advantageous selection of the market-fit and the public-fit politicians in that they both display a pre-election income greater than that of the Italian population. We also show that the commitment of the market-fit parliamentarians in terms of voting attendance is negatively affected by income opportunities, whilst this is not the case for the public-fit ones.
    Keywords: motivation, moonlighting politicians
    JEL: P16 J45 J24 J32
    Date: 2013–07
  14. By: Youngsub Chun; Manipushpak Mitra; Suresh Mutuswami
    Abstract: We investigate the implications of egalitarian equivalence (Pazner and Schmeidler [22]) together with queue efficiency and strategyproofness in the context of queueing problems. We completely characterize the class of mechanisms satisfying the three requirements. Though there is no mechanism in this class satisfying budget balance, feasible mechanisms exist. We also show that it is impossible to find a mechanism satisfying queue efficiency, egalitarian equivalence and a stronger notion of strategyproofness called weak group strategyproofness. In addition, we show that generically there is no mechanism satisfying two normative notions, egalitarian equivalence and no-envy, together.
    Keywords: Queueing problem, queue efficiency, strateyproofness, egalitarian equivalence, budget balance, feasibility, weak group strategyproofness, no-envy.
    JEL: C72 D63 D82
    Date: 2013–07
  15. By: Anton Kolotilin (School of Economics, the University of New South Wales)
    Abstract: A sender chooses ex ante how her information will be disclosed to a privately informed receiver who then takes one of two actions. The sender wishes to maximize the probability that the receiver takes the desired action. The sender faces an ex ante quantity-quality tradeoff: sending positive messages more often (in terms of the sender's information) makes it less likely that the receiver will take the desired action (in terms of the receiver's information). Interestingly, the sender's and receiver's welfare is not monotonic in the precision of the receiver's private information: the sender may find it easier to influence a more informed receiver, and the receiver may suffer from having more precise private information. Necessary and sufficient conditions are derived for full and no information revelation to be optimal.
    Keywords: information disclosure, persuasion, informed decision maker, two-way communication
    JEL: C72 D81 D82 D83
    Date: 2013–07
  16. By: Schiller-Merkens, Simone
    Abstract: One challenge facing research on categories is to explain their content and the extent to which they gain meaning from cultural material that originates from moral arenas. This article suggests that categories are an outcome of strategic framing activities by which market members draw on prevalent master frames as cultural material to infuse an emerging market with meaning. It depicts the construction of a market category that emerges at the boundary between the economic sphere of a market and the moral sphere of social movements. A qualitative study of the use of movement master frames in categorizing the market for ethical fashion in the United Kingdom indicates the important role of movements' cultural legacy for the categorization of a moral market. It shows that the master frame of the environmental movement prevails in market categorization. Furthermore, we see that market members tend to adopt movement frames in categorization to discuss solutions rather than to talk about problems. Two propositions are drawn from these findings. First, when market making happens at the boundary of several social movements, market members adopt the master frame mainly of the movement whose activism has already led to changes in the political agenda, in social beliefs and practices in society. Second, framing tactics change when movement frames leave the moral sphere of activist mobilization and enter the economic sphere. While talking about problems has been shown to be as important as the provision of solutions in the movement arena, providing solutions becomes more important when movement frames are adopted in the economic arena of a market. -- Kategorien sind zentrale Bestandteile der kulturellen Strukturierung von Märkten. Eine der Herausforderungen der Kategorienforschung ist es, die Inhalte von Kategorien zu erklären und herauszufinden, wie stark sie durch moralisch geprägte kulturelle Elemente beeinflusst werden. Das Papier stellt Kategorien als Ergebnis strategischer Rahmungsprozesse (framing) vor, wobei Marktakteure einem entstehenden Markt anhand verbreiteter kultureller Deutungsmuster (master frames) Bedeutung verleihen. Es beschreibt die Konstruktion einer Marktkategorie, die an der Grenze zwischen der ökonomischen Sphäre eines Marktes und der moralischen Sphäre sozialer Bewegungen entsteht. Die am Beispiel des Marktes für ethische Mode in Großbritannien durchgeführte qualitative Untersuchung stellt heraus, wie wichtig das kulturelle Vermächtnis sozialer Bewegungen für die Kategorisierung eines moralisch geprägten Marktes ist. Die Ergebnisse der Untersuchung zeigen einerseits die herausgehobene Bedeutung der Umweltbewegung für die Kategorisierung des Marktes. Sie zeigen andererseits die Tendenz der Marktakteure zu einer eher lösungs-denn problemorientierten Rahmungsaktivität: Die Deutungsrahmen sozialer Bewegungen werden zur Kategorisierung herangezogen, um Lösungsansätze zu diskutieren, weniger jedoch, um die zugrunde liegenden Probleme zu benennen. Aus diesen Ergebnissen werden schließlich zwei Thesen abgeleitet. Erstens: Entstehen neue Märkte an der Grenze zu mehreren sozialen Bewegungen, so übernehmen Marktakteure eher den Deutungsrahmen jener Bewegung, deren Aktivismus die politische Agenda, gesellschaftliche Überzeugungen und Praktiken bereits nachhaltig verändert hat. Zweitens: Die Rahmungstaktiken ändern sich mit dem Wechsel der Bewegungsrahmen von der moralischen Sphäre aktivistischer Mobilisierung in die ökonomische Sphäre. Während zur Mobilisierung von Aktivisten die Problemdiskussion als gleichbedeutend mit der Entwicklung von Lösungsansätzen gewertet wird, gewinnt die Präsentation von Lösungen an Bedeutung, sobald die Bewegungsrahmen in den ökonomischen Bereich eines Marktes übertragen werden.
    Date: 2013
  17. By: Riedl A.M.; Cettolin E. (GSBE)
    Abstract: An important element for the public support of policies is their perceived justice. At the same time most policy choices have uncertain outcomes. We report the results of a first experiment investigating just allocations of resources when some recipients are exposed to uncertainty. Although, under certainty almost all uninvolved participants distribute resources equally, they exhibit remarkable heterogeneity in just allocations under uncertainty. Moreover, uninvolved participants allocate on average less to recipients exposed to higher degrees of uncertainty and allocations are correlated with their own risk preferences. The observed allocations are consistent with four different views of justice under uncertainty.
    Keywords: Design of Experiments: Laboratory, Individual; Equity, Justice, Inequality, and Other Normative Criteria and Measurement;
    JEL: C91 D63
    Date: 2013
  18. By: Desai, Raj M.; Joshi, Shareen
    Abstract: In response to the problems of high coordination costs among the poor, efforts are underway in many countries to organize the poor through"self-help groups"(SHGs) -- membership-based organizations that aim to promote social cohesion through a mixture of education, access to finance, and linkages to wider development programs. The authors randomly selected 32 of 80 villages in one of the poorest districts in rural India in which to establish SHGs for women. Two years of exposure to these programs increased women's participation in group savings programs as well as the non-agricultural labor force. Compared to women in control villages, treated women were also more likely to participate in household decisions and engage in civic activities. The authors find no evidence however, that participation increased income or had a disproportionate impact by women's socio-economic status. These results are important in light of the recent effort to expand official support to SHGs under the National Rural Livelihood Mission.
    Keywords: Access to Finance,Primary Education,Housing&Human Habitats,Population Policies,Social Accountability
    Date: 2013–07–01

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