New Economics Papers
on Collective Decision-Making
Issue of 2013‒09‒06
fourteen papers chosen by
Stan C. Weeber, McNeese State University

  1. The curse of uninformed voting: An experimental study By Jens Großer; Michael Seebauer
  2. Moderating Political Extremism: Single Round vs Runoff Elections under Plurality Rule By Bordignon, Massimo; Nannicini, Tommaso; Tabellini, Guido
  3. Tax Limits and Local Democracy By Revelli, Federico
  4. Political Competition, Political Donations, Economic Policy and Growth By John Maloney; Andrew Pickering
  5. Organizing for prosperity : collective action, political parties and the political economy of development By Keefer, Philip
  6. A political theory of Russian orthodoxy: Evidence from public goods experiments By Grigoriadis, Theocharis
  7. Conservation Agriculture: Innovations, Constraints and Strategies for Adoption By Meena, M.S.; Singh, K.M.
  8. Making Friends to Influence Others: The Effect of Corruption onthe Creation, Allocation and Impacts of Social Capital By Gregmar Galinato; Hayley Chouinard; Phil Wandschneider
  9. The Max-Min Group Contest By Subhasish M. Chowdhury; Dongryul Lee; Iryna Topolyan
  10. Measuring and rewarding flexibility in collaborative distribution, including two-partner coalitions By Vanovermeire, Christine; Sörensen, Kenneth
  11. The Rise and Fall of R&D Networks By Mauro V. Tomasello; Mauro Napoletano; Antonios Garas; Frank Schweitzer
  12. Efficient Fiscal Spending by Supranational Unions International Debt Deleveraging By Jenny Simon; Justin Valasek
  13. Poverty, Private Property and Common Pool Resource Management: The Case of Irrigation Tanks in South India By R. Balasubramanian; K.N. Selvaraj
  14. Religious identity, public goods and centralization: Evidence from Russian and Israeli cities By Grigoriadis, Theocharis; Torgler, Benno

  1. By: Jens Großer; Michael Seebauer
    Abstract: We study majority voting over two alternatives in small groups. Individuals have identical preferences but are uncertain about which alternative can better achieve their common interest. Before voting, each individual can get informed, to wit, buy a valuable but imperfect signal about the better alternative. Voting is either voluntary or compulsory. In the compulsory mode, each individual can vote for either of the two alternatives, while in the voluntary mode they can also abstain. An uninformed random vote generates negative externalities, as it may override informative group decisions in pivotal events. In our experiment, participants in groups of three or seven get informed more often with compulsory than voluntary voting, and in this way partly counteract the curse of uninformed voting when they cannot avoid it by abstaining. Surprisingly, uninformed voting is a common phenomenon even in the voluntary mode! A consequence of substantial uninformed voting is poor group efficiency in all treatments, indicating the need to reconsider current practices of jury and committee voting.
    Date: 2013–08–27
  2. By: Bordignon, Massimo (Università Cattolica del Sacro Cuore); Nannicini, Tommaso (Bocconi University); Tabellini, Guido (Bocconi University)
    Abstract: We compare single round vs runoff elections under plurality rule, allowing for partly endogenous party formation. Under runoff elections, the number of political candidates is larger, but the influence of extremist voters on equilibrium policy and hence policy volatility are smaller, because the bargaining power of the political extremes is reduced compared to single round elections. The predictions on the number of candidates and on policy volatility are confirmed by evidence from a regression discontinuity design in Italy, where cities above 15,000 inhabitants elect the mayor with a runoff system, while those below hold single round elections.
    Keywords: electoral rules, policy volatility, regression discontinuity design
    JEL: H72 D72 C14
    Date: 2013–08
  3. By: Revelli, Federico (University of Turin)
    Abstract: Based on a theoretical model where state limits on local government policy elicit a move from private value (position issue) to common value (valence issue) voting, I exploit exogenous variation in tax limitation rules in over 7,000 Italian municipalities during the 2000s to show that fiscal restraints provoke a fall in voter turnout and number of mayor candidates, and a rise in elected mayors’ valence proxy and win margins. The evidence is compatible with the hypothesis of hierarchical tax imitations fading the ideological stakes of local elections and favoring valence-based party line crossing, thus questioning the influential accountability postulate of the fiscal decentralization lore
    Date: 2013–07
  4. By: John Maloney; Andrew Pickering
    Abstract: Greater political competition reduces the extent of rent-seeking or resource diversion by politicians in government. However, the potency of this effect depends on whether or not there are limits on donations to candidates standing for election, and on the objectives of donors themselves. Data from the US states suggest that the corruption-political competition gradient is stronger under laissez-faire regimes. Consistent with our notion of 'weakly benign' donors, limits are associated with better policies and stronger growth performance at low levels of political competition, whilst laissez-faire is preferred when political competition is high.
    Keywords: political competition, political donations, rent-seeking, economic policy, growth
    JEL: D72 H11 H70
    Date: 2013–08
  5. By: Keefer, Philip
    Abstract: The ability of citizens to act collectively plays a central role in major debates in the political economy of development, including the causes and consequences of democratization and clientelism. This essay uses two lines of research to underscore the importance of explicitly introducing the organization of collective action into these debates. Exhaustive research on the management of open access resources demonstrates that citizens'ability to act collectively depends on non-trivial organizational arrangements that allow leaders to sanction free-riding and allow members to replace leaders if they shirk. Other research demonstrates wide variability in the organization of political parties. In countries where political parties do not have these two organizational characteristics, public policies are less friendly to economic development. This evidence suggests that in future research on democracy, state-building and development, citizen organization should be a central object of analysis.
    Keywords: Parliamentary Government,Microfinance,Corporate Law,Politics and Government,Political Systems and Analysis
    Date: 2013–08–01
  6. By: Grigoriadis, Theocharis
    Abstract: In this paper, I test the effects of religious norms on the provision of public goods. My evidence is drawn from public goods experiments that I ran with regional bureaucrats in Tomsk and Novosibirsk, Russia. I introduce three treatments, which I define as degrees of Eastern Orthodox collectivist enforcement: 1. Solidarity, 2. Obedience, and 3. Universal discipline. I argue for the existence of an Eastern Orthodox hierarchy in the Russian bureaucracy that facilitates the delivery of public goods under conditions of universal discipline and the principal´s overfulfillment. Eastern Orthodox hierarchy is enforced through universal disciplinary monitoring, which induces collective punishment when the public good is not delivered. Contrary to conventional wisdom about freeriding in administrative institutions, higher ranks in Russian bureaucracies are associated with less freeriding. --
    Keywords: public goods experiments,bureaucracy,enforcement,Russia,religion,incomplete information,hierarchy
    JEL: C91 C92 D72 D73 P21 P26 P32 P51 Z12
    Date: 2013
  7. By: Meena, M.S.; Singh, K.M.
    Abstract: Untenable use of factors of production is causing severe land degradation and food insecurity problems especially in developing world. Land degradation threatens the ecosystem health and food security worldwide and will remain high priority on international agenda. Conservation agriculture (CA) innovations offer a new paradigm for agricultural research and development. While examining the total innovation-decision process, one can see how the farmers observe innovations (knowledge), relate to images and message within technological innovations (persuasion), formulate a want for item (decision), actively pursue the desire for item (implementation), and ultimately decide whether future uses of technologies / are desirable (confirmation). The adoption of CA innovations can be facilitated by locally identified and specially trained group leaders or by promoters. For the success, farmers will need to be in forefront for helping in identification, development and deployment of CA innovations. Developing and promoting RCT systems is highly demanding in terms of knowledge base. This will call for greatly enhanced capacity of scientists to address the prevailing problems / constraints from a systems perspective and be able to work in close partnerships with farmers and other stakeholders. There is also need to strengthen the knowledge and information-sharing mechanisms. Improvement in coordination amongst various stakeholders like research, extension service, farmers, service providers, agricultural machinery, and manufacturers for transfer of technologies will play a pivotal role in accelerating the Conservation Agriculture.
    Keywords: Conservation agriculture, Processes innovations, Adoption strategies
    JEL: O13 O31 O32 O33 Q15 Q2
    Date: 2013–08–17
  8. By: Gregmar Galinato; Hayley Chouinard; Phil Wandschneider (School of Economic Sciences, Washington State University)
    Abstract: We examine the effect of corruption on social capital investment in an association and its allocation in a political economy context. Our model explains how agents invest to form social capital which is used to produce a club good for association members and influence industry-wide policy. Government corruption affects the number of agents that invest in social capital and the contribution per agent, but varies with agent productivity. We find that high productivity agents prefer to influence policy while low productivity agents focus on production. Furthermore, social capital does not necessarily increase welfare if socially sub-optimal regulations are implemented.
    Keywords: association, corruption, social capital
    JEL: D71 D73
    Date: 2013–01
  9. By: Subhasish M. Chowdhury (University of East Anglia); Dongryul Lee (Sungshin University); Iryna Topolyan (Mississippi State University)
    Abstract: We investigate a group all-pay auction with weakest-link impact function and group-specific public good prize. Since only the minimum effort exerted among all group members represents the group effort and the group with the maximum group effort wins the contest, this is termed as the `Max-Min group contest'. Examples of such structure include various sporting events, territorial conicts, negative product or political campaigns etc. We fully characterize equilibria for the case of two groups and show that a continuum of pure strategy equilibria exist, in which all (active) players exert the same effort. A semi-pure strategy equilibrium may also exist in which all the members of one group play the same pure strategy whereas all the members of the other group play the same mixed strategy. There are two types of non-degenerate mixed strategy equilibria - with and without continuous supports. When either type of such equilibrium exists, it exhibits the same support and effort distribution of group members. We also fully characterize pure strategy equilibria for a general case of n groups and specify candidates for mixed strategy equilibria.
    Date: 2013–08
  10. By: Vanovermeire, Christine; Sörensen, Kenneth
    Abstract: Horizontal collaboration among shippers is gaining traction as a way to increase logistic efficiency. The total distribution cost of a logistic coalition is generally between 9% and 30% lower than the sum of costs of each partner distributing separately. However, the coalition gain is highly dependent on the flexibility that each partner allows in its delivery terms. Flexible delivery dates, flexible order sizes, order splitting rules, etc., allow the coalition to exploit more opportunities for optimization and create better and cheaper distribution plans. An important challenge in a logistic coalition is the division (or sharing) of the coalition gain. Several methods have been proposed for this purpose, often stemming from the eld of game theory. This paper states that an adequate gain sharing method should not only be fair, but should also reward exibility in order to persuade companies to relax their delivery terms. Methods that limit the criteria for cost allocation to the marginal costs and the values of the subcoalitions are found to be able to generate adequate incentives for companies to adopt a flexible position. In a coalition of two partners however, we show that these methods are not able to correctly evaluate an asymmetric effort to be more exible. For this situation, we suggest an alternative approach to better measure and reward the value of flexibility.
    Date: 2013–08
  11. By: Mauro V. Tomasello; Mauro Napoletano; Antonios Garas; Frank Schweitzer
    Abstract: Drawing on a large database of publicly announced R&D alliances, we track the evolution of R&D networks in a large number of economic sectors over a long time period (1986- 2009). Our main goal is to evaluate temporal and sectoral robustness of the main statistical properties of empirical R&D networks. By studying a large set of indicators, we provide a more complete description of these networks with respect to the existing literature. We find that most network properties are invariant across sectors. In addition, they do not change when alliances are considered independently of the sectors to which partners belong. Moreover, we find that many properties of R&D networks are characterized by a rise-and-fall dynamics with a peak in the mid-nineties. Finally, we show that such properties of empirical R&D networks support predictions of the recent theoretical literature on R&D network formation.
    Date: 2013–09–03
  12. By: Jenny Simon; Justin Valasek
    Abstract: We study fiscal spending by supranational unions, where participation is voluntary and countries bargain over contributions to and the allocation of a central budget. We establish and explore the link between the budget's allocation and nations' contributions that occurs since bargaining power is endogenous, and a country's outside option during budget negotiations is to withdraw its contribution and consume its full income. Generically, it follows that unstructured bargaining gives an inefficient result in the presence of income asymmetry between member nations. Interestingly, redistribution arises endogenously, despite nations being purely self-interested. However, there exists a trade-off between increasing equality and decreasing efficiency, which becomes more severe as the centralized budget increases. We also analyze partial ex-ante commitment through alternative decision-making institutions: Both majority rule and exogenous tax rules can improve efficiency. JEL classification: H77, H87, D71
    Keywords: Supranational Unions, Efficiency, Public Goods, Redistribution, Federalism, Legislative Bargaining
    Date: 2013–06–10
  13. By: R. Balasubramanian; K.N. Selvaraj
    Abstract: Irrigation tanks are one of the oldest and most important common property water resources in the resource-poor regions of South India. Tanks are also important from an ecological perspective because they serve as a geographically well-distributed mechanism for the conservation of soil, water and bio-diversity. Unfortunately, tank irrigation has undergone a process of rapid decline in the recent past, much of which can be attributed to the disintegration of traditional irrigation institutions. In response, people adopt various coping strategies such as migration, non-agricultural employment, and private tube-wells. Adoption of private coping mechanisms has serious implications for community coping mechanisms, i.e., for collective conservation efforts. Against this background, this study tries to understand the main causes of tank degradation and the complex interrelationships among poverty, private coping mechanisms and community coping mechanisms that affect tank performance. Primary and secondary data are used to estimate three regressions models: a macro model on tank degradation, a household-level model on collective action, and a production function incorporating collective action as an input. In general, poor people are more dependent on tanks for various livelihood needs and hence they contribute more towards tank management compared to non-poor households. The analysis of tank degradation shows that there has been a decline in the performance of tanks. Population pressure is found to have accelerated the process of tank degradation. Though the emergence of private tube-wells contributes towards mitigating tank degradation within a narrow range, a continuous increase in the number of wells beyond limits exacerbates the process of tank degradation. This result is further validated by the micro-level econometric model of collective action towards tank management, which indicates that the increase in the number of private wells has a strong negative effect on the participation of rural communities in tank management. The size of the user group has a negative impact on cooperation, while the existence of traditional governance structures, such as rules for water allocation, promotes collective action. Wealth inequality is found to have a U-shaped relationship with collective action. The production function analysis shows that collective action has a positive and significant impact on the rice yields. Therefore, collective action is important for higher productivity and income. The study proposes several policy measures to revive and sustain tanks so as to provide livelihood security to the poor, who are the most affected by resource degradation. 
    Keywords: Irrigation tanks, collective action, coping mechanisms, poverty, common pool resources, South India
  14. By: Grigoriadis, Theocharis; Torgler, Benno
    Abstract: In this paper, we analyze the effects of religious identity - defined both as personal identification with a religious tradition and institutional ideas on the provision of public goods - on attitudes toward central government. We explore whether citizens belonging to collectivist rather than individualist religious denominations are more likely to evaluate their central government positively. Moreover, we explore whether adherence to collectivist norms of economic and political organization leads to a positive evaluation of central government. Surveys were conducted in Russia and Israel as these countries provide a mosaic of three major world religions - Judaism, Eastern Orthodoxy and Sunni Islam. The information gathered also allows us to study whether attitudes towards religious institutions such as the Russian Orthodox Church, the Chief Rabbinate in Jerusalem, the Jerusalem Islamic Waqf, and the Greek-Orthodox Patriarchate of Jerusalem in Israel are able to predict positive attitudes toward centralized forms of governance. We find strong support for the proposition that collectivist norms and an institutional religious identity enhance positive attitudes towards central government. --
    Keywords: Religious identity,public goods,collectivism,individualism,local government,centralization,Russia,Israel
    JEL: P16 P17 P21 P35 P51 P52 Z12
    Date: 2013

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