|
on Collective Decision-Making |
| By: | László Á. Kóczy (Óbuda University); Balázs Sziklai (Centre for Economic and Regional Studies, Hungarian Academy of Sciences) |
| Abstract: | Few elections attract so much attention as the Papal Conclave that elects the religious leader of over a billion Catholics worldwide. The Conclave is an interesting case of qualied majority voting with many participants and no formal voting blocks. Each cardinal is a well-known public figure with publicly available personal data and well-known positions on public matters. This provides excellent grounds for a study of spatial voting: In this brief note we study voting in the Papal Conclave after the resignation of Benedict XVI. We describe the method of the election and based on a simple estimation of certain factors that seem to influence the electors' preferences we calculate the power of each cardinal in the conclave as the Shapley-Shubik index of the corresponding voting game over a convex geometry. |
| Keywords: | Papal Conclave, game over convex geometry, Shapley-Shubik index JEL Codes: C71, C72 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:pkk:wpaper:1301&r=cdm |
| By: | Degryse, H.A.; Lambert, T.; Schwienbacher, A. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: Initially, voting rights were limited to wealthy elites providing political support for stock markets. The franchise expansion induces the median voter to provide political support for banking development as this new electorate has lower financial holdings and benefits less from the uncertainty and financial returns from stock markets. Our panel data evidence covering 1830-1999 shows that tighter restrictions on the voting franchise induce a greater stock market development, whereas a broader voting franchise is more conducive towards the banking sector, consistent with Perotti and von Thadden (2006). Our results are robust to controlling for other political determinants and endogeneity. |
| Keywords: | banking sector;financial development;financial structure;political economy;stock markets;voting franchise. |
| JEL: | D72 G10 O16 P16 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2013046&r=cdm |
| By: | Eijffinger, S.C.W.; Mahieu, R.J.; Raes, L.B.D. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract: This paper analyzes the voting records of four central banks (Sweden, Hungary, Poland and the Czech Republic) with spatial models of voting. We infer the policy preferences of the monetary policy committee members and use these to analyze the evolution in preferences over time and the differences in preferences between member types and the position of the Governor in different monetary policy committees. |
| Keywords: | Ideal points;Voting records;Central Banking;NBP;CNB;MNB;Riksbank. |
| JEL: | E58 E59 C11 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2013047&r=cdm |
| By: | Luigi Guiso (EIEF and CEPR); Helios Herrera (HEC Montréal); Massimo Morelli (Columbia University) |
| Abstract: | If voters of different countries adhere to different and deeply rooted cultural norms, when these countries interact their leaders may find it impossible to agree on efficient policies especially in hard times. Political leaders' actions are bound by a "conformity constraint" that requires them to express policies that do not violate these norms. This inhibits politicians from adopting the optimal policies as they may clash with either one or the other of the cultures of the interacting countries. We model this mechanism and argue that conformity constraints and cultural clash can help us understand the poor management of the Greek crisis and the resulting European Sovereign debt crisis. We show the conditions under which the introduction in Europe of a fiscal union can be obtained with consensus and be beneficial.Perhaps counter-intuitively, cultural diversity makes a fiscal union even more desirable. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:eie:wpaper:1321&r=cdm |
| By: | Axel Franzen; Sonja Pointner |
| Abstract: | We study the decision process in a group dictator game in which three subjects can distribute an initial endowment between themselves and a group of recipients. The experiment consists of two stages; first, individuals play a standard dictator game. Second, individuals are randomly matched into groups of three and communicate via instant messaging regarding the decision in the group dictator game. In contrast to former studies our results show that group decisions do not differ from individual decisions in the dictator game. Furthermore, the analysis of the chat history reveals that players make proposals according to their preferences as revealed in the single dictator game and that these proposals in groups drive the final allocation. |
| Keywords: | dictator game, group dictator game, fairness games, small group research |
| JEL: | B3 C79 C91 C92 D03 D7 |
| Date: | 2013–09–05 |
| URL: | http://d.repec.org/n?u=RePEc:bss:wpaper:2&r=cdm |
| By: | Eric Langlais (EconomiX, UMR CNRS 7235 and University of Paris Ouest-Nanterre-La Défense); Marie Obidzinski (CRESE, Université de Franche-Comté) |
| Abstract: | This paper revisits the issue of law enforcement and the design of monetary sanctions when the public law enforcer's incentives depart from those of a benevolent authority, which is the most frequent assumption made in the literature on crime deterrence. We first consider the case an elected enforcer. We find that when the harm generated by offenses is quite small relative to the average private benefits, equilibrium with weak enforcement/low sanction prevails. Instead, when the harm generated by offenses is high relative to the average private benefits, it is the equilibrium with strong enforcement/high sanctions that prevails. Therefore, we provide an explanation for the empirical puzzle highlighted by Lin(2007): elected enforcers punish major (minor) crimes more (less) severely than the benevolent social planer. The case of an appointed enforcer prone to rent seeking is also considered. The monetary sanction under rent seeking is closer to the utilitarian level, as compared with the one under election. |
| Keywords: | law enforcement, deterrence, monetary sanctions, punishment, electoral competition, democracy, rent seeking, dictature. |
| JEL: | D72 D73 H1 K14 K23 K4 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:crb:wpaper:2013-06&r=cdm |
| By: | Tom DEDEURWAERDERE (FNRS and UNIVERSITE CATHOLIQUE DE LOUVAIN); Paolo MELINDI GHIDI (UNIVERSITE CATHOLIQUE DE LOUVAIN) |
| Abstract: | In this paper we develop a theoretical model of the mechanisms behind the voluntary provision of public knowledge goods in coalitions in presence of social preferences. The model builds on the large empirical literature on voluntary production of pooled public knowledge goods, such as source code in communities of software developers or data voluntarily provided to open access data repositories. This literature shows that the provision of public goods is strongly dependent on the presence of social preferences such as group identity and social approval of individual pro-social attitudes. To integrate these effects in standard public good theory this paper builds a private-collective model of public good provision, where contribution to public knowledge goods generates both public and exclusive private benefits for the members of the coalition only. The analysis shows that, when the private benefit is important, the effect of the social preferences on the coalition formation is ambiguous. In particular, in the latter case, in presence of strong individual reputational effects, the public knowledge goods will be more difficult to produce. The comparison of the predictions of the theoretical model with the stylized facts of large scale surveys of Free/Libre/Open-Source (FLOSS) software developers confirms the results of the model. |
| Keywords: | coalition formation, private-collective model, social group identity, pro-social reputation, public knowledge goods, social dilemma |
| JEL: | H42 D71 |
| Date: | 2013–09–03 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2013020&r=cdm |
| By: | John Duffy; Felix Munoz-Garcia |
| Abstract: | This paper investigates behavior in finitely repeated simultaneous and sequential-move prisoner's dilemma games when there is one-sided incomplete information and signaling about players' concerns for fairness, specifically, their preferences regarding "inequity aversion." In this environment, we show that only a pooling equilibrium can be sustained, in which a player type who is unconcerned about fairness initially cooperates in order to disguise himself as a player type who is concerned about fairness. This disguising strategy induces the uninformed player to cooperate in all periods of the repeated game, including the final period, at which point the player type who is unconcerned about fairness takes the opportunity to defect, i.e., he "backstabs" the uninformed player. Despite such last-minute defection, our results show that the introduction of incomplete information can actually result in a Pareto improvement under certain conditions. We connect the predictions of this "backstabbing" equilibrium with the frequently observed decline in cooperative behavior in the final period of finitely-repeated experimental games. |
| Keywords: | Prisoner\'s Dilemma, Social Preferences, Inequity Aversion, Incomplete Information, Siganling, Information Transmission |
| JEL: | C72 C73 D82 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:pit:wpaper:491&r=cdm |
| By: | Ariel BenYishay (University of New South Wales); A. Mushfiq Mobarak (Economic Growth Center, Yale University) |
| Abstract: | Low adoption of productive agricultural technologies is a puzzle. Agricultural extension services rely on external agents to communicate with farmers, although social networks are known to be the most credible source of information about new technologies. We conduct a large-scale field experiment on communication strategies in which extension workers are partnered with different members of social networks. We show that communicator actions and effort are susceptible to small performance incentives, and adoption rates vary by communicator type. Communicators who face conditions most comparable to target farmers are the most persuasive. Incorporating communication dynamics can enrich the literature on social learning. |
| Keywords: | social learning, agriculture, technology adoption, Malawi |
| JEL: | O33 O13 Q16 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:egc:wpaper:1030&r=cdm |
| By: | Lafond, Francois (UNU-MERIT / MGSoG) |
| Abstract: | Suppose that homogenous agents fully consume their time to invent new ideas and learn ideas from their friends. If the social network is complete and agents pick friends and ideas of friends uniformly at random, the distribution of ideas’ popularity is an extension of the Yule-Simon distribution. It has a power-law tail, with an upward or downward curvature. For infinite population it converges to the Yule-Simon distribution. The power law is steeper when innovation is high. Diffusion follows S-shaped curves. |
| Keywords: | innovation, diffusion, two-mode networks, cumulative advantage, quadratic attachment kernel, power law, Yule-Simon distribution, generalized hypergeometric distribution |
| JEL: | D83 D85 O31 O33 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2013040&r=cdm |
| By: | Francesco Vona (Ofce sciences-po, Skema Business School); Francesco Nicolli (Ceris/Cnr, University of Ferrara) |
| Abstract: | We analyse the impact of market liberalisation on renewable energy policies in OECD countries. To this end, we first develop an aggregated indicator of renewable energy policies using principal components analysis and then examine its determinants through panel data techniques. Our results are consistent with the predictions of political-economy models of environmental policies, as brown lobbying, proxied by entry barriers in the energy sector, and citizens preferences have the expected effects on policy. Brown lobbying has a negative effect on the policy indicator, even when accounting for endogeneity in its effects in a dynamic panel specification and using different policy indicators.Reducing income inequality,the ratification of the Kyoto protocol and stronger green parties all positively affect the approval of more ambitious policies but with less robust results. |
| Keywords: | Renewable energy policy,Energy market liberalisation,Political economy. |
| JEL: | Q42 Q48 D72 O38 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:1310&r=cdm |
| By: | Radu Vranceanu (Economics Department - ESSEC Business School); Fouad El Ouardighi (Operation management Department - ESSEC Business School); Delphine Dubart (ESSEC Business School - ESSEC Business School) |
| Abstract: | This paper reports the results from a real-effort team production experiment, where best performers can impose either tacit or explicit sanctions on their less-performing partners. The behavior of the best performer in the team differs from one condition to another. When explicit sanctions are not allowed, good performers reduce their effort in response to the advantageous difference in scores; when they can impose sanctions, their change in effort is no longer related to the difference in scores. To some extent, a mechanism of explicit sanctions allows good performers to focus on their own performance. Not sanctioning an opponent who under-performs, what we refer to as forgiveness, prompts the latter to improve his performance, but applying the sanction has a stronger effect. |
| Keywords: | Team work; performance; experimental economics; punishment |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00857364&r=cdm |
| By: | Leventis, Stergios (School of Economics and Business Administration, International Hellenic University); Hasan, Iftekhar (Schools of Business, Fordham University and Bank of Finland); Dedoulis , Emmanouil (Department of Business Administration, Athens University of Economics and Business) |
| Abstract: | In this paper we provide evidence for the effects of social norms on audit pricing by studying companies belonging to the alcohol, firearms, gambling, military, nuclear power, and tobacco industries, which are often described as “sin” companies. We hypothesize that the disparities between “sin” firms operations and prevailing social norms create an adverse context which heightens the client’s business risk assessment by auditors and is, thereby, reflected in the pricing decisions for audit and consulting services. Having controlled for the impact of variables relating to client attributes, auditor attributes and engagement attributes, we demonstrate that audit firms charge significantly higher audit and consulting fees to companies that deviate from prevailing social norms. Additionally, we show that audit pricing levels within the “sin” group depend both on prevailing political views and on the vlevel of “vice” exhibited by “sin” companies. |
| Keywords: | social norms; audit pricing; controversial industries; sin companies |
| JEL: | G21 G30 G34 G38 M41 |
| Date: | 2013–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2013_013&r=cdm |
| By: | Thomas J. Miceli (University of Connecticut) |
| Abstract: | The concept of collective responsibility, or group punishment, for crimes or other harmful acts was a pervasive feature of ancient societies, as exemplified by the Greek notion of “pollution” and the Roman doctrines of noxal liability and quasi-delicts. This chapter briefly surveys historical examples of collective responsibility, which have largely given way to the modern concept of individual responsibility, though vestiges of collective responsibility remain in modern culture and law (notably in the form of vicarious liability). The chapter then lays out a theoretical analysis of the choice between collective and individual responsibility that highlights those circumstances in which each is preferred as a law enforcement strategy. |
| Keywords: | Collective responsibility, individual punishment, group punishment, liability |
| JEL: | K14 K42 N40 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:uct:uconnp:2013-23&r=cdm |
| By: | A. Mahati (Indira Gandhi Institute of Development Research); Rupayan Pal (Indira Gandhi Institute of Development Research) |
| Abstract: | This paper examines how strategic managerial delegation affects firms' timing of adoption of a new technology under different modes of product market competition. It demonstrates that delegation has differential impacts on adoption dates under Cournot and Bertrand competition. Delegation with 'own-performance' based incentive schemes always leads to early adoption in markets with Bertrand competition compared to that under no-delegation, but not necessarily so in markets with Cournot competition. It also shows that the ranking of Cournot and Bertrand equilibria in terms of delay in adoption depends on the type of managerial incentive schemes. Adoption occurs earlier (later) in markets with Cournot competition than in markets with Bertrand competition, if product differentiation is high (low), regardless of whether there is no-delegation or delegation with 'own-performance' based incentive schemes. In contrast, under strategic delegation with 'relative-performance' based incentive schemes, adoption dates do not differ across markets with different modes of competition. |
| Keywords: | Technology adoption, Strategic delegation, Own-performance, Relative-performance, Cournot, Bertrand |
| JEL: | L13 L22 O31 O32 O33 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:ind:igiwpp:2013-016&r=cdm |
| By: | Biais, Bruno; Landier, Augustin |
| Abstract: | The rents agents can extract from principals increase with the magnitude of incentive problems, which the literature usually takes as given. We endogenize it, by allowing agents to choose technologies that are more or less opaque and correspondingly prone to agency problems. In our overlapping generations model, agents compete with their predecessors. We study whether the presence of old- timers earning low rents can keep young managersrent-seeking in check. With dynamic contracts, long horizons help principals incentivize agents. Hence, old agents are imperfect substitutes for young ones. This mutes down competition between generations, especially if compensation deferral is strong. As a result, young managers can opt for more opaque and complex technologies, and therefore larger rents, than their predecessors. Thus, in equilibrium, complexity and rents rise over time. |
| Keywords: | Agency rents, moral hazard, nance sector, dynamic contracts, opacity. |
| JEL: | D3 D8 G2 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:27436&r=cdm |
| By: | Erik O. Kimbrough (Dept. of Economics, Simon Fraser University); Nikolaus Robalino (Dept. of Economics, Simon Fraser University); Arthur J. Robson (Dept. of Economics, Simon Fraser University) |
| Abstract: | This paper provides an evolutionary foundation for our capacity to attribute preferences to others. This ability is intrinsic to game theory, and is a key component of "Theory of Mind", perhaps the capstone of social cognition. We argue here that this component of theory of mind allows organisms to efficiently modify their behavior in strategic environments with a persistent element of novelty. Such environments are represented here by multistage games of perfect information with randomly chosen outcomes. "Theory of Mind" then yields a sharp, unambiguous advantage over less sophisticated, behavioral approaches to strategic interaction. In related experiments, we show the subscale for social skills in standard tests for autism is a highly significant determinant of the speed of learning in such games. |
| Keywords: | Evolution, Theory of mind |
| JEL: | D01 C7 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1907&r=cdm |
| By: | Tomás del Barrio Casto (University of the Balearic Islands, Palma de Mallorca); William Nilsson (University of the Balearic Islands, Palma de Mallorca); Andrés J. Picazo-Tadeo (University of Valencia) |
| Abstract: | Discrete choice models such as the conditional logit model are widely used tools in applied econometrics and, particularly, in the eld of environmental valuation and welfare measurement in order to provide policymakers with sound information for making strategic choices. Monte Carlo simulations are used in this study to analyze biases due to omitted relevant variables and functional form misspeci cation in the conditional logit model. Using an easy-to-estimate speci cation test is effective to reduce the risks for large biases. One somewhat discouraging result is, however, that a moderate bias can be found even when the omitted variable is orthogonal to the explanatory variables included. This result is particularly interesting considering the increasing interest in using randomized experiments to obtain causal interpretations of key parameters. Randomization, with independence between included and omitted variables, does not guarantee unbiased estimates in the conditional logit model. |
| Keywords: | Environmental valuation, Welfare measurements, Choice experiments, Monte Carlo analysis, Speci cation tests |
| JEL: | C51 D69 C99 C15 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:eec:wpaper:1318&r=cdm |
| By: | Henrique S. Basso (Banco de España); James Costain (Banco de España) |
| Abstract: | This paper studies the effects of delegating control of sovereign debt issuance to an independent authority in a monetary union where public spending decisions are decentralized. The model assumes that no policy makers are capable of commitment to a rule. However, consistent with Rogoff (1985) and with the recent history of central banking, it assumes that an institution may be designed to have a strong preference for achieving some clear, simple, quantitative policy goal. Following Beetsma and Bovenberg (1999), we show that in a monetary union where a single central bank interacts with many member governments, debt is excessive relative to a social planner’s solution. We extend their analysis by considering the establishment of an independent fiscal authority (IFA) mandated to maintain long-run budget balance. We show that delegating sovereign debt issuance to an IFA in each member state shifts down the time path of debt, because this eliminates aspects of deficit bias inherent in democratic politics. Delegating to a single IFA at the union level lowers debt further, because common pool problems across regions’ deficit choices are internalized. The establishment of a federal government with fiscal powers over the whole monetary union would be less likely to avoid excessive deficits, because only the second mechanism mentioned above would apply. Moreover, the effective level of public services would be lower, if centralized spending decisions are less informationally efficient |
| Keywords: | fi scal authority, delegation, decentralization, monetary union, sovereign debt |
| JEL: | E61 E62 F41 H63 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1311&r=cdm |
| By: | Mavromaras, Kostas G. (NILS, Flinders University); Zhu, Rong (NILS, Flinders University) |
| Abstract: | In this paper we estimate the interdependence of labour force participation decisions made by Australian couples from 2001 to 2011. We focus on couples with a mature age husband, and estimate the interdependence of the participation decision of the couple. We find that the decision of a wife to work or not influences positively, and in a causal fashion, the decision of her husband to work or not. In our paper we use counterfactual analysis to estimate the impact of the increasing labour force participation of a wife on her husband's participation. We find that the increased labour force participation of married women observed between 2002 and 2011 has been responsible for about a 4 percentage points increase in the participation of their mature age husbands. |
| Keywords: | labour force participation, spousal status, joint decision making, male employment trends, Australia |
| JEL: | J14 J21 |
| Date: | 2013–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7581&r=cdm |