New Economics Papers
on Collective Decision-Making
Issue of 2013‒10‒11
eighteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Local representation and strategic voting: evidence from electoral boundary reforms By Tuukka Saarimaa; Janne Tukiainen
  2. Tax limits and local democracy By Federico Revelli
  3. Left, Right, Left: Income, Learning and Political Dynamics By John Morrow; Michael Carter
  4. The establishment of the High Level Panel of Experts on food security and nutrition (HLPE). Shared, independent and comprehensive knowledge for international policy coherence in food security and nutrition By Vincent Gitz; Alexandre Meybeck
  5. Homevoters vs. leasevoters: a spatial analysis of airport effects By Gabriel M. Ahlfeldt; Wolfgang Maennig
  6. Peer Effects in Endogenous Networks By Timo Hiller; Timo Hiller
  7. Taking the Well-being of Future Generations Seriously : Do People Contribute More to Intra-temporal or Inter-temporal Public Goods? By Gilles Grolleau; Angela Sutan; Radu Vranceanu
  8. Long-term commitment and cooperation By Frédéric Schneider; Roberto A. Weber
  9. False negotiations: The art & science of not reaching an agreement By Edy Glozman; Netta Barak-Corren1and; Ilan Yaniv
  10. Addressing Global Environmental Externalities: Transaction Costs Considerations By Gary D. Libecap
  11. Dress-up contest: a dark side of fiscal decentralization By Ruixin Wang; Wendun Wang
  12. BASIC effect on global climate governance. Power changes and regime shifts By Pierre Berthaud; Tancrède Voituriez
  13. Central Government's Infrastructure Investment across Chinese Regions: A Dynamic Spatial Panel Data Approach By Zheng, Xinye; Li, Fanghua; Song, Shunfeng; Yu, Yihua
  14. The Retraction Penalty: Catastrophe and Consequence in Scientific Teams By Ginger Zhe Jin; Benjamin Jones; Susan Feng Lu; Brian Uzzi
  15. Orchestrating innovation with user communities in the creative industries By G. Parmentier; Vincent Mangematin
  16. The persistence of firms' knowledge base: A quantile approach to Italian data By Alessandra Colombelli; Francesco Quatraro
  17. The spatial organisation for cooperation: what knowledge can we use from a historical analysis to understand the design of a new campus at Saclay ? By Caroline Scotto
  18. Turkish-German innovation networks in the European research landscape By Prostolupow, Irene; Pyka, Andreas; Heller-Schuh, Barbara

  1. By: Tuukka Saarimaa (Government Institute for Economic Research VATT); Janne Tukiainen (Government Institute for Economic Research VATT & Helsinki Center of Economic Research (HECER))
    Abstract: We use Finnish local election voting data to analyze whether voters value local representation and act strategically to guarantee it. To identify such preferences and behavior, we exploit municipal mergers as natural experiments, which increase the number of candidates and parties available to voters and intensify political competition. Using difference-in-differences strategy, we find that voters in merged municipalities start to concentrate their votes to local candidates despite the larger choice set, whereas the vote distributions in the municipalities that did not merge remain the same. Moreover, the concentration effect is clearly larger in municipalities that are less likely to gain local representation in the post-merger councils. We also find that the effect increases both as the geographical distance and income heterogeneity between merging municipalities increases. We interpret these results as evidence of both preferences for local representation and strategic voting.
    Keywords: Electoral boundary reform, local representation, municipality mergers, strategic voting
    JEL: C21 C23 D72 H73 H77
    Date: 2013
  2. By: Federico Revelli (University of Torino)
    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 limitations 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.
    Keywords: Local elections, voter turnout, tax and expenditure limitations, fiscal decentralization
    JEL: D72 H77 C23
    Date: 2013
  3. By: John Morrow; Michael Carter
    Abstract: The political left turn in Latin America, which lagged its transition to liberalized market economies by a decade or more, challenges conventional economic explanations of voting behavior. This paper generalizes the forward-looking voter model to a broad range of dynamic, non-concave income processes. The model implies support for redistributive policies materializes rapidly if few prospects of upward mobility are present. In contrast, modeling voters’ ideologically charged beliefs about income dynamics shows a slow and polarizing shift toward redistributive preferences occurs. Simulation using fitted income dynamics suggests that imperfect information better accounts for the shift back to the left, and offers additional insights about political dynamics.
    JEL: D31 D72 D83 P16
    Date: 2013–10
  4. By: Vincent Gitz (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR56 - CNRS : UMR8568 - École des Hautes Études en Sciences Sociales [EHESS] - École des Ponts ParisTech (ENPC) - AgroParisTech); Alexandre Meybeck (FAO Viale delle terme di Caracalla - FAO Viale delle terme di Caracalla)
    Abstract: Following the 2007-2008 food crisis, improvements of world food governance was at the centre of international discussions, leaning towards a new Global Partnership for Agriculture, Food Security and Nutrition. In this process, the issue of the management of various streams of knowledge appeared a central element to allow for better policy coordination, and led to the creation of the High Level Panel of Experts on food security and nutrition (HLPE). Here we describe the genesis and unveil the rationale underneath the creation of this expert process aiming at a better shared understanding of food insecurity of its causes and of potential remedies, and at helping policy-makers to look forward to emerging issues. Drawing lessons from other international expert processes at the interface between expertise and decision-making, we describe the internal rules of the expertise process, as well as the "boundary rules" that frame relations and exchanges between the expert body and decision makers, and show how critical the "fine-tuning" of those rules is not only for the expert process, but also, for the political negotiation platform itself.
    Date: 2013–09–30
  5. By: Gabriel M. Ahlfeldt (London School of Economics and Political Science (LSE) & Spatial Economics Research Centre (SERC)); Wolfgang Maennig (University of Hamburg)
    Abstract: We use a public referendum on a new air traffic concept in Berlin, Germany as a natural experiment to analyze how the interaction of tenure and capitalization effects shapes the outcome of direct democracy processes. We distinguish between homevoters, i.e., voters who are homeowners, and leasevoters, i.e., voters who lease their homes. We expect the former to be more likely to support or op-pose initiatives that positively or negatively affect the amenity value of a neighborhood because some of the related benefits or costs of the latter are neutralized by adjustments in market rents (capitalization). Our empirical results are in line with our theoretical expectations and imply that public votes on local public goods do not necessarily reflect the spatial distribution of welfare effects in mixed-tenure environments.
    Keywords: Referendum, homevoters, leasevoters, NIMBYism, rents, noise, airports, Berlin
    JEL: D61 D62 H41 H71 L83 I18 R41 R58
    Date: 2013
  6. By: Timo Hiller; Timo Hiller
    Abstract: This paper presents a simple model of strategic network formation with local complementarities in effort levels and positive local externalities for a general class of payoff functions. Results are obtained for one-sided and two-sided link creation. In both cases (pairwise) Nash equilibrium networks are nested split graphs, which are a strict subset of core-periphery networks. The relevance of the convexity of the value function (gross payoffs as a function of neighbours' effort levels when best responding) in obtaining nested split graphs is highlighted. Under additional assumptions on payoffs, we show that the only efficient networks are the complete and the empty network. Furthermore, there exists a range of linking cost such that any (pairwise) Nash equilibrium is inefficient and for a strict subset of this range any (pairwise) Nash equilibrium network structure is different from the efficient network. These findings are relevant for a wide range of social and economic phenomena, such as educational attainment, criminal activity, labor market participation, and R&D expenditures of rms.
    Keywords: Strategic network formation, peer effects, strategic complements, positive externalities.
    JEL: D62 D85
    Date: 2013–09
  7. By: Gilles Grolleau (Unité MIAJ - INRA - Mathématiques et Informatique Appliquées - Institut national de la recherche agronomique (INRA)); Angela Sutan (ESC Dijon Bourgogne - ESC Dijon Bourgogne); Radu Vranceanu (Economics Department - ESSEC Business School)
    Abstract: We investigate the dynamics of cooperation in public good games when contributions to the public good are immediately redistributed across contributors (intra-temporal transfers) and when contributions to the public good by the current group are transferred over time to a future group (inter-temporal transfers). We show that people are more cooperative in inter-temporal contexts than in intra-temporal contexts. We also find that subjects invest more on average in public goods when they know in advance their inheritance from the past.
    Keywords: Public goods ; Voluntary contribution mechanism ; Inter-temporal vs intra-temporal transfers ; Sustainable development
    Date: 2013–09
  8. By: Frédéric Schneider; Roberto A. Weber
    Abstract: We study how the willingness to enter long-term bilateral relationships affects cooperation even when parties have little information about each other, ex ante, and cooperation is otherwise unenforceable. We experimentally investigate a finitely-repeated Prisoner’s Dilemma, allowing players to endogenously select interaction durations. Consistent with prior research, longer interactions facilitate cooperation. However, many individuals avoid long-term commitment, with uncooperative types less likely to commit than conditional cooperators. Endogenously chosen long-term commitment yields higher cooperation rates (98% in one condition) than exogenously imposed commitment. Thus, the willingness to enter into long-term relationships provides a means for fostering - and screening for - efficient cooperation.
    Keywords: Repeated games, cooperation, voluntary commitment
    JEL: C72 C92 D03
    Date: 2013–09
  9. By: Edy Glozman; Netta Barak-Corren1and; Ilan Yaniv
    Abstract: The usual purpose of negotiations is to explore options and reach an agreement, if possible. We investigated a notable exception to this generalization, where a party negotiates without any intention of reaching an agreement. False negotiation occurs when a party gains more by stalling the negotiations until an external change takes place that improves its position considerably. While false negotiators aim to avoid agreement within the current frame of the negotiations, they also aim to keep the negotiation process alive, since walking away from the negotiation table could endanger their position. We report the results of a study that compared the actions of false and sincere negotiators. The false negotiators used competitive tactics that encumbered the negotiations, yet they concealed their intentions by maintaining a façade of cooperation. Our theoretical discussion is focused on the balancing act involved in false negotiations and the challenges it poses for actors in social, managerial, and political settings. We conclude our analysis with an example from the realm of international negotiations.
    Date: 2013–09
  10. By: Gary D. Libecap
    Abstract: Is there a way to understand why some global environmental externalities are addressed effectively whereas others are not? The transaction costs of defining the property rights to mitigation benefits and costs is a useful framework for such analysis. This approach views international cooperation as a contractual process among country leaders to assign those property rights. Leaders cooperate when it serves domestic interests to do so. The demand for property rights comes from those who value and stand to gain from multilateral action. Property rights are supplied by international agreements that specify resource access and use, assign costs and benefits including outlining the size and duration of compensating transfer payments and determining who will pay and who will receive them. Four factors raise the transaction costs of assigning property rights: (i) scientific uncertainty regarding mitigation benefits and costs; (ii) varying preferences and perceptions across heterogeneous populations; (iii) asymmetric information; and (iv) the extent of compliance and new entry. These factors are used to examine the role of transaction costs in the establishment and allocation of property rights to provide globally-valued national parks, implement the Convention on the International Trade in Endangered Species (CITES), execute the Montreal Protocol to control emissions that damage the stratospheric ozone layer, set limits on harvest of highly-migratory ocean fish stocks, and control greenhouse gas emissions (GHG).
    JEL: D23 D62 H87 N5 Q2 Q3 Q38 Q5
    Date: 2013–10
  11. By: Ruixin Wang (CentER, Tilburg University); Wendun Wang (Erasmus University Rotterdam)
    Abstract: A `dress-up contest' is a competition for the best public image, and fiscal decentralisation can lead to such contests between local governments. In this paper we model the dress-up contest and investigate how it a effects social welfare. We show that yardstick competition (due to fiscal decentralisation) forces local governments to allocate more resources to more visible public goods (such as cash assistance) than less visible goods (such as vendor payments) and thus starts dress-up contests. The resulting distortion of resource allocation causes a structural bias in public expenditure and further hurts social welfare. To empirically verify our theoretical model, we employ U.S. state-level data from 1992 to 2008, and we estimate the panel data model using various econometric approaches. The empirical results provide strong evidence that fiscal decentralisation can lead to distortion in public expenditure arising from dress-up contests. We also find that this distortion increases the regional poverty rate.
    Keywords: Fiscal decentralization, yardstick competition, dress-up contest, functional coefficient model
    JEL: D72 H75 H77
    Date: 2013
  12. By: Pierre Berthaud (CREG - Centre de recherche en économie de Grenoble - Université Pierre-Mendès-France - Grenoble II : EA4625); Tancrède Voituriez (MOISA - Marchés, Organisations, Institutions et Stratégies d'Acteurs - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR99 - Institut de recherche pour le développement [IRD] - IAMM - Institut national de la recherche agronomique (INRA) : UR1110)
    Abstract: In this paper we address the issue of the indeterminacy of climate change negotiations and examine the role played by the BASIC countries (Brazil, South Africa, India and China) in this indeterminacy. Mobilising the analytical tools of international political economy (IPE), we show that changes in the distribution of power over the last 20 years explain the indeterminacy of negotiation outcomes far more than changes in political preferences, which have remained fairly stable.
    Keywords: climate change ; sustainable development ; international political economy ; international negotiation ; South Africa ; Brazil ; China ; India
    Date: 2013–07–09
  13. By: Zheng, Xinye; Li, Fanghua; Song, Shunfeng; Yu, Yihua
    Abstract: This study employs spatial panel techniques to examine determinants of regional allocation of infrastructure investment made by the central government. Using a sample of 31 Chinese provinces over the 2001-2008 period, we derived four major empirical findings. First, there exist substantial spatial interactions of central government's investment across regions. Second, the central investment exhibits a highly persistent effect. Third, the central government attempts to balance equity and efficiency in its decision-making. Last, the political factor plays a significant role in the regional infrastructure investment.
    Keywords: Infrastructure investment; efficiency-equity tradeoff; spatial interaction
    JEL: C33 H54 R0
    Date: 2013–10–06
  14. By: Ginger Zhe Jin; Benjamin Jones; Susan Feng Lu; Brian Uzzi
    Abstract: What are the individual rewards to working in teams? This question extends across many production settings but is of long-standing interest in science and innovation, where the “Matthew Effect” suggests that eminent team members garner credit for great works at the expense of less eminent team members. In this paper, we study this question in reverse, examining highly negative events – article retractions. Using the Web of Science, we investigate how retractions affect citations to the authors’ prior publications. We find that the Matthew Effect works in reverse – namely, scientific misconduct imposes little citation penalty on eminent coauthors. By contrast, less eminent coauthors face substantial citation declines to their prior work, and especially when they are teamed with an eminent author. A simple Bayesian model is used to interpret the results. These findings suggest that a good reputation can have protective properties, but at the expense of those with less established reputations.
    JEL: J24 L15 L23 O3
    Date: 2013–10
  15. By: G. Parmentier (CERAG - Centre d'études et de recherches appliquées à la gestion - CNRS : UMR5820 - Université Pierre-Mendès-France - Grenoble II); Vincent Mangematin (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM))
    Abstract: The digital creative industries exemplify innovation processes in which user communities are highly involved in product and service development, bringing new ideas, and developing tools for new product uses and environments. We explore the role of user communities in such co-innovation processes via four case studies of interrelations between firms and their communities. The digitization and virtualization of firm/community interactions are changing how boundaries are defined and how co-innovation is managed. The transformation of innovation management is characterized by three elements: opening and redefining firm boundaries; opening of products and services to community input and reducing property rights; and reshaping organization and product identities. Innovation in collaboration with user communities requires firms to orchestrate their communities and their inter-relationships to encourage the creativity and motivation of users, and develop the community's innovatory capacity.
    Keywords: Online communities; User; Innovation; Video game; Community management; Co-innovation
    Date: 2013
  16. By: Alessandra Colombelli (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - Université Nice Sophia Antipolis [UNS] - CNRS : UMR6227); Francesco Quatraro (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - CNRS : UMR7321 - Université Nice Sophia Antipolis [UNS])
    Abstract: The paper investigates the patterns of persistence of innovation and of the properties of firms' knowledge base (KB) across a sample of Italian firms in the period 1998-2006. The analysis draws upon a theoretical representation of knowledge as a collective good, stemming from the recombination of knowledge bits that are fragmented and dispersed across economic agents. On this basis, we derived properties of the KB like the coherence, the cognitive distance and the variety, and investigated their patterns of persistence over time. The empirical analysis is implemented by exploring the autocorrelation structure of such properties within a quantile regression framework. The results suggest that the properties of knowledge are featured by somewhat peculiar patterns as compared to knowledge stock, and that such evidence is also heterogeneous across firms in different quantiles.
    Keywords: Persistence; Innovation; Knowledge Coherence; Variety; Cognitive Distance; Quantile regression; autocorrelation
    Date: 2013–09–27
  17. By: Caroline Scotto (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris)
    Abstract: This proposal is part of the thesis which is looking at the conception of the Campus Paris-Saclay (France) being part of the implementation of a nationwide public policy the main purpose of which to give France a higher education and research system of excellence. One of many reforms is to stimulate the scientific cooperation by grouping together some of the best French higher education institutions and to promote cooperation between public research and the economic world. The starting point of the research is to question what involves the notion of campus by looking at the hypothesis that a historical approach can create knowledge. We propose to focus on the principles of campus development in order to establish a morphological and functional genealogy of this object. The principles reveal that the purpose of the first campus was to organise a new community or to bring several communities together and create a social link between them, materialised by specifics shapes: quadrangle, galleries etc. What kind of knowledge can we use from empirical examples of cooperation in the business field (Axelrod, 1984) (Hatchuel, 1996) (Segrestin, 2006) to enhance the reflection and to conceive the spatial organisation of the cooperation between several partners of the campus? We propose to look at the actual management of emblematic projects for cooperation at Saclay, such as the Learning Center building and its spatial organisation in order to question if the new campus will create innovative conditions for the production of knowledge.
    Keywords: Campus design;cooperation; project management;public policy;spatial organisation
    Date: 2013–09–10
  18. By: Prostolupow, Irene; Pyka, Andreas; Heller-Schuh, Barbara
    Abstract: Research networks are regarded as channels for knowledge creation and diffusion and are thus essential for the development and integration of economies. In this paper we have a look at the long Turkish-German-migration history which should offer opportunities for both countries to benefit from brain circulation, transnational entrepreneurs and research networks. The present paper examines the structure of research networks of the European Framework Programmes (FP) that are established by joint participation of organizations in research projects, in particular German research organizations with Turkish participants in FP5 to FP7 in the knowledge-intensive technology fields ICT, Biotechnology and Nanoscience. A better understanding of these networks allows for improving the design of research policies at national levels as well as at the EU level. The empirical examination of network properties reveals that the diverse networks show a range of similarities in the three technology fields in each FP such as the small-world properties. Moreover, our findings show that German actors play a specific role in most examined research networks with Turkish participation. --
    Keywords: Turkish-German-migration history,brain circulation,innovation networks,research networks,EU Framework Programmes,small-world characteristics,centrality measures
    Date: 2013

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