New Economics Papers
on Collective Decision-Making
Issue of 2013‒10‒18
23 papers chosen by
Stan C. Weeber, McNeese State University

  1. Advertising Competition in Presidential Elections By Gordon, Brett R.; Hartmann, Wesley R.
  2. Voters are rational By Janne Tukiainen; Teemu Lyytikäinen
  3. Do Polls Create Momentum in Political Campaigns? By Denter, Philipp; Sisak, Dana
  4. Markovian Elections By Jean Guillaume Forand; John Duggan
  5. Patience and Time Consistency in Collective Decisions By Laurent Denant-Boèmont; Enrico Diecidue; Olivier L'Haridon
  6. Incumbency Advantage in Irish Elections: A Regression Discontinuity Analysis By Paul Redmond; John Regan
  7. Some further estimations for: Voting and economic factors in French elections for the European Parliament By Antoine Auberger
  8. Endogenous group formation in experimental contests By Herbst, Luisa; Konrad, Kai A.; Morath, Florian
  9. Imperfectly informed voters and strategic extremism By Enriqueta Aragones; Dimitrios Xefteris
  10. Do Single-Party and Coalition Governments Differ in their Economic Outcomes? Evidence from Finnish Municipalities By Meriläinen; Jaakko
  11. Unresponsive and Unpersuaded: The Unintended Consequences of Voter Persuasion Efforts By Bailey, Michael; Hopkins, Daniel J.; Rogers, Todd
  12. Guilt aversion and redistributive politics: A moral intuitionist approach By Le Garrec, Gilles
  13. A Dynamic Duverger's Law By Jean Guillaume Forand; Vikram Maheshri
  14. Radio and the rise of the Nazis in prewar Germany By Adena, Maja; Enikolopov, Ruben; Petrova, Maria; Santarosa, Veronica; Zhuravskaya, Ekaterina
  15. Indirect control and power in mutual control structures By Peters H.J.M.; Karos D.
  16. Optimal Voting Rules By Gershkov, Alex; Moldovanu, Benny; Shi, Xianwen
  17. Taking the Well-being of Future Generations Seriously : Do People Contribute More to Intra-temporal or Inter-temporal Public Goods? By Grolleau , Gilles G.; Sutan, Angela; Vranceanu, Radu
  18. Participatory Accountability and Collective Action: Experimental Evidence from Albania By Abigail Barr; Truman Packard; Danila Serra
  19. Political Cycles in Public Expenditure: Butter vs Guns By Bove, Vincenzo; Efthyvoulou, Georgios
  20. Partisan News before Fox: Newspaper Partisanship and Partisan Polarization, 1881-1972 By Groeling, Tim; Baum, Matthew
  21. Policy uncertainty, irreversibility, and cross-border flows of capital By Brandon Julio; Youngsuk Yook
  22. Cooperation in Small Groups: The Effect of Group Size By Daniele Nosenzo; Simone Quercia; Martin Sefton
  23. Fight Alone or Together? The Need to Belong By Ke, Changxia

  1. By: Gordon, Brett R. (Columbia University); Hartmann, Wesley R. (Stanford University)
    Abstract: Presidential candidates choose advertising strategically across markets based on each state's potential to tip the election. The winner-take-all rules in the Electoral College concentrate advertising in battleground states, ignoring most voters. We estimate an equilibrium model of competition between candidates to evaluate advertising and voting outcomes. In a direct vote counterfactual, all states receive positive advertising and both expenditures and turnout increase. Although states' political preferences drive competition in the Electoral College, candidates focus on cheap advertising targets in a direct vote. Simulations removing advertising price variation suggest a direct vote. Simulations removing advertising price variation suggest a direct vote spreads political attention uniformly across markets with diverse preferences.
    JEL: D72 L10 M37
    Date: 2013–08
  2. By: Janne Tukiainen; Teemu Lyytikäinen
    Abstract: We test whether voters are rational in the sense that their decision to vote depends on its expected impact on the election outcomes. By using exogenous variation in pivotal probabilities that arise at population thresholds determining council sizes in Finnish municipal elections, we provide the first causal evidence on this rational voting hypothesis. We find statistically significant, economically relevant and robust effects of crossing the threshold on turnout. Furthermore, we use a novel instrumental variables design to show that the changes in the pivotal probabilities rather than simultaneous changes in available candidates drive the results. Thus, the rational voter exists.
    Keywords: Local government elections; Rational voting hypothesis; Regression discontinuity design
    JEL: D72 C29
    Date: 2013–09–27
  3. By: Denter, Philipp; Sisak, Dana
    Abstract: We explore how public opinion polls affect candidates' campaign spending in political competition. Generally, polls lead to (more) asymmetric behavior. Under a majority rule there always exists an equilibrium in which the initially more popular candidate invests more in the campaign and thereby increases her lead in expectation: polls create momentum. When campaigning is very effective and the race is very close, a second type of equilibrium may exist: the trailing candidate outspends and overtakes his opponent. Regardless of the type of equilibrium, polls have a tendency to decrease expected total campaigning expenditures by amplifying ex-ante asymmetries between candidates and thus defusing competition. When candidates care also for their vote share in addition to having the majority, candidates' incentives crucially depend on the distribution of voters' candidate preferences.
    Keywords: Polls, political campaigns, feedback, momentum
    JEL: D02 D72 D74 D83
    Date: 2013–10
  4. By: Jean Guillaume Forand (Department of Economics, University of Waterloo); John Duggan (Department of Economics, University of Rochester)
    Abstract: We establish existence and continuity properties of equilibria in a model of dynamic elections with a discrete (countable) state space and general policies and preferences. We provide conditions under which there is a representative voter in each state, and we give characterization results in terms of the equilibria of an associated “representative voting game.” When the conditions for these results are not met, we provide examples that uncover new classes of dynamic political failures.
    JEL: C62 C73 D72
    Date: 2013–10
  5. By: Laurent Denant-Boèmont (CREM UMR CNRS 6211, University of Rennes 1, France); Enrico Diecidue (INSEAD, Fontainebleau, France); Olivier L'Haridon (CREM UMR CNRS 6211 and GREGHEC, University of Rennes 1, France)
    Abstract: We present new evidence from the lab on the outcomes resulting from collective and individual decisions over time. We combined static and longitudinal methods to test four conditions on individual and collective time preferences: impatience, stationarity, age independence, and dynamic consistency. The collective decision process was designed to favor coordination through initial communication over voting intentions. Our main results are the following. First, individuals were impatient and deviated from consistent behavior. On the other hand, groups made patient and highly consistent decisions. Our voting mechanism helped the groups to converge and make stable and dynamically consistent decisions.
    Date: 2013–09
  6. By: Paul Redmond (Department of Economics Finance and Accounting, National University of Ireland, Maynooth); John Regan
    Abstract: Ireland provides an interesting setting for the study of incumbency advantage. Its electoral system creates incentives for political candidates to cultivate a loyal, personal following and the rate of incumbent re-election is one of the highest in the world. This paper exploits the quasi-experimental features of the system of proportional representation with a single transferable vote (PR-STV) to estimate incumbency advantage in Ireland’s lower house of parliament. In very close elections, where there is a narrow margin of victory, it is likely that bare winners are comparable in their unobservable characteristics to bare losers. Regression discontinuity design (RDD) identifies the causal effect of incumbency by comparing the subsequent electoral outcomes of bare winners and losers. The analysis indicates that incumbency causes an eighteen percentage point increase in the probability that a candidate is successful in a subsequent election. We show that Ireland’s multi-party, multi-candidate system is particularly suited to the application of the RDD methodology.
    Keywords: incumbency advantage, regression discontinuity, non-parametric, Irish elections, proportional representation
    JEL: C21 D72
    Date: 2013
  7. By: Antoine Auberger (IRGEI - Institut de Recherche sur la Gouvernance et l'Economie des Institutions - Université Paris II - Panthéon-Assas)
    Abstract: The purpose of this note is to complete the estimates made in Auberger (2012) for French presidential elections. We study the influence of the local unemployment on the vote for French presidential elections. We build another variable taking into account the responsibility of the incumbent President for the economic situation after a cohabitation period. We also make estimates for the second-round vote of French presidential elections (without the 2002 French presidential election or with an estimated vote for this election). We show that over the 1988-2007 period (without 2002), it is not necessary to take into account the influence of cohabitation periods on the responsibility of the government in relation to the economic situation.
    Keywords: Vote functions ; French elections ; European Parliament ; Election forecasting ; Local unemployment
    Date: 2013–09–12
  8. By: Herbst, Luisa; Konrad, Kai A.; Morath, Florian
    Abstract: We study endogenous group formation in tournaments employing experimental three-player contests. We find that players in endogenously formed alliances cope better with the moral hazard problem in groups than players who are forced into an alliance. Also, players who are committed to expending effort above average choose to stand alone. If these players are forced to play in an alliance, they invest even more, whereas their co-players choose lower effort. Anticipation of this exploitation may explain their preference to stand alone.
    Keywords: Endogenous group formation; contest; conflict; alliance; experiment; moral hazard problem; free-riding; in-group favoritism
    JEL: D72 D74
    Date: 2013–04–22
  9. By: Enriqueta Aragones; Dimitrios Xefteris
    Abstract: We analyze a unidimensional model of two-candidate electoral competition where voters have im- perfect information about the candidates' policy proposals, that is, voters cannot observe the exact policy proposals of the candidates but only which candidate offers the most leftist/rightist platform. We assume that candidates are purely office motivated and that one candidate enjoys a valence advan- tage over the other. We characterize the unique Sequential Equilibrium in very-weakly undominated strategies of the game. In this equilibrium the behavior of the two candidates tends to maximum extremism, due to the voters' lack of information. But it may converge or diverge depending on the size of the advantage. For small values of the advantage candidates converge to the extreme policy most preferred by the median and for large values of the advantage candidates strategies diverge: each candidate specializes in a different extreme policy. These results are robust to the introduction of a proportion of well informed voters. In this case the degree of extremism decreases when the voters become more informed.
    Keywords: Downsian model; imperfect information; advantaged candidate; maximum differentiation
    JEL: D72
    Date: 2013–10–14
  10. By: Meriläinen; Jaakko
    Abstract: Even though Finland has proportional elections, single-party control in Finnish local councils is not uncommon contrary to what one might expect. The largest party holds more than half of the seats in every third Finnish local council and is thus likely to govern alone. This study investigates whether single-party and coalition governed municipalities differ in their economic outcomes. Common pool models predict that when there is a governing coalition, all the parties aim to target some spending at their core constituents, while costs are shared equally across all parties. This would mean that coalition governments result in higher spending. Using data from 445 Finnish municipalities for the years 1980?2010, I provide causal evidence that is consistent with the predictions of common pool models. Estimates suggest that single-party control decreases total expenditures and revenues by around 200?300 euros per capita. I also analyze the effect in several areas of spending and revenues, but do not find any clear results. I exploit close elections as a source of exogenous variation using a regression discontinuity design (RDD) approach tailored for proportional elections.
    Keywords: single-party control, coalition governments, common pool problem, municipal elections, proportional system, regression discontinuity design
    JEL: H72 H71 R50
    Date: 2013–10–07
  11. By: Bailey, Michael (Georgetown University); Hopkins, Daniel J. (Georgetown University); Rogers, Todd (Harvard University)
    Abstract: Can randomized experiments at the individual level help assess the persuasive effects of campaign tactics? In the contemporary U.S., vote choice is not observable, so one promising research design involves randomizing appeals and then using a survey to measure vote intentions. Here, we analyze one such field experiment conducted during the 2008 presidential election in which 56,000 registered voters were assigned to persuasion in person, by phone, and/or by mail. Persuasive appeals by canvassers had two unintended consequences. First, they reduced responsiveness to the follow-up survey, lowering the response rate sharply among infrequent voters. Second, various statistical methods to address the resulting biases converge on a counterintuitive conclusion: the persuasive canvassing reduced candidate support. Our results allow us to rule out even small effects in the intended direction and illustrate the backlash that attempts at inter-personal persuasion can engender.
    Date: 2013–09
  12. By: Le Garrec, Gilles
    Abstract: In mainstream economics individuals are supposed to be driven only by their self-interest. By contrast, surveys clearly show that people do care about fairness in their demand for redistribution. In this article, in the spirit of the new synthesis in moral psychology (Haidt, 2007: The new synthesis in moral psychology) the author proposes to modelize the voting behavior over redistribution as the interaction between (a) an automatic cognitive process which quickly generates intuitions on the fair level of redistribution, (b) a rational self-oriented reasoning which controls the feeling of guilt associated with fair intuitions. In addition, considering that guilt aversion depends on the cultural context, the author shows that the model exhibits a multiplicity of history-dependent steady states which may account for the huge difference of redistribution observed between Europe and the United States. --
    Keywords: redistribution,voting behavior,fairness,behavioral economics
    JEL: D03 D64 D72 H53
    Date: 2013
  13. By: Jean Guillaume Forand (Department of Economics, University of Waterloo); Vikram Maheshri (Department of Economics, University of Houston)
    Abstract: Electoral systems promote strategic voting and aect party systems. Duverger (1951) proposed that plurality rule leads to bi-partyism and proportional representation leads to multi-partyism. We show that in a dynamic setting, these static eects also lead to a higher option value for existing minor parties under plurality rule, so their incentive to exit the party system is mitigated by their future benets from continued participation. The predictions of our model are consistent with multiple cross-sectional predictions on the comparative number of parties under plurality rule and proportional representation. In particular, there could be more parties under plurality rule than under proportional representation at any point in time. However, our model makes a unique time-series prediction: the number of parties under plurality rule should be less variable than under proportional representation. We provide extensive empirical evidence in support of these results.
    JEL: C73 D72
    Date: 2013–10
  14. By: Adena, Maja; Enikolopov, Ruben; Petrova, Maria; Santarosa, Veronica; Zhuravskaya, Ekaterina
    Abstract: How far can the media protect or undermine democratic institutions in unconsolidated democracies, and how persuasive can they be in ensuring public support for dictator's policies? We study this question in the context of Germany between 1929 and 1939. Using geographical and temporal variation in radio availability, we show that radio had a significant negative effect on the Nazi electoral support between 1929 and 1932, when political news were slanted against Nazi party. This effect was reversed in just 5 weeks following Hitler's appointment as chancellor and the transfer of control of the radio to the Nazis. Pro-Nazi radio propaganda caused higher vote for the Nazis in March 1933 election. After full consolidation of power, radio propaganda helped the Nazis to enroll new party members and encouraged denunciations of Jews and other open expressions of anti-Semitism. The effect of Nazi propaganda was not uniform. Depending on listeners' priors about the message, propaganda could be very effective or could backfire. Nazi radio was most effective in places where anti- Semitism was historically high and had a negative effect on the support for anti-Semitic policies in places with historically low anti-Semitism. -- Inwieweit können die Medien zum Schutz oder zur Untergrabung ungefestigter Demokratien beitragen? Und inwieweit können sie Unterstützung für die Politik des Diktators generieren? Wir analysieren diese Fragen im Kontext der Weimarer Republik ab 1929 und des NS-Regimes bis 1939. Die voranschreitende technische Entwicklung dieser Zeit erlaubt uns die geografische und zeitliche Veränderung der Radioempfangsqualität für Identifikationszwecke zu nutzen. In der Zeit zwischen 1929 und 1932, in der das Rundfunkprogramm pro-demokratisch und gegen die NSDAP ausgerichtet war, hatte das Radio einen signifikant negativen Einfluss auf die Wahlergebnisse der NSDAP. Dieser Effekt wurde bereits 5 Wochen nach der Ernennung Hitlers zum Kanzler und der Kontrollübernahme über das Rundfunkprogramm umgekehrt. Die intensive NS-Propaganda im Radio während dieser Zeit bewirkte einen Stimmenzuwachs für die NSDAP bei den Reichstagswahlen in März 1933. Nachdem die Nazis ihre Macht konsolidiert hatten, trug die Rundfunkpropaganda messbar zu vermehrten Parteieintritten und zur Zustimmung der Bevölkerung bei der Denunziation von Juden und zu anderen Formen des offenen Antisemitismus bei. Dennoch war der Einfluss der NS-Propaganda nicht uniform. Je nach Voreingenommenheit der Zuhörer konnte die Propaganda sehr effektiv oder aber kontraproduktiv sein. Das NS-Radio war am effektivsten in Orten mit historisch hohem Antisemitismus und hatte einen negativen Effekt auf die Unterstützung der antisemitischen Politik in Orten mit historisch niedrigem Antisemitismus.
    Keywords: anti-semitism,dictatorship,media,Nazis,propaganda,unconsolidated democracy
    JEL: D72 L82 N74
    Date: 2013
  15. By: Peters H.J.M.; Karos D. (GSBE)
    Abstract: In a mutual control structure agents exercise control over each other. Typical examples occur in the area of corporate governance firms and investment companies exercise mutual control, in particular by owning each others stocks. In this paper we formulate a general model for such situations. There is a fixed set of agents, and a mutual control structure assigns to each subset coalition the subset of agents controlled by that coalition. Such a mutual control structure captures directcontrol. We propose a procedure in order to incorporate indirect control as well if S controls T, and S and T jointly control R, then S controls R indirectly. This way, invariant mutual control structures result. Alternatively, mutual control can be described by vectors of simple games, called simple gamestructures, each simple game describing who controls a certain player, and also those simple games can be updated in order to capture indirect control. We show that both approaches lead to equivalent invariant structures. In the second part of the paper, we axiomatically develop a class of power indices for invariant mutual control structures. We impose four axioms with a plausible interpretation in this framework, which together characterize a broad class of power indices based on dividends resulting both from exercising and from undergoing control. By adding an extra condition a unique power index is singled out. In this index, each player accumulates his Shapley-Shubik power index assignments from controlling other players, diminished by the sum of the Shapley-Shubik power index assignments to other players controlling him.
    Keywords: Cooperative Games; Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance;
    JEL: C71 G34
    Date: 2013
  16. By: Gershkov, Alex; Moldovanu, Benny; Shi, Xianwen
    Abstract: We study dominant strategy incentive compatible (DIC) and deterministic mechanisms in a social choice setting with several alternatives. The agents are privately informed about their preferences, and have single-crossing utility functions. Monetary transfers are not feasible. We use an equivalence between deterministic, DIC mechanisms and generalized median voter schemes to construct the constrained-efficient, optimal mechanism for an utilitarian planner. Optimal schemes for other welfare criteria such as, say, a Rawlsian maximin can be analogously obtained.
    Date: 2013–08–07
  17. By: Grolleau , Gilles G. (LAMETA, UMR 1135 and LESSAC); Sutan, Angela (LESSAC); Vranceanu, Radu (ESSEC Business School and THEMA)
    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
    JEL: C72 C92 H41
    Date: 2013–09
  18. By: Abigail Barr (School of Economics, University of Nottingham); Truman Packard (World Bank); Danila Serra (School of Economics, Florida State University)
    Abstract: It has been argued that accountability is a public good that only citizens can provide. Governments can put institutions in place that allow citizens to hold public servants to account, but citizens must participate in those institutions if accountability is to be achieved. Thus, citizens face a social dilemma – participate in holding public servants to account at a cost in terms of time and effort or free ride, i.e. do not participate, while benefiting from the efforts of those who do. If this characterization of accountability is valid, we would expect more cooperatively inclined citizens to participate in accountability institutions, while the less cooperatively inclined do not. We test the validity of this characterization by investigating the correlation between individual behavior in a simple public goods game and their participation in local and national accountability institutions in Albania. We study a nationally representative sample of 1800 adults with children in primary school. We find significant correlations between cooperativeness and participation in school accountability institutions and national elections, both at the individual level and the district level. These correlations are robust to the introduction of many controls in the analysis and, in the case of national elections, to the use of official election turn-out statistics in place of self-reported turn-out.
    Keywords: accountability; participation; elections; collective action; public good game
    Date: 2013–08
  19. By: Bove, Vincenzo (University of Essex); Efthyvoulou, Georgios (University of Sheffield)
    Abstract: This paper investigates how the timing of elections and government ideological motivations influence the dynamics of social and military expenditure in a panel of 22 OECD countries over the period 1988-2008. Three basic results emerge: First, governments tend to bias outlays towards social expenditure and away from military expenditure at election times. Second, membership in the NATO alliance affects the timing of election-driven military spending manipulations. Third, partisan distinctions are clearly discernible but differ between the two types of expenditure: while certain categories of social expenditure are higher during left administrations, military expenditure are higher during right administrations.
    Keywords: elections; partisanship; social expenditure; military expenditure
    JEL: C33 D72 H53 H56 P16
    Date: 2013–10–09
  20. By: Groeling, Tim (University of CA, Los Angeles); Baum, Matthew (Harvard University)
    Abstract: How do partisan media affect polarization and partisanship? The rise of Fox News, MSNBC, and hyper-partisan outlets online gives this question fresh salience, but in this paper, we argue that the question is actually not new: prior to the broadcast era, newspapers dominated American mass communication. Many of these were identified as supporting one party over the other in their news coverage. While scholars have studied the composition and impact of the partisan press during their 19th-century height, the political impact of the gradual decline of these partisan papers remains relatively under-examined. The unnoted vitality and endurance of partisan newspapers (which constituted a majority of American newspapers until the 1960s) represents a huge hole in our understanding of how parties communicate. As a consequence of this omission, scholars have ignored a potentially vital contributing factor to changing patterns of partisan voting. In this paper, we examine both the degree and influence of partisanship in historical newspapers. We begin by content analyzing news coverage in the Los Angeles Times from 1885-1986 and the Atlanta Constitution from 1869-1945. To avoid problems of selection bias and the absence of a neutral baseline of coverage in the coded news, we focus on a subset of partisan news for which we have access to neutral coverage of a full population of potential stories: the obituaries of U.S. Senators. By coding whether and how the papers covered the deaths of these partisans over time, we are able to systematically test for bias. We then collect information on newspaper editorial stances from Editor and Publisher's Annual Yearbook to examine the impact of newspaper partisanship on voting patterns in presidential elections from 1932-92. Specifically, we test whether the proportion of partisan news outlets in a given media market explains changes in the rate of polarized voting.
    Date: 2013–10
  21. By: Brandon Julio; Youngsuk Yook
    Abstract: We examine the effects of government policy uncertainty on cross-border capital flows. FDI flows from US companies to foreign affiliates drop significantly during the period just before an election. The election effect for FDI is larger than election cycles in domestic investment. The electoral patterns in FDI flows are more pronounced in countries with higher propensities for policy reversals and when election outcomes are more uncertain. Our identification strategy compares variation in different types of capital flows into the same country around the timing of national elections. The electoral cycles are present in relatively irreversible FDI flows but not in foreign portfolio investment flows, suggesting a likely causal link from political uncertainty to and capital flows.
    Date: 2013
  22. By: Daniele Nosenzo (School of Economics, University of Nottingham); Simone Quercia (School of Economics, University of Nottingham); Martin Sefton (School of Economics, University of Nottingham)
    Abstract: We study the effect of group size on cooperation in voluntary contribution mechanism games. As in previous experiments, we study four- and eight-person groups in high and low marginal per capita return (MPCR) conditions. We find a positive effect of group size in the low MPCR condition, as in previous experiments. However, in the high MPCR condition we observe a negative group size effect. We extend the design to investigate two- and three-person groups in the high MPCR condition, and find that cooperation is highest of all in two-person groups. The findings in the high MPCR condition are consistent with those from n-person prisoner’s dilemma and oligopoly experiments that suggest it is more difficult to sustain cooperation in larger groups. The findings from the low MPCR condition suggest that this effect can be overridden. In particular, when cooperation is low other factors, such as considerations of the social benefits of contributing (which increase with group size), may dominate any negative group size effect.
    Keywords: voluntary contribution mechanism, cooperation, group size
    Date: 2013–05
  23. By: Ke, Changxia
    Abstract: Alliances often face both free-riding and hold-up problems, which under- mine the effectiveness of alliances in mobilizing joint fighting effort. Despite of these disadvantages, alliances are still ubiquitous in all types of contests. This paper asks if there are non-monetary incentives to form alliances, e.g., intimidating/discouraging the single player(s) who is/are left alone. For this purpose, I compare symmetric (2 vs. 2) and asymmetric (2 vs. 1) contests to their equivalent 4-player and 3-player individual contests, respectively. We find that alliance players in symmetric (2 vs. 2) contests behave the same as those in equivalent 4-player individual contests. However, in asymmetric (2 vs. 1) contests, stand-alone players were strongly discouraged to exert effort (especially the females), compared to the 3-player individual contests. Alliance players may have anticipated this effect and also reduced their effort, if alliances share the prize according to the merit rule. Behavioural factors such as the need to belong can help reconcile the "paradox of alliance formation".
    Keywords: Alliance Formation; Contest and Conflict; Experiment
    JEL: D72 D74 C91
    Date: 2013–03–12

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