New Economics Papers
on Collective Decision-Making
Issue of 2013‒11‒14
seventeen papers chosen by
Stan C. Weeber, McNeese State University

  1. Voter Turnout and the Size of Government By Aggeborn, Linuz
  2. Path-Breakers: How Does Women’s Political Participation Respond to Electoral Success? By Sonia Bhalotra; Irma Clots-Figueras; Lakshmi Iyer
  3. Power Brokers: Middlemen in Legislative Bargaining By Matias Iaryczower; Santiago Oliveros
  4. Religious origins of democracies and dictatorships By Grigoriadis, Theocharis
  5. The political economics of redistribution, inequality and tax avoidance By Bethencourt, Carlos; Kunze, Lars
  6. Over-Confidence and Entrepreneurial Choice Under Ambiguity By Shyti , Anisa
  7. Experimentation in Federal Systems By Steven Callander; Bård Harstad
  8. An allocation rule for dynamic random network formation processes By Jean-François Caulier; Michel Grabisch; Agnieszka Rusinowska
  9. The Impact of Behavioral Factors in the Renewable Energy Investment Decision Making Process: Conceptual Framework and Empirical Findings By Masini, Andrea; Menichetti , Emanuela
  10. The Fuzzy WOD Model: Decision Support under Imprecision and Relevance By Camilo Franco; Jens Leth Hougaard; Kurt Nielsen
  11. Time Delay and Support for Taxation By Tiezzi, Silvia; Xiao, Erte
  12. Unpacking the Principle of Openness in EU Law: Transparency, Participation and Democracy By Alemanno , Alberto
  13. The social legitimation of biomedical Technologies in Russia: communication challenges for science and society By Valentina Poliakova
  14. The gendered nature of intra-household decision making in and across Europe By Alyssa Schneebaum; Katharina Mader
  15. The integrated approach for Foresight evaluation: the Russian case By Anna Sokolova
  16. Prospects for regulatory convergence under TTIP By Suparna Karmakar
  17. Local government and small business:mismatch of expectations By Juri Plusnin; Jaroslav Slobodskoy-Plusnin

  1. By: Aggeborn, Linuz (Uppsala Center for Fiscal Studies)
    Abstract: This paper investigates the causal link between voter turnout and policy outcomes related to the size of government. Tax rate and public expenditures are the focal policy outcomes in this study. To capture the causal mechanism, Swedish and Finnish municipal data are used and a constitutional change in Sweden in 1970 is applied as an instrument for voter turnout in local elections. In 1970, Sweden moved from having separate election days for different levels of government,among other things, to a system with a single election day for political elections, thus reducing the cost associated with voting. This constitutional reform increased voter turnout in local elections in Sweden. The overall conclusion of this paper is that higher voter turnout yields higher municipal taxes and larger local public expenditures. Second,there is some evidence that higher turnout decreases the vote share for right-wing parties.
    Keywords: Voter Turnout; Size of government; Sweden; Finland; Local public finance; Instrumental variable regression
    JEL: D70 D72 H39
    Date: 2013–11–04
  2. By: Sonia Bhalotra (University of Essex); Irma Clots-Figueras (Universidad Carlos III de Madrid); Lakshmi Iyer (Harvard Business School, Business, Government and the International Economy Unit)
    Abstract: This paper analyzes the effect of a woman's electoral victory on women's subsequent political participation. Using the regression discontinuity afforded by close elections between women and men in India's state elections, we find that a woman winning office leads to a large and significant increase in the share of female candidates from major political parties in the subsequent election. This stems mainly from an increased probability that previous women candidates contest again, an important margin in India where a substantial number of incumbents do not contest re-election. There is no significant entry of new female candidates, no change in female or male voter turnout and no spillover effects to neighboring areas. Further analysis points to a reduction in party bias against women candidates as the main mechanism driving the observed increase in women's candidacy.
    JEL: J16 J71 P16
    Date: 2013–11
  3. By: Matias Iaryczower; Santiago Oliveros
    Abstract: We consider a model of decentralized bargaining among three parties. Parties meet one-on-one after being randomly matched, and can sell or buy votes to one another. The party with a majority of the votes can decide to implement its preferred policy or extend negotiations to capture additional rents. We provide necessary and suffcient conditions for the existence of an equilibrium in which a party acts as an intermediary, transferring resources and voting rights among parties that wouldn't negotiate directly with one another. These conditions are generic, do not require special frictions, and include `well-behaved' (i.e., single-peaked) preference profiles.
    Date: 2013–01–19
  4. By: Grigoriadis, Theocharis
    Abstract: In this paper, I argue that religion matters for the emergence of democracies and dictatorships. Religion is defined as a stochastically set demand for public goods. Different types of religious collectives reflect different tradeoffs between centralized resource distribution and market rewards. Religions are defined as collectivist, when their respective collectives facilitate the hierarchical provision of common pool resources toward their members at the expense of market incentives. Religions are defined as individualist, when their respective collectives recruit and preserve their members on the basis of market incentives. Islam, Orthodoxy and Catholicism are treated as collectivist religions, whereas Judaism and Protestantism as individualist ones. I provide a historical overview that designates the Jewish kibbutz as the collective of democracy and the Russian-Orthodox monastery as the collective of dictatorship. Assuming a collectivist economy, I solve the radical government and modernization stochastic games. I find that modernization occurs in a collectivist economy when the threat of a radical government is imminent and when the leader has high extraction rents over the economy. In order to stay in power, the leader credibly commits to provide more public goods in the future, and thus modernization occurs. Underdevelopment occurs at intermediate levels of state enforcement, modernization at low levels and centralization at high levels of state enforcement. The emergence of a radical government is more likely in a collectivist rather than in an individualist economy. --
    Keywords: democracy,dictatorship,collectivism,individualism,modernization,Orthodoxy,Judaism
    JEL: D72 D73 D78 P21 P26 P32 P51 Z12
    Date: 2013
  5. By: Bethencourt, Carlos; Kunze, Lars
    Abstract: A benchmark result in the political economy of taxation is that the degree of redistribution is positively linked to income inequality. However, empirical evidence supporting such a relationship turns out to be mixed. This paper shows how these different empirical reactions can be rationalized within a simple model of tax avoidance and costly tax enforcement. By focussing on structure induced equilibria in which taxpayers vote over the size of the income tax and the level of tax enforcement, we show that higher inequality may well decrease the extent of redistribution, depending on two opposing effects: the standard political effect and a negative tax base effect working through increases in the average level of tax avoidance and the share of enforcement expenditures in total tax revenue.
    Keywords: Tax avoidance, Voting, Redistribution
    JEL: D72 H26 H31
    Date: 2013–10–31
  6. By: Shyti , Anisa
    Abstract: Entrepreneurship studies have attributed to over-confidence decisions to start a new venture. Many decision situations, through which over-confidence is measured, entail some degrees of uncertainty, (e.g., related to own skill or to competition). The aspect of uncertainty is largely neglected in over-confidence studies or entrepreneurial research. Both uncertainty and over-confidence influence individuals’ likelihood perceptions. Nevertheless, these two aspects are seldom jointly investigated, and the little evidence provides inconclusive results. In this study, we experimentally investigate how uncertainty, as a property of the situation, and over-confidence, as a characteristic of decision makers’ beliefs, influence choice behavior. Our findings with Executive MBA participants show that over-confident decision makers choose less uncertain options for low likelihood outcomes and more uncertain options for high likelihood outcomes, contrary to neutral confidence decision makers, whose choices are in line with standard Prospect Theory predictions
    Keywords: entrepreneurship; ambiguity attitudes; decision making; over-con fidence
    JEL: D80 D81 L26
    Date: 2013–05–21
  7. By: Steven Callander; Bård Harstad
    Abstract: We present a model where heterogeneous districts choose both whether to experiment and the policies to experiment with. Since districts learn from each other, the first-best requires that policy experiments converge so that innovations are useful also for neighbors. However, the equilibrium implies the reverse – policy divergence – since each district uses its policy choice to discourage free-riding. We then study a clumsy central government that harmonizes final policy choices. This progressive concentration of power induces a policy tournament that can increase the incentive to experiment and encourage policy convergence. We derive the best political regime as well as the optimal levels of heterogeneity, transparency, prizes, and intellectual property rights.
    JEL: D78 H77
    Date: 2013–10
  8. By: Jean-François Caulier (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); Michel Grabisch (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Agnieszka Rusinowska (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: Most allocation rules for network games presented in the literature assume that the network structure is fixed. We put explicit emphasis on the construction of networks and examine the dynamic formation of networks whose evolution across time periods is stochastic. Time-series of networks are studied that describe processes of network formation where links may appear or disappear at any period. Moreover, convergence to an efficient network is not necessarily prescribed. Transitions from one network to another are random and yield a Markov chain. We propose the link-based allocation rule for such dynamic random network formation processes and provide its axiomatic characterization. By considering a monotone game and a particular (natural) network formation process we recover the link-based flexible network allocation rule of Jackson.
    Keywords: Dynamic networks; network game; link-based allocation rule; Markov chain; characterization
    Date: 2013–08
  9. By: Masini, Andrea; Menichetti , Emanuela
    Abstract: Investments in renewable energy (RE) technologies are regarded with increasing interest as an effective means to stimulate growth and accelerate the recovery from the recent financial crisis. Yet, despite their appeal, and the numerous policies implemented to promote these technologies, the diffusion of RE projects remains somehow below expectations. This limited penetration is also due to a lack of appropriate financing and to a certain reluctance to invest in these technologies. In order to shed light on this phenomenon, in this paper we examine the decision making process underlying investments in RE technologies. We propose and test a conceptual model that examines the structural and behavioral factors affecting the investors decisions as well as the relationship between RE investments and portfolio performance. Applying econometric techniques on primary data collected from a sample of European investors, we study how the investors a-priori beliefs, their preferences over policy instruments and their attitude toward technological risk affect the likelihood of investing in RE projects. We also demonstrate that portfolio performance increases with an increase of the RE share in the portfolio. Implications for scholars, investors, technology managers and policy makers are derived and discussed.
    Keywords: Adaptive conjoint analysis; behavioral finance; investments; renewable energy policy; multivariate regression;
    JEL: Q00
    Date: 2013–04–13
  10. By: Camilo Franco (Department of Food and Resource Economics, University of Copenhagen); Jens Leth Hougaard (Department of Food and Resource Economics, University of Copenhagen); Kurt Nielsen (Department of Food and Resource Economics, University of Copenhagen)
    Abstract: This paper extends the Weighted Overlap Dominance (WOD) model (initially presented in J.L. Hougaard, K. Nielsen. Weighted Overlap Dominance - A procedure for interactive selection on multidimensional interval data. Applied Mathematical Modelling 35, 2011, 3958 - 3969), as an outranking approach for decision support and multidimensional interval analysis. First, the original approach is extended using fuzzy set theory which makes it possible to handle both non-interval and interval data. Second, we re-examine the ranking procedure based on semi-equivalence classes and suggest a new complementary ranking procedure. The new ranking procedure introduces relevance degrees for ranking the given set of alternatives. In this way, a complete methodology is presented for identifying recommended solutions that aid the decision-maker when facing a specific problem, by ranking alternatives according to their relevance under imprecise measurements.
    Keywords: weighted overlap dominance, outranking, fuzzt data, interval imprecision, relevance ranking
    Date: 2013–10
  11. By: Tiezzi, Silvia; Xiao, Erte
    Abstract: People often experience the benefits of taxation with time. We design experiments to test the hypothesis that delaying the benefits of taxation can lead to low support for taxes. In a dynamic market experiment with negative externalities, we consistently find that people are less willing to accept Pigouvian taxes, aimed at reducing negative externalities and restoring market efficiency, when the negative externalities are delayed. While people learn to adopt taxation when the negative externality occurs immediately, the resistance to taxation remains robust over time when the externality is delayed. Our data suggest that people are less likely to support taxation when they found it difficult to understand the working of the new institution. We discuss the policy implications of our findings for promoting support for taxation.
    Keywords: lab experiments, externalities, support for taxation, discounting
    JEL: D03 D62 D72 H23
    Date: 2013–10
  12. By: Alemanno , Alberto
    Abstract: The purpose of this article is to shed some light on the emerging, yet largely undefined, principle of openness in EU law. After addressing the semantic confusion existing between openness and transparency, it attempts – through a textual and systemic interpretation of their respective legal basis – to identify the normative content of the EU turn to openness. It then moves to explore the principle’s potential for attaining its declared Treaty-sanctioned objectives: promoting good governance and ensuring the participation of civil society in the democratic life of the Union. It illustrates that, although openness largely maintains an instrumental rationale – aimed at enhancing the quality of the regulatory outcome rather than at promoting a more inclusive process –, the institutional, substantive and societal landscapes surrounding its operation have changed in recent times. It demonstrates that these alterations may help to shift the understanding of openness in the EU away from a specific, unidirectional, bottom-up right of access to information to a much broader, proactive and top-down duty of the EU administration to genuinely open its vault of information to the public and create new avenues of participation for civil societies and other organised interests. The changing nature of the openness rights accompanied by the growing demand for more active participation inherent to our times is set to reinvigorate civic life and, more importantly, to ensure political legitimacy grounded in democratic values.
    Keywords: Open government; Transparency; Participation; Civic empowerment; Legitimacy; Accountability; Civil society; European Union; Good governance;
    JEL: K19 K33
    Date: 2013–07–30
  13. By: Valentina Poliakova (Research Fellow, Institute of Statistical Studies and Economics of Knowledge, National Research University – Higher School of Economics)
    Abstract: Throughout history the development of medical institution was followed by the extension of medical expertise boundaries. Progress in new medical biotechnologies and the manipulation of human biological material, in particular, raise the conceptual question of how to define the boundaries between human beings and biological material. This paper focuses on the analysis of attitudes towards research on the human body, in scientific, political and cultural discourse. In public discussions about stem cell technology we found that the extension of medical expertise boundaries caused an intervention of ethical expertise in the fields of science and medicine. Nevertheless, the cultural conflict does not become an obstacle to the recognition of stem cell research and its legitimation in the collective consciousness.
    Keywords: stem cells, bioethics, public opinion, bans on scientific research, discourse.
    JEL: I10 I11 I18 O33 O38
    Date: 2013
  14. By: Alyssa Schneebaum (Department of Economics, Vienna University of Economics and Business); Katharina Mader (Department of Economics, Vienna University of Economics and Business)
    Abstract: After surveying the literature on the economics of household decision-making, we employ data from the 2010 European Union Survey on Income and Living Conditions (EU-SILC) to study the relationship between personal characteristics such as gender and decision-making power and responsibility. We find that across Europe, women more often make decisions about everyday spending and purchases for children, while it is mainly men who make the financial decisions in a household. Greater intrahousehold inequality in income and education is correlated with a lower probability of couples making decisions together, as is having a housewife in the home. Interesting patterns of household decision-making across countries emerge; in the Southern European countries, for example, educational differences do not seem to be strongly related to decision-making power and responsibility, and women in Eastern European countries are more likely to make financial decisions when the household reports facing difficult economic conditions.
    Keywords: intra-household decision making; Europe; bargaining power
    JEL: D13 R2 P52 B54
    Date: 2013–10
  15. By: Anna Sokolova (National Research University Higher School of Economics (Russia), Laboratory for Science and Technology Studies, senior research fellow)
    Abstract: As the impact of strategic decision-making at the corporate, sectoral and national levels increases, there are growing demands for high quality and solid Foresight outputs. In this regard, a timely detection and elimination of problems in Foresight projects is of great importance. A thorough evaluation of criteria and methods used in Foresight analysis would permit the improved effectiveness of Foresight activities. The results could be set against the aims to decide on the feasibility of projects and identify ways to improve them. Despite great interest in Foresight evaluation demonstrated by stakeholders at various levels, the general principles for conducting it have not yet been formulated, which hinders its development and the diffusion of successful expertise. The purpose of this paper is to develop an integrated approach for the evaluation of Foresight projects, including their classification, basic criteria to evaluate project realisation, results and impact and a SWOT analysis. The proposed methodology was tested on Russian National Foresight 2030 and the results are described and analysed. Further ways of developing this approach are suggested
    Keywords: foresight, evaluation, Russia
    JEL: O22 O32
    Date: 2013
  16. By: Suparna Karmakar
    Abstract: An ambitious, comprehensive and high-standard trade and investment agreement between the European Union and the United States is feasible, but a key concern is whether the transatlantic trade partners will succeed in creating a meaningful agreement within the tight timeline of the Transatlantic Trade and Investment Partnership (TTIP) negotiations. The target of a ratified pact before a new European Commission takes office in November 2014 is an objective that is likely to conflict with the level of ambition on the substance. Regulatory congruence would require the unilateral and unconditional recognition by the TTIP partners of each otherâ??s standards, procedures and conformity assessment tests. The way forward is to create a â??livingâ?? (or progressive commitment) agreement on regulatory cooperation with a horizontal template for coherence and conformity assessment and a detailed monitoring mechanism, with implementation starting immediately for a few selected sectors. Regulatory harmonisation under TTIP may not lead to emerging markets automatically upgrading to the higher TTIP standards. Domestic priorities and the high demand from a rising price-sensitive group of consumers will likely result in a dual regulatory regime in emerging markets in the medium-term.
    Date: 2013–11
  17. By: Juri Plusnin (National Research University Higher School of Economics. Faculty of Public Administration. Professor); Jaroslav Slobodskoy-Plusnin (Russian Academy of Sciences. Institute of Higher Nervous Activity and Neurophysiology. Researcher;)
    Abstract: The article summarizes the data from a few tens of interviews with entrepreneurs – representatives of a small business. The purpose of the interview was to discover expectations and suggestions from entrepreneurs to the local and state government. Interview data reveal the profound contradictions between the business and the authorities. These contradictions are based not only on results of the local administration’s actions, but also on the specific current status of local (self-)government that makes it impossible to effectively interact with the business. On the other hand, the development of local businesses has led to a peculiar configuration of the business community, also making it difficult to communicate with the authorities. As a result is trying to get protection from the local government that leads to inadmissible merging of business and government and monopolizing of business in almost every district. Direct consequences of such a merging are government inefficiency, lack of incentives for business development, and stagnation. Some “evolutionary stable strategy” has been developed, that does not allow winning any of the actors yet saving them from loses in competition with the outside players. Understanding of the inefficiency and dead-end of such an interaction by some entrepreneurs forces them to raise claims to local authority. Interviews analyses resulted in the list of complaints and suggestions on how to optimize an interaction between the local business and local authorities
    Keywords: municipal government, local self-government, small business, business-government interactions, partnership between municipality and business.
    JEL: H73
    Date: 2013

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