New Economics Papers
on Collective Decision-Making
Issue of 2013‒12‒20
fifteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Decision making in politics and economics: 5. 2013 election to German Bundestag and direct democracy By Tangian, Andranik S.
  2. Is Information Power? Using Mobile Phones and Free Newspapers during an Election in Mozambique By Jenny Aker, Paul Collier, Pedro C. Vicente
  3. Triple-acyclicity in majorities based on difference in support By Llamazares, Bonifacio; Pérez-Asurmendi, Patrizia
  4. Unanimity overruled: Majority voting and the burden of history By Nehring, Klaus; Pivato, Marcus; Puppe, Clemens
  5. The Condorcet set: Majority voting over interconnected propositions By Nehring, Klaus; Pivato, Marcus; Puppe, Clemens
  6. Self-protection as a limit to strategic delegation in the context of global pollution problems By Heuson, Clemens
  7. One Mandarin Benefits the Whole Clan: Hometown Favoritism in an Authoritarian Regime By Quoc-Anh Do; Kieu-Trang Nguyen; Anh N. Tran
  8. Limited Information Aggregation and Externalities - A Simple Model of Metastable Market By Gong, Zheng; Tian, Feng; Xu, Boyan
  9. The scope for institutional autonomy in a large groundwater basin: the potential for collective action in Western Australia By Skurray, James H.
  10. Stable Partitions in Many Division Problems: The Proportional and the Sequential Dictator Solutions By Gustavo Bergantiños; Jordi Massó; Inés Moreno de Barreda; Alejandro Neme
  11. (International) R&D collaboration and SMEs: The effectiveness of targeted public R&D support schemes By Hottenrott, Hanna; Lopes-Bento, Cindy
  12. Isolated Capital Cities, Accountability and Corruption: Evidence from US States By Quoc-Anh Do; Filipe R. Campante
  13. Ghost-House Busters: The Electoral Response to a Large Anti Tax Evasion Program By Casaburi, Lorenzo; Troiano, Ugo
  14. Choosing inequality: An experimental analysis of the impact of social immobility on the democratic election of distribution rules By Wolf, Stephan; Lenger, Alexander
  15. Sustainable Decision-Making: Non-Monetary Incentives for Pro-Social Behavior in the Energy Sector By Stephanie Rosenkranz; Katrin Muehlfeld; Gerwin van der Laan; Utz Weitzel; Jeroen van der Donk; Helia Ivanova; Erik-Jan van Kesteren; Milou Ottink; Heleen van der Spek

  1. By: Tangian, Andranik S.
    Abstract: The outcomes of the 2013 German Bundestag (federal parliament) election are analyzed from the viewpoint of direct democracy. For this purpose, the party positions on 36 topical issues are compared with the results of public opinion polls, and the party and coalition indices of popularity (the average percentage of the population represented) and universality (frequency in representing a majority) are constructed. It is shown that the 2013 election winner, the union of two conservative parties CDU/CSU with their 41.6% of the votes, is the least representative among the four parties eligible for parliament seats (with > 5% of the votes). The most representative among the eligible ones is the left party, DIE LINKE, which received only 8.6% of the votes. It is concluded that voters are not very consistent with their own political profiles, disregard party manifestos, and are likely driven by political traditions, even if outdated, or by personal images of politicians. Moreover, the actual practice of coalition formation further aggravates the low representativeness of the parliament. Thereby it is shown that representative democracy, as it is, guarantees no adequate representation of public opinion, even in Germany with its multiparty system and strong socialdemocratic traditions. To bridge the gap between representative and direct democracies, an alternative election procedure is proposed. For illustration, it is hypothetically applied to redistribute the Bundestag seats to increase its representativeness. --
    Keywords: representative democracy,direct democracy,elections,coalitions,theory of voting,mathematical theory of democracy,indices of popularity and universality
    JEL: D71
    Date: 2013
  2. By: Jenny Aker, Paul Collier, Pedro C. Vicente
    Abstract: Incumbent politicians in African countries have been cementing their positions in recent elections. That was the case of the Mozambican election of 2009, where the ruling party secured 75 percent of the vote, amid low participation and clear challenges of political accountability. We conducted a field experiment implemented nationwide based on three interventions providing information to voters and calling for their participation in the elections: an SMS civic education campaign centered on the elections, an SMS hotline to which citizens were able to report electoral misconduct, and the distribution of a free newspaper door-to-door focusing on voter education. We measure the effects of these treatments by looking at official electoral results, a behavioral measure of political participation, reports by electoral observers, and surveys. We find a clear positive effect of all treatments on voter turnout, close to five percentage points. Some treatments benefitted incumbents. We also have evidence that the distribution of the free newspaper led to more accountability-based participation and to a decrease in the incidence of electoral problems. All treatments increased information but caused diverse effects on perceptions about politics.
    Keywords: voter education, political economy, cell phones, newspapers, randomized experiment, field experiment, Mozambique, Africa
    JEL: D72 O55 P16
    Date: 2013–06
  3. By: Llamazares, Bonifacio; Pérez-Asurmendi, Patrizia
    Abstract: In this paper we study to what extent majorities based on difference in support leads to triple-acyclic collective decisions. These majorities, which take into account voters' intensities of preference between pairs of alternatives through reciprocal preference relations, require to the winner alternative to exceed the support for the other alternative in a difference fixed before the election. Depending on that difference, i.e., on the threshold of support, and on some requirements on the individual rationality of the voters, we provide necessary and sufficient conditions for avoiding cycles of three alternatives on the collective decision.
    Keywords: Triple-acyclicity; Majorities based on difference in support; Reciprocal preference relations; Voting systems.
    JEL: D7
    Date: 2013
  4. By: Nehring, Klaus; Pivato, Marcus; Puppe, Clemens
    Abstract: Sequential majority voting over interconnected binary propositions can lead to the overruling of unanimous consensus. We characterize, within the general framework of judgement aggregation, under what circumstances this happens for some sequence of the voting process. It turns out that the class of aggregation spaces for which this difficulty arises is very large, including the aggregation of preference orderings over at least four alternatives, the aggregation of equivalence relations over at least four objects, resource allocation problems, and most committee selection problems. We also ask whether it is possible to design respect for unanimity by choosing appropriate decision sequences. Remarkably, while this is not possible in general, it can be accomplished in interesting special cases. Adapting and generalizing a classic result by Shepsle and Weingast, we show that respect for unanimity can indeed be thus guaranteed in case of the aggregation of weak orderings, strict orderings and equivalence relations. --
    Date: 2013
  5. By: Nehring, Klaus; Pivato, Marcus; Puppe, Clemens
    Abstract: Judgement aggregation is a model of social choice in which the space of social alternatives is the set of consistent evaluations (views) on a family of logically interconnected propositions, or yes/no-issues. Yet, simply complying with the majority opinion in each issue often yields a logically inconsistent collection of judgements. Thus, we consider the Condorcet set: the set of logically consistent views which agree with the majority on a maximal set of issues. The elements of this set are exactly those that can be obtained through sequential majority voting, according to which issues are sequentially decided by simple majority unless earlier choices logically force the opposite decision. We investigate the size and structure of the Condorcet set - and hence the properties of sequential majority voting - for several important classes of judgement aggregation problems. While the Condorcet set verifies McKelvey's (1979) celebrated chaos theorem in a number of contexts, in others it is shown to be very regular and well-behaved. --
    Date: 2013
  6. By: Heuson, Clemens
    Abstract: This paper analyses the outcome of non-cooperative national efforts in combatting global pollu-tion problems when governments are elected by their citizens. It is well-known that the latter tend to vote governments that are less 'green' than the median voter in order to commit to lower national mitigation efforts, which further increases the inefficiently high amount of global emis-sions. However, the present paper shows that the option of self-protection against environmen-tal damages, which has been invariably neglected in the relevant literature to date, alleviates or even completely offsets such strategic delegation and the related adverse effects. --
    Keywords: strategic delegation,global pollution problems,self-protection,non-cooperative behaviour
    JEL: C72 D72 H41 Q58
    Date: 2013
  7. By: Quoc-Anh Do (Département d'économie); Kieu-Trang Nguyen (London School of Economics); Anh N. Tran (Indiana University Bloomington)
    Abstract: Although patronage politics in democracies has been studied extensively, it is less understood in undemocratic regimes, where a large proportion of the world's population resides. To fill this gap, our paper studies how government officials in authoritarian Vietnam direct public resources toward their hometowns. We manually collect an exhaustive panel dataset of political promotions of officials from 2000 to 2010 and estimate their impact on public infrastructure in their rural hometowns. We obtain three main results. First, promotions of officials improve a wide range of infrastructure in their hometowns, including roads, markets, schools, radio stations, clean water and irrigation. This favoritism is pervasive among officials across different ranks, even among those without budget authority, suggesting informal channels of influence. Second, in contrast to pork-barrel politics in democratic parliaments, elected legislators have no power to exercise favoritism. Third, only home communes receive favors, while larger and more politically important home districts do not. This suggests that favoritism is likely motivated by officials’ social preferences for their hometowns rather than by political considerations.
    Date: 2013–03
  8. By: Gong, Zheng; Tian, Feng; Xu, Boyan
    Abstract: We analyze a model in which agents’ decisions to enter or exit investments are influenced from their individual and external parties’ transaction histories. Actual investment outcomes are unknown to all participants until the end of decision periods, but outcomes do change depending on the number of participating players in the market and the market’s current state of condition. In this particular model, agents have access to external parties’ information from those who are within their specific social network. Our study of limited information aggregation mainly focuses on market responses to investors’ decisions of exiting the investment. With social structures complicating investment outcomes, we present a model that describes how markets can enter relatively stable statuses long enough for exiting participants to return, which brings the investment back to normal conditions. Our model also supports previous studies that limited information aggregation can cause the exogenous shock effect of global collapse.
    Keywords: Information aggregation, Social structure, Internet Externality, Simulation
    JEL: D83 D85
    Date: 2013–12–04
  9. By: Skurray, James H.
    Abstract: The Gnangara groundwater system in Western Australia occupies some 2,200 km2, supports multiple ecological systems and human uses, and is under unprecedented stress due to reduced rainfall and over-extraction. The basin is currently managed according to command and control principles, by the state's Department of Water. This paper examines some of Ostrom's "situational variables" for the analysis of institutional choice - the self-provision of institutional arrangements in common-pool resources situations - as they relate to the Gnangara case. The paper approaches the topic of collective governance not as a niche concept which may be fitted only to certain specific cases, but as a basic and natural mode of human co-operation and interaction when faced with inter-dependent interests and in the absence of militating factors. We therefore conduct the analysis from the perspective of identifying elements of the current management approach - as well as of the shared norms, expectations, and attitudes of the appropriators - which could be altered to allow collective governance to develop, at least at some scale within the overall management regime. We use data from a set of water licence documents obtained from the Department of Water, among other data sources. A number of factors are identified as inhibiting the development of collective governance at present. Current arrangements are top-down in nature, with all rules, monitoring, and enforcement supplied by the state-level management agency. Current norms and expectations among the appropriators appear to be competitive rather than co-operative, and discount rates appear to be high. In view of the size of the resource, and the large number and heterogeneity of appropriators, we conclude that the use of 'nested' organisational units - beginning at the smaller scale - will be a key component of efforts to develop the requisite social and institutional capital. Further, we conclude that there are several historical and other factors in this case whose net effect is to prejudice the unassisted development of collective governance institutions by appropriator efforts alone, and that significant external support will be required from government agencies.
    Keywords: Institutions, collective action, governance, common-pool resources, Australia, Agricultural and Food Policy, Environmental Economics and Policy, Institutional and Behavioral Economics, Land Economics/Use, Political Economy, Public Economics, Resource /Energy Economics and Policy, Q15 Q25 Q28 Q38 Q56 Q57 Q58 R14 R52 H41 H23 H11,
    Date: 2013–11–24
  10. By: Gustavo Bergantiños; Jordi Massó; Inés Moreno de Barreda; Alejandro Neme
    Abstract: We study how to partition a set of agents in a stable way when each coalition in the partition has to share a unit of a perfectly divisible good, and each agent has symmetric single-peaked preferences on the unit interval of his potential shares. A rule on the set of preference profiles consists of a partition function and a solution. Given a preference profile, a partition is selected and as many units of the good as the number of coalitions in the partition are allocated, where each unit is shared among all agents belonging to the same coalition according to the solution. A rule is stable at a preference profile if no agent strictly prefers to leave his coalition to join another coalition and all members of the receiving coalition want to admit him. We show that the proportional solution and all sequential dictator solutions admit stable partition functions. We also show that stability is a strong requirement that becomes easily incompatible with other desirable properties like efficiency, strategy-proofness, anonymity, and non-envyness.
    Keywords: division problem, symmetric single-peaked preferences, stable partition
    JEL: D71
    Date: 2013–10
  11. By: Hottenrott, Hanna; Lopes-Bento, Cindy
    Abstract: This study analyses the impact and effectiveness of targeted public support for R&D investment at the firm level. We test whether the policy design aiming at incentivizing (international) collaboration and R&D in SMEs achieves input as well as output additionality. Our results show that the targeted public subsidies trigger R&D spending, especially so in internationally collaborating SMEs. We further evaluate the different impact of privately financed and publicly-induced R&D investment on innovation performance. The results confirm that the publicly-induced R&D is productive as it translates into marketable product innovations. While both types of R&D investments trigger significant output effects, the effect of policyinduced R&D investment on sales from market novelties is highest for international collaborators as well as for SMEs. --
    Keywords: Public Innovation Policy,Subsidies,R&D,SMEs,International Collaboration,Treatment Effects
    JEL: C14 C30 H23 O31 O38
    Date: 2013
  12. By: Quoc-Anh Do (Département d'économie); Filipe R. Campante (Harvard University)
    Abstract: We show that isolated capital cities are robustly associated with greater levels of corruption across US states, in line with the view that this isolation reduces accountability, and in contrast with the alternative hypothesis that it might forestall political capture. We then provide direct evidence that the spatial distribution of population relative to the capital affects different accountability mechanisms over state politics: newspaper coverage, voter knowledge and information, and turnout. We also find evidence against the capture hypothesis: isolated capitals are associated with more money in state-level campaigns. Finally, we show that isolation is linked with worse public good provision.
    Date: 2013–03
  13. By: Casaburi, Lorenzo; Troiano, Ugo
    Abstract: The incentives of political agents to enforce tax collection are key determinants of the levels of compliance. We study the electoral response to the Ghost Buildings program, a nationwide anti-tax evasion policy in Italy that used innovative monitoring technologies to target buildings hidden from tax authorities. Two million buildings were registered as a result of the program. Our difference-in-differences identification strategy exploits both variation across towns in the ex-ante program scope to increase enforcement as well as administrative data on actual building registrations. Local incumbents experience an increase in their reelection likelihood as a consequence of the policy. In addition, these political returns are higher in areas with lower tax evasion tolerance and with higher speed of public good provision, implying complementarity among enforcement policies, the underlying tax culture, and government efficiency.
    Keywords: tax evasion, public economics, political economics
    JEL: D72 E62 H26
    Date: 2013–12–12
  14. By: Wolf, Stephan; Lenger, Alexander
    Abstract: Mainstream economists usually identify a fundamental conflict between efficiency and justice in re-source allocation: markets are generally considered an efficient allocation tool, but create unequal results. Corresponding governmental redistribution shall equalize some of these market results, but leads to inefficiency due to disincentives both for net payers and net receivers. Consequently, this pa-per analyses the impact of social inequality on distributive choices in an experimental democracy. In our experiment, we find that stark inequality is generally accepted provided a strong egalitarian in-come floor is ensured. Even though our samples showed a very strong egalitarian inclination, complete egalitarianism was not a stable outcome. Some degree of differentiation always emerged on an initial egalitarian base. --
    Date: 2013
  15. By: Stephanie Rosenkranz; Katrin Muehlfeld; Gerwin van der Laan; Utz Weitzel; Jeroen van der Donk; Helia Ivanova; Erik-Jan van Kesteren; Milou Ottink; Heleen van der Spek
    Abstract: Taking into account insights into the reality of human decision-making, is an important challenge for today's policymakers. Are there `cheaper', more efficient and possibly as well more effective, non-financial ways of influencing the behaviour of private and corporate citizens, nudging them towards socially desired choices, for example, in the domain of energy consumption? Can such mechanisms complement or substitute for monetary incentives in fostering sustainable decision-making in policy relevant areas such as energy consumption? If so, what mechanisms might be feasible to implement in actual policymaking? Against this background, the Dutch Ministry of Economic Affairs (Ministerie van Economische Zaken) wants to know which "nudges" are the most suitable for application in the field of energy conservation. To this end, in this report we (1) take stock what is known about the effects of non-monetary incentives in general, and legacy reminders in particular, in increasing individuals' regard for collective interests and for intergenerational beneficence, in particular in the domain of energy consumption (literature review); (2) investigate in a laboratory setting the effects of selected non-monetary incentives on a selection of relevant decision tasks (laboratory experiments); and (3) apply the insights from the literature review and laboratory experiments to specific instruments of policy-making in the Netherlands.
    Keywords: Behavioral Economics, Choice Architecture, Nudge, Energy Efficiency
    JEL: D01 D03 D04
    Date: 2013–10

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