New Economics Papers
on Collective Decision-Making
Issue of 2014‒02‒02
twenty papers chosen by
Stan C. Weeber, McNeese State University

  1. Preferential Voting, Accountability and Promotions into Political Power: Evidence from Sweden By Folke, Olle; Persson, Torsten; Rickne, Johanna
  2. Preference Intensities in Repeated Collective Decision-Making By Drexl, Moritz; Kleiner, Andreas
  3. Distance rationalizability of scoring rules By Can B.
  4. Pivotality and Responsibility Attribution in Sequential Voting By Bjšrn Bartling; Urs Fischbacher; Simeon Schudy
  5. Over-Caution of Large Committees of Experts By Rune Midjord; Tomas Rodriguez Barraquer; Justin Valasek
  6. Radio and the rise of Nazi in pre-war Germany By Adena, Maja; Enikolopov, Ruben; Petrova, Maria; Santarosa, Veronica; Zhuravskaya, Ekaterina
  7. Electoral cycles in savings bank lending By Stowasser, Till; Englmaier, Florian
  8. The Condorcet paradox revisited By Herings P.J.J.; Houba H
  9. How do Female Preferences Influence Political Decisions by Female and Male Representatives? By Stadelmann, David; Portmann, Marco; Eichenberger, Reiner
  10. When is Lift-off? Evaluating Forward Guidance from the Shadow By Matthias Neuenkirch; Pierre L. Siklos
  11. Hanging Together or Being Hung Separately: The Strategic Power of Coalitions where Bargaining Occurs with Incomplete Information By Konrad, Kai A.; Cusack, Thomas R.
  12. Lobbying and Elections By Klingelhöfer, Jan
  13. Opinion Dynamics under Conformity By Büchel, Berno; Hellmann, Tim; Klößner, Stefan
  14. Collective Decision Making with Transferable Utilities By Kleiner, Andreas; Drexl, Moritz
  15. Do Electoral Rules Make Legislators Differently Responsive to Fiscal Transfers? Evidence from German Municipalities By Köthenbürger, Marko; Egger, Peter; Smart, Michael
  16. Single-basined choice By Bossert W.; Peters H.J.M.
  17. The Political Economics of Higher Education Finance for Mobile Individuals By Übelmesser, Silke; Borck, Rainald; Wimbersky, Martin
  18. Voting to Tell Others By Stefano DellaVigna; John A. List; Ulrike Malmendier; Gautam Rao
  19. Does female suffrage increase public support for government spending? Evidence from Swiss ballots By Jaronicki, Katharina
  20. Brothers in alms ? Coordination between nonprofits on markets for donations By Gani Aldashev; Marco A. Marini; Thierry Verdier

  1. By: Folke, Olle (Columbia University); Persson, Torsten (Institute for International Economic Studies); Rickne, Johanna (Research Institute of Industrial Economics (IFN))
    Abstract: Preferential voting has been introduced in a number of proportional election systems over the last 20 years, mainly as a means to increase the accountability of individual politicians. But most of these reforms have been criticized as blatant failures. In this paper, we discover a genuinely new fact, which calls into question this negative evaluation. We show that preferential voting in a general election can operate as a stand-in internal primary election for top party positions. To do this, we rely on a unique data set from four waves of Swedish local elections, which includes every nominated politician in each of 290 municipal assemblies. We use a natural-experiment (regression-discontinuity) approach to estimate the causal effect of winning the most preferential votes on becoming the local party leader, and find that narrow "list winners" are over 50 percent more likely to become party leaders than their runner-ups. Comparing across politicians, the effect of list winning is the strongest for competent politicians, who are also more likely to draw preferential votes than mediocre politicians. Comparing across municipalities, the response to narrow list winning is the strongest within unthreatened governing majorities, where voters also use the preferential vote the most frequently.
    Keywords: Preferential Voting; Accountability; Regression Discontinuity Design
    JEL: H70
    Date: 2014–01–17
  2. By: Drexl, Moritz; Kleiner, Andreas
    Abstract: We study decision rules for committees that repeatedly take a binary decision. Committee members are privately informed about their payoffs and monetary transfers are not feasible. In static environments, the only strategy-proof mechanisms are voting rules which are criticized for being inefficient as they do not condition on preference intensities. The dynamic structure of repeated decision-making allows for richer decision rules that overcome this inefficiency by making use of information on preference intensities. Nonetheless, we show that often simple voting is optimal for two-person committees. This holds for many prior type distributions and irrespective of the agents' patience. --
    JEL: D72 D82 C61
    Date: 2013
  3. By: Can B. (GSBE)
    Abstract: Collective decision making problems can be seen as finding an outcome that is closest to a concept of consensus. 1 introduced Closeness to Unanimity Procedure as a first example to this approach and showed that the Borda rule is the closest to unanimity under swap distance a.k.a the 2 distance. 3 shows that the Dodgson rule is the closest to Condorcet under swap distance. 4, 5 generalized this concept as distance-rationalizability, where being close is measured via various distance functions and with many concepts of consensus, e.g., unanimity, Condorcet etc. In this paper, we show that all non-degenerate scoring rules can be distance-rationalized as Closeness to Unanimity procedures under a class of weighted distance functions introduced in 6. Therefore, the results herein generalizes 1 and builds a connection between scoring rules and a generalization of the Kemeny distance, i.e. weighted distances.
    Keywords: Computational Techniques; Simulation Modeling; Social Choice; Clubs; Committees; Associations; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior; Conflict; Conflict Resolution; Alliances;
    JEL: C63 D71 D72 D74
    Date: 2013
  4. By: Bjšrn Bartling; Urs Fischbacher; Simeon Schudy
    Abstract: Are people blamed for being pivotal if they implement an unpopular outcome in a sequential voting process? We conduct an experimental voting game and analyze how pivotality affects responsibility attribution by parties who can be negatively affected by the voting outcome. We measure responsibility attribution by assigned punishment points and find that pivotal decision makers are blamed significantly more than non-pivotal decision makers. Moreover, we find that some voters avoid being pivotal by voting strategically to delegate the pivotal vote to subsequent decision makers.
    Keywords: Pivotality, voting, responsibility attribution, blame, delegation, experiment
    Date: 2014
  5. By: Rune Midjord; Tomas Rodriguez Barraquer; Justin Valasek
    Abstract: In this paper, we demonstrate that payoffs linked to a committee member's individual vote may explain over-cautious behavior in committees. A committee of experts must decide whether to approve or reject a proposed innovation on behalf of society. In addition to a payoff linked to the adequateness of the committee's decision, each expert receives a disesteem payoff if he/she voted in favor of an ill-fated innovation. An example is FDA committees, where committee members can be exposed to a disesteem (negative) payoff if they vote to pass a drug that proves to be fatal for some users. We show that no matter how small the disesteem payoffs are, information aggregation fails in large committees: under any majority rule, the committee rejects the innovation almost surely. We then show that this inefficiency can be mitigated by pre-vote information pooling, but only if the decision is take under unanimity: in the presence of disesteem payoffs, committee members will only vote efficiently if they are all responsible for the final decision.
    Keywords: Committees; Information aggregation; Disesteem payoffs
    JEL: D71 D72
    Date: 2013–12
  6. By: Adena, Maja; Enikolopov, Ruben; Petrova, Maria; Santarosa, Veronica; Zhuravskaya, Ekaterina
    Abstract: How far can media undermine democratic institutions and how persuasive can it be in assuring public support for dictator policies? We study this question in the context of Germany before World War II, between 1929 and 1939. First, we estimate the impact of radio signal on voting for the Nazi party before and after Nazi got control over the content of the broadcast. Prior to Hitler s appointment as chancellor, the radio, broadcasting cultural programs and some political news with an anti-Nazi slant, had a substantial negative effect on voting for the Nazi party. This negative effect was fully undone in just one month before the last competitive pre-war election following Hitler s appointment in 1933, which resulted in the change of radio content to heavy pro-Nazi propaganda. In the last few months that Germany remained democracy, the persuasion power of pro-Nazi propaganda was smaller than that of the anti-Nazi radio. Second, we examine the impact of the radio after Nazi fully consolidated power. Radio propaganda helped Nazi to enroll new party members and encouraged denunciations of Jews and other open expressions of anti-Semitism. Radio was most effective as propaganda tool when combined with other tools, such as Hitler s speeches, and when the message was more aligned with listeners priors as measured by historical variation in anti-Semitism. --
    JEL: D72 L82 P26
    Date: 2013
  7. By: Stowasser, Till; Englmaier, Florian
    Abstract: We provide causal evidence that German savings banks where local politicians are by law involved in their management systematically adjust lending policies in response to local electoral cycles. The different timing of county elections across states and the existence of a control group of cooperative banks that are very similar to savings banks but lack their political connectedness allow for clean identification of causal effects of county elections on savings banks lending. These effects are economically meaningful and robust to various specifications. Moreover, politically induced lending increases in incumbent party entrenchment and in the contestedness of upcoming elections. --
    JEL: D72 D73 G21
    Date: 2013
  8. By: Herings P.J.J.; Houba H (GSBE)
    Abstract: We analyze the Condorcet paradox within a strategic bargaining model with majority voting, exogenous recognition probabilities, and no discounting. Stationary subgame perfect equilibria (SSPE) exist whenever the geometric mean of the players' risk coefficients, ratios of utility differences between alternatives, is at most one. SSPEs ensure agreement within finite expected time. For generic parameter values, SSPEs are unique and exclude Condorcet cycles. In an SSPE, at least two players propose their best alternative and at most one player proposes his middle alternative with positive probability. Players never reject best alternatives, may reject middle alternatives with positive probability, and reject worst alternatives. Recognition probabilities represent bargaining power and drive expected delay. Irrespective of utilities, no delay occurs for suitable distributions of bargaining power, whereas expected delay goes to infinity in the limit where one player holds all bargaining power. Contrary to the case with unanimous approval, a player benefits from an increase in his risk aversion.
    Keywords: Stochastic and Dynamic Games; Evolutionary Games; Repeated Games; Bargaining Theory; Matching Theory; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior;
    JEL: C73 C78 D72
    Date: 2013
  9. By: Stadelmann, David; Portmann, Marco; Eichenberger, Reiner
    Abstract: Exploiting a natural voting experiment we identify female preferences for real policy issues in the electorate. We then analyze whether female or male politicians in parliament more closely correspond to female preferences. Holding constant revealed constituent preferences, there is generally no difference between male and female politicians with respect to representation of female preferences. However, when focusing only on social and redistribution issues, we find that female politicians correspond in their decisions more closely to female preferences. --
    JEL: J16 D72 H50
    Date: 2013
  10. By: Matthias Neuenkirch; Pierre L. Siklos
    Abstract: Monetary policy decisions are typically taken after a committee has deliberated and voted on a proposal. However, there are well-known risks associated with committee-based decisions. In this paper we examine the record of the shadow Monetary Policy Council in Canada. Given the structure of the committee, how decision-making takes place, as well as the voting arrangements, the MPC does not face the same information cascades and group polarization risks faced by actual decision-makers in central bank monetary policy councils. We find a considerable diversity of opinion about the recommended future path of interest rates inside the MPC. Beginning with the explicit forward guidance provided by the Bank of Canada market determined forward rates diverge considerably from the recommendations implied by the MPC. There is little evidence that the Bank and the MPC coordinate their future views about the interest rate path. However, it is difficult to explain the basis on which median voter inside the MPC, as well as doves and hawks on the committee, change their views about future changes in policy rates. This implies that there remain challenges in understanding the evolution of future interest rate paths over time.
    Keywords: Bank of Canada, central bank communication, committee behaviour, monetary policy committees, shadow councils, Taylor rules
    JEL: E43 E52 E58 E61 E69
    Date: 2014
  11. By: Konrad, Kai A.; Cusack, Thomas R.
    Abstract: What is the strategic role of membership in an intergovernmental group with unanimity requirements if the group negotiates with an external player in a setting with incomplete information? Being in such a group has a strategic effect compared to negotiating as a standalone player and reduces the demands of the outside player: being in a group lends additional bargaining power. Negotiating as a group may also cause more inefficiencies due to bargaining failure, and this may harm also the intergovernmental group. We uncover the role of preference alignment and preference independence between members of the coalition group for equilibrium payoffs and welfare effects. In this analysis we also distinguishing between coalition groups with and without side payments. Overall, coalition groups tend to perform well for the members of the coalition group in comparison to fully decentralized negotiations, particularly if the objectives of the members of the coalition group are not always perfectly aligned. --
    JEL: F51 F53 F59
    Date: 2013
  12. By: Klingelhöfer, Jan
    Abstract: In using their citizen candidate framework, Besley and Coate (2001) fi nd that if citizen candidates with sufficiently extreme preferences are available, lobbying has no in fluence on equilibrium policy. I show that this result does not hold in a model with ideological parties instead of citizen candidates. Even if forward-looking voters are aware that lobbying will take place, their choice between policies is di erent when lobbies do and do not exist. In many cases, the majority of voters is better off with lobbying. --
    JEL: D72 D70 C72
    Date: 2013
  13. By: Büchel, Berno; Hellmann, Tim; Klößner, Stefan
    Abstract: We present a model of opinion formation where individuals repeatedly engage in discussion and update their opinion in a social network similarly to the DeGroot model. Abstracting from the standard assumption that individuals always report their opinion truthfully, agents in our model may state an opinion that differs from their true opinion. The incentive to do so is induced by agents' preferences for conformity. We model opinion formation as a dynamic process and identify conditions for convergence to a consensus. Studying the consensus in detail, we show that an agent's social influence on the consensus opinion is increasing in network centrality and decreasing in the level of conformity. Thus, lower conformity fosters opinion leadership. Moreover, assuming that the initial opinion is a noisy signal about some true state of the world, we study how conformity affects the efficiency of information aggregation or the ``wisdom'' of the society. We show that the society becomes wiser, in the sense of a smaller mean squared error of their estimate, if players who are well informed (relative to their network importance) are less conform, while uninformed players (relative to their network importance) conform more with their neighbors. --
    JEL: D83 D85 Z13
    Date: 2013
  14. By: Kleiner, Andreas; Drexl, Moritz
    Abstract: Which decision rule should we use to make a binary collective choice? While voting procedures are applied ubiquitously, they are criticized for being inefficient. Using monetary transfers, efficient choices can be made at the cost of a budget imbalance. Is it optimal to do so? And why are monetary transfers used only rarely in public decision making? We solve for the welfare maximizing social choice function taking monetary transfers explicitly into account. Under a mild regularity assumption on the distribution of types, we show that the optimal anonymous social choice function is implementable through qualified majority voting. Our result shows that using a VCG mechanism is not superior to voting in general and justifies the use of voting mechanisms. It thereby could explain why many decision rules employed in practice do not rely on monetary transfers. --
    JEL: D70 D82 H41
    Date: 2013
  15. By: Köthenbürger, Marko; Egger, Peter; Smart, Michael
    Abstract: The paper empirically analyzes whether electoral rules make legislators differently responsive to changes in fiscal incentives. Key to the analysis are two unique reforms in the German state of Lower Saxony which changed (i) the municipal charter by replacing the council-manager system (featuring appointed mayors) by a mayor-council system (with directly-elected mayors) and (ii) the fiscal incentives inherent to the equalization system. We find that municipalities with appointed mayors react less strongly to changes in fiscal incentives. The change in municipal tax rates is three times smaller compared with a system of direct mayoral elections. We point to the different electoral incentives of mayors in the two systems to explain the result. --
    JEL: D78 H70 D72
    Date: 2013
  16. By: Bossert W.; Peters H.J.M. (GSBE)
    Abstract: Single-basined preferences generalize single-dipped preferences by allowing for multiple worst elements. These preferences have played an important role in areas such as voting, strategy-proofness and matching problems. We examine the notion of single-basinedness in a choice-theoretic setting. In conjunction with independence of irrelevant alternatives, single-basined choice implies a structure that conforms to the motivation underlying our definition. We also establish the consequences of requiring single-basined choice correspondences to be upper semicontinuous, and of the revealed preference relation to be Suzumura consistent.
    Keywords: Consumer Economics: Theory; Social Choice; Clubs; Committees; Associations;
    JEL: D11 D71
    Date: 2013
  17. By: Übelmesser, Silke; Borck, Rainald; Wimbersky, Martin
    Abstract: We study voting over higher education finance in an economy with two regions and two separated labor markets. Households dffer in their financial endowment and their children's ability. Non-students are immobile. Students decide where to study; they return home after graduation with exogenous probability. The voters of the two regions decide on whether to subsidize higher education costs or whether to rely on tuition fees only. We find that in equilibrium, in both regions a majority votes for subsidies when the return probability is suffi ciently small. When that probability is large, both regions opt for full tuition finance. Interestingly, the higher the return probability, the smaller are the equilibrium subsidy rates, but the larger are the numbers of exchange students. --
    JEL: H52 H42 D72
    Date: 2013
  18. By: Stefano DellaVigna; John A. List; Ulrike Malmendier; Gautam Rao
    Abstract: Why do people vote? We argue that social image plays a significant role in explaining turnout: people vote because others will ask. The expectation of being asked motivates turnout if individuals derive pride from telling others that they voted, or feel shame from admitting that they did not vote, provided that lying is costly. We design a field experiment to estimate the effect of social image concerns on voting. In a door-to-door survey about election turnout, we experimentally vary (i) the informational content and use of a flyer pre-announcing the survey, (ii) the duration and payment for the survey, and (iii) the incentives to lie about past voting. Our estimates suggest significant social image concerns. For a plausible range of lying costs, we estimate the monetary value of voting `because others will ask' to be in the range of $5-$15 for the 2010 Congressional election. In a complementary get-out-the-vote experiment, we inform potential voters before the election that we will ask them later whether they voted. We find suggestive evidence that the treatment increases turnout.
    JEL: C93 P48
    Date: 2014–01
  19. By: Jaronicki, Katharina
    Abstract: Does the enfranchisement of women lead to an increase in public support for government spending? By utilizing a natural experiment from Switzerland, I test this hypothesis empirically. I analyze the voting outcomes of two very similar referendum ballots concerning the federal government's competency to levy income, capital and turnover taxes. The first ballot has taken place shortly before the extension of suffrage to women in February 1971, and the other thereafter. To shed light on the existence of gender gaps in approval for government spending, I first estimate the additional turnout due to the introduction of female suffrage, and then estimate the additional turnout's impact on the percentage of yes votes. Surprisingly, I find that approval for government spending is higher among the male population. To overcome concerns that the results might only hold conditionally on voter participation decisions, I provide additional evidence from a probit analysis of a post-ballot survey. These are conducted for voters and non-voters and confirm that the results extend to the non-voting population. My results complement the findings of previous literature which suggest that in the analysis of gender preference gaps for government expenditure spending categories like e.g. welfare and non-welfare items should be distinguished. --
    JEL: J16 H10 D72
    Date: 2013
  20. By: Gani Aldashev (Department of Economics and CRED, University of Namur); Marco A. Marini (Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza"); Thierry Verdier (Paris School of Economics and CEPR)
    Abstract: Mission-driven nonprofit organizations compete for donations through fundraising activities. Such competition can lead to inefficient outcomes, if nonprofits impose externalities on each others' output. This paper studies the sustainability of fundraising coordination agreements, using a game-theoretic model of coalition formation. Three key characteristics determine the stability of cooperation: (i) the alliance formation rule, (ii) the extent to which fundraising efforts are strategic complements/substitutes, and (iii) whether deviation from the agreements is by an individual or by a group of nonprofits. We analyze how the interaction between these three features induces (or not) the stability of Pareto-optimal full coordination in fundraising.
    Keywords: nonprofits, charitable giving, coordination, endogenous coalition formation,non-distribution constraint.
    Date: 2014

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