New Economics Papers
on Collective Decision-Making
Issue of 2014‒05‒04
fourteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Swing States, The Winner-Take-All Electoral College, and Fiscal Federalism By Duquette, Christopher; Mixon, Franklin; Cebula, Richard
  2. Coalition-Preclusion Contracts and Moderate Policies By Hans Gersbach; Oriol Tejada; Maik T. Schneider
  3. The Power of Religious Organizations in Human Decision Processes: Analyzing Voting Behavior By Benno Torgler; David Stadelmann; Marco Portmann
  4. Obedience to Rules with Mild Sanctions: The Roles of Peer Punishment and Voting By Chen, Josie I
  5. Ideological Dissent in Downsian Politics By Siddhartha Bandyopadhyay; Manaswini Bhalla; Kalysan Chatterjee; Jaideep Roy
  6. Full transparency of politicians' actions does not increase the quality of political representation By David Stadelmann; Marco Portmann; Reiner Eichenberger
  7. Voters’ responsiveness to public employment policies By Marta Curto-Grau
  8. God Does Not Play Dice, But People Should: Random Selection in Politics, Science and Society By Bruno S. Frey; Lasse Steiner
  9. The Evolving Priorities of the Israeli Left: From Social Justice to Security and Back By Konstantin Yanovskiy; Ilia Zatcovetsky; Sergey Zhavoronkov
  10. Deception in Networks: A Laboratory Study By Rong Rong; Daniel Houser
  11. An Analysis of Withdrawn Shareholder Proposals By Foley, Maggie; Cebula, Richard; Jun, Chulhee
  12. A threshold for biological altruism in public goods games played in groups including kin By Hannes Rusch
  14. With God We Trust: Religion, Trust and Cooperation in Large-Scale Societies By Julien Gagnon

  1. By: Duquette, Christopher; Mixon, Franklin; Cebula, Richard
    Abstract: There is a debate regarding the impact of swing or independent voters in American politics. While some argue that swing voters either do not swing or have a marginal impact on campaigns, the decline in voter partisan identification and the rise of independents means that they have a potential impact on elections, making them a desirable commodity to candidates. Additionally, presidential elections represent a unique case for swing voters. A robust literature notes that during the presidential primary and caucus process, voters in states such as Iowa or New Hampshire effectively have a greater voice in the election than those in other states. This is due to the number of voters in these states, and the strategic importance of having their primaries and caucuses positioned at the beginning of the presidential selection process. Additionally, the Electoral College is criticized as giving disproportionate influence to some voters or states, or as otherwise distorting the results in presidential elections because of its winner-take-all method of allocating votes in 48 or the 50 states. But these assertions notwithstanding, can the impact or distortion that swing-voters have in some states compared to others, in terms of their relative influence on presidential elections, be quantified? Relatedly, does the Electoral College distort the impact of swing voters? This study presents a new method to assess the impact of swing voters within the winner-take-all method that states use to allocate electoral votes. By looking at several recent U.S. presidential elections, we quantify how the winner-take-all method of allocating electoral votes produces disparities in the voting power of citizens across states.
    Keywords: Electoral College; voting power
    JEL: D12 D72 D78 K00
    Date: 2013–02–09
  2. By: Hans Gersbach (ETH Zurich, Switzerland); Oriol Tejada (ETH Zurich, Switzerland); Maik T. Schneider (ETH Zurich, Switzerland)
    Abstract: We examine the effects of a novel political institution, which we call Coalition- Preclusion Contracts, on elections, policies, and welfare. Coalition-Preclusion Contracts enable political parties to credibly commit before the elections not to form a coalition after the elections with one or several other parties specified in the contract. We consider a political game in which three parties compete to form the government and study when contracts of the above type will be written. We find that in most circumstances Coalition-Preclusion Contracts with a single-party exclusion rule defend the interests of the majority by moderating the policies implemented. Moreover, they yield welfare gains for a large set of parameter values. We discuss the robustness of the results in more general settings and study how party-exclusion rules have to be adjusted when more than three parties compete in an election.
    Keywords: coalition formation; political contracts; elections; government formation
    JEL: D72 D82 H55
    Date: 2014–04
  3. By: Benno Torgler; David Stadelmann; Marco Portmann
    Abstract: In Switzerland, two key church institutions - the Conference of Swiss Bishops (CSB) and the Federation of Protestant Churches (FPC) - make public recommendations on how to vote for certain referenda. We leverage this unique situation to directly measure religious organizations' power to shape human decision making. We employ an objective measure of voters' commitment to their religious organization to determine whether they are more likely to vote in line with this organization's recommendations. We find that voting recommendations do indeed matter, implying that even in a secularized world, religion plays a crucial role in voting decisions.
    Keywords: Power; religion; voting; referenda; trust; rules of thumb
    JEL: D03 D72 D83 H70
    Date: 2013–11
  4. By: Chen, Josie I
    Abstract: Governments sometimes promote rules backed by sanctions too weak to make obedience privately optimal. Factors that may help make such rules effective include the presence of informal sanctions by peers, and implementation through voting. I study the impact of non-deterrent formal sanctions on voluntary contributions to a public good in a laboratory experiment. The effect is studied both in the presence and absence of informal sanctions, under fully exogenous implementation and after both implemented and randomly overridden voting. I find that informal sanctions strengthen the effect of formal ones in most conditions. However, voted implementation has no clear effect on non-deterrent formal sanction in my data, which suggests a reason for caution when studying exogenous implementation by a random vote override procedure.
    Keywords: experiment, voluntary contribution, public goods, formal sanctions, informal sanctions, voting, democracy effect
    JEL: C72 C91 C92 D72 H41
    Date: 2014–04–15
  5. By: Siddhartha Bandyopadhyay; Manaswini Bhalla; Kalysan Chatterjee; Jaideep Roy
    Abstract: We analyze the Hotelling-Downs model of a winner-take-all elections with sequential entry where n > 2 'office-seeking' candidates with privately known qualities arrive in an order to announce platform commitments and voters receive partially informative exogenous signals about quality of each contestant. We characterize two-party equilibria when the order of entry is exogenously given. In these equilibria, entry can occur in any 'round' with positive probability: high quality candidates signal their type through showing ideological dissent with the voters while low quality ones randomize between (mis)-signaling quality through dissent and staying out. An interesting implication of this is that while the presence of a partially informative press can keep low quality candidates out of competition up to a certain degree, electoral competition improves voter's information about candidate types beyond what the press can reveal. However this endogenous mechanism of strategic information transmission leads to a political polarization. We then endogenize the order of entry to show that in general some high quality candidates enter early and others enter late while all low quality candidates either stay out or enter late. Moreover, while extremism continues to signal quality, there must be a gradual moderation in ideology although information revelation is non-monotonic in time with full revelation for early and late entrants and only partial revelation for intermediate entrants.
    Keywords: Sequential entry, Unobserved quality, Stratetic dissent, Polarization, Endogenous Order
    JEL: C72 D72 D82
    Date: 2014–04
  6. By: David Stadelmann; Marco Portmann; Reiner Eichenberger
    Abstract: We identify the impact of transparency in political decision -making on the quality of political representation with a difference- in-difference strategy. The quality of political representation is measured by observed divergence of parliamentary decisions from revealed voter preferences on the very same issues. Full transparency of votes of individual politicians does not decrease divergence from voter preferences.
    Keywords: Transparency; quality of political decisions; representation; parliament; individual votes; referenda
    JEL: D70 D80 H11
    Date: 2013–09
  7. By: Marta Curto-Grau (University of Heidelberg)
    Abstract: This paper examines whether the distribution of public employment affects the electoral support for the incumbent government that allocates jobs. To do this we focus on the Spanish Plan for Rural Employment (PER), a program of temporary public employment introduced by the central government in two lagging regions. We evaluate voters’ responsiveness to this policy using municipal-level electoral data and employing an estimator that combines propensity score matching with a difference-indifferences strategy (Heckman et al., Econometrica 65 (1998) 2). We show that the average treatment effect on the treated is a 2 percentage-point increase of the vote share for the ruling party at general elections and we also find evidence of an increase in electoral participation.
    Keywords: Public employment, electoral rewards, difference-in-differences, propensity score matching
    JEL: H53 P16
    Date: 2014
  8. By: Bruno S. Frey; Lasse Steiner
    Abstract: This paper discusses and proposes random selection as a component in decision-making in society. Random procedures have played a significant role in history, especially in classical Greece and the medieval city-states of Italy. We examine the important positive features of decisions by random mechanisms. Random processes allow representativeness with respect to individuals and groups. They significantly reduce opportunities to influence political decisions by means of bribery and corruption and decrease the large expenses associated with today’s democratic election campaigns. Random mechanisms can be applied fruitfully to a wide range of fields, including politics, the judiciary, the economy, science and the cultural sector. However, it is important that random selection processes are embedded in appropriately designed institutions.
    Keywords: Random selection; lot; democracy; representativeness; corruption
    Date: 2014–03
  9. By: Konstantin Yanovskiy (Gaidar Institute for Economic Policy); Ilia Zatcovetsky (Samuel Neaman Institute for Advanced Studies in Science and Technology); Sergey Zhavoronkov (Gaidar Institute for Economic Policy)
    Abstract: The present article traces the dynamics of the priorities chosen by leading leftist parties in Israel vis-a-vis the functions of the state. During the period of the British Mandate they, like all leftist parties, maintained anti-militaristic views. Leaders of the Left more than once accused their rightist opponents of militarism and even fascism. Beginning in 1948, Israel’s Labor Party members become vividly pronounced “pro-defenders.” But during 1977-1982, their views begin to drift toward the original position typical of all leftists: the precedence of social spending and goals rather than defending the country and maintaining the security of its citizens. A study of the motives for change in the leftist stance supports the hypothesis that the period of leftist “patriotic-defensive” priorities depended on perceiving the state as a party-“corporate” asset of the Left; the state needed to be defended in all ways, including defense from enemies from the without. The loss of leftist leadership in the elections was the undoing of this perception of the state, returning the Israeli Left to the classic leftist stance of “Guns or Butter” in favor of social spending. As historical data bear out, mixed public goods and unlimited opportunity for discretional rule are a priori more attractive for the Left and the majority of bureaucrats than is historically limited spending on the production of “pure public goods.”
    Keywords: encompassing interest, pure public goods quality, defense, Labor Party priorities
    JEL: D72 D74 H41 H56
    Date: 2014
  10. By: Rong Rong (Department of Economics, Weber State University); Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University)
    Abstract: Communication between departments within a firm may include deception. Theory suggests that telling lies in these environments may be strategically optimal if there exists a small difference in monetary incentives (Crawford and Sobel, 1982; Galeotti et al, 2012). We design a laboratory experiment to investigate whether agents with different monetary incentives in a network environment behave according to theoretical predictions. We found that players’ choices are consistent with the theory. That is, most communication within an incentive group is truthful and deception often occurs between subjects from different groups. These results have important implications for intra-organizational conflict management, demonstrating that in order to minimize deceptive communication between departments the firm may need to reduce incentive differences between these groups. Length: 19
    Keywords: social networks, deception, strategic information transmission, experiments
    JEL: D85 D02 C92
    Date: 2014–04
  11. By: Foley, Maggie; Cebula, Richard; Jun, Chulhee
    Abstract: This study visits the role of shareholder proposals in the governance of public corporations by studying withdrawn shareholder proposals. Among all shareholders, unions are the most likely to withdraw proposals. Furthermore, firms with a record of poor performance, lower insider ownership and more independent boards are likely to see proposals withdrawn. Since unions often possess a high level of bargaining power, we put emphasis on the behavior of unions. We find that unions resubmit proposals that have gained high shareholder support in the prior year. About fifty percent of those resubmitted proposals are withdrawn prior to the annual shareholder meetings. In addition, almost all of those proposals do not reappear in the following year, implying that the issues underlying those proposals have been settled. This phenomenon indicates that unions submit shareholder proposals strategically. Furthermore, it is more likely for unions to adopt this strategy when the prior voting support is higher, when the insider ownership is lower, and when the ownership is less dispersed. The identified strategy played by unions suggests that unions use shareholder proposals for union workers at the expense of shareholder value.
    Keywords: union strategy; shareholder proposals; shareholder value
    JEL: D72 D78 G14 G32
    Date: 2013–10–13
  12. By: Hannes Rusch (University of Giessen)
    Abstract: Phenomena like meat sharing in hunter-gatherers, altruistic self-sacrifice in intergroup conflicts, and contribution to the production of public goods in laboratory experiments have led to the development of numerous theories trying to explain human prosocial preferences and behavior. Many of these focus on direct and indirect reciprocity, assortment, or (cultural) group selection. Here, I investigate analytically how genetic relatedness changes the incentive structure of that paradigmatic game which is conventionally used to model and experimentally investigate collective action problems: the public goods game. Using data on contemporary hunter-gatherer societies I then estimate a threshold value determining when biological altruism turns into maximizing inclusive fitness in this game. I find that, on average, contributing no less than about 40% of individual fitness to public goods production still is an optimal strategy from an inclusive fitness perspective under plausible socio-ecological conditions.
    JEL: B15 C72 D64 H41
    Date: 2014
  13. By: Claude Alavoine; Claudine Batazzi
    Abstract: The influence of culture on international business negotiations is recognized by most of the specialists and researchers in the field. A more important question is to what extent and what are the consequences in agreement making. Personal values, beliefs, attitudes, behaviours and decisions too are largely influenced and determined by our own culture, but the level of its influence on the negotiation process is difficult to estimate. Negotiation is a specific form of communication in which the parties enter into deliberately, each with supposedly clear aims and goals as well as a mutual dependency on a decision that will be taken at the end of the confrontation. Communication will have a strong influence over the development of conflict, in particular the nature of the information used and the expectations in terms of feedback. Indeed, the information transmitted during the process includes unconscious signals and the underlying affects carried on will considerably influence it, particularly regarding the level and nature of the exchange. When confronted with difficulties, negotiators have a tendency to use pressure-tactics such as threats which will increase the level of conflict and reduce the chances of reaching an agreement.
    Keywords: negotiation, culture, information, conflict, threats, competition, cooperation.
    JEL: F23
    Date: 2014–04–29
  14. By: Julien Gagnon
    Abstract: The first aim of this paper is to revisit the puzzle of cooperation in large-scale societies.It proposes a game theoretic model showing how endogenous emotion-based punishment can sustain ull cooperation when interactions are not repeated, provided that players' endogenous trust is high enough. The model the signalling theory of religion. Finally, the model enables clear and tractable predictions about the levels of religious affiliation and participation within a society. Evidence of the model's implications is discussed.
    Keywords: Cooperation; Emotions; Psychological Game Theory; Punishment; Religion; Trust.
    JEL: D02 D03 D71 D81 Z12
    Date: 2014–04–29

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