New Economics Papers
on Collective Decision-Making
Issue of 2014‒07‒05
seventeen papers chosen by
Stan C. Weeber, McNeese State University

  1. Guns and Votes By Laurent Bouton; Paola Conconi; Francisco Pino; Maurizio Zanardi
  2. The Runner-Up Effect By Santosh Anagol; Thomas Fujiwara
  3. Contribution to reduce risks related to strategic decisions in new uncertain competitive environments: The case of Algerian State-Owned Firms By Abdelkader Baaziz; Luc Quoniam
  4. Demographische Alterung und politische Machtverhältnisse By Sven Stadtmüller
  5. Project Evaluation with Democratic Decision-making: What Does Cost-benefit Analysis Really Measure? By Nyborg, Karine
  6. Raising the Price of Talk: An Experimental Analysis of Transparent Leadership By Daniel Houser; David M. Levy; Kail Padgitt; Sandra J. Peart; Erte Xiao
  7. Strengthening Corporate Governance in India A Review of Legislative and Regulatory Initiatives in 2013-14 By Balasubramanian, Bala N.
  8. Social Networks as Contract Enforcement: Evidence from a Lab Experiment in the Field By Arun G. Chandrasekhar; Cynthia Kinnan; Horacio Larreguy
  9. Electoral politics and regional development. Assessing the geographical allocation of public investment in Turkey By Davide Luca; Andrés Rodríguez-Pose
  10. META-CDM : Multimodal, Efficient Transportation in Airports and Collaborative Decision Making By Isabelle Laplace; Aude Marzuoli; Eric Feron
  11. Revenue Equivalence of the Volunteer’s Dilemma and the Stag Hunt Game and Inferiority of Intermediate Thresholds By Friedel Bolle
  12. Cournot Competition and “Green” Innovation: An Inverted-U Relationship By L. Lambertini; J. Poyago-Theotoky; A. Tampieri
  13. Understanding the Role of Collective Imaginary in the Dynamics of Expectations: The Space Industry Case Study By Benjamin Cabanes; Blanche Segrestin; Benoît Weil; Pascal Le Masson
  14. Government revival and public sector employees' agency By Elvira Periac; Sébastien Gand; Jean-Claude Sardas
  15. Climate Change and Migration in the MENA Region: An Overview By Wodon, Quentin; Liverani, Andrea
  16. The political economy of social accountability in rural Uganda By Sophie King
  17. Partisan conflict By Azzimonti-Renzo, Marina

  1. By: Laurent Bouton; Paola Conconi; Francisco Pino; Maurizio Zanardi
    Abstract: Why are U.S. congressmen reluctant to support gun control regulations, despite the fact that most Americans are in favor of them? We argue that re-election motives can lead politicians to take a pro-gun stance against the interests of an apathetic majority of the electorate, but in line with the interests of an intense minority. We develop a model of gun control choices in which incumbent politicians are both office and policy motivated, and voters differ in the direction and intensity of their preferences. We derive conditions under which politicians support gun control early in their terms, but oppose them when they approach re-election. We test the predictions of the model by analyzing votes on gun-related legislation in the U.S. Senate, in which one third of the members are up for re-election every two years. We find that senators are more likely to vote pro gun when they are close to facing re-election, a result which holds comparing both across and within legislators. Only Democratic senators "flip flop'' on gun control, and only if the group of pro-gun voters in their constituency is of intermediate size.
    JEL: D72 I18
    Date: 2014–06
  2. By: Santosh Anagol; Thomas Fujiwara
    Abstract: Exploiting regression discontinuity designs in Brazilian, Indian, and Canadian first-past-the-post elections, we document that second-place candidates are substantially more likely than close third-place candidates to run in, and win, subsequent elections. Since both candidates lost the election and had similar electoral performance, this is the effect of being labeled the runner-up. We explore the potential mechanisms for this runner-up effect, including selection into candidacy, heuristic behavior by political actors, and the runner-up obtaining an advantage from strategic coordination (being more likely to become a focal point). Selection into candidacy is unlikely to explain the effect on winning subsequent elections, and the weight of evidence suggests the effect is driven by strategic coordination. We find no effect of finishing in third-place versus fourth-place.
    JEL: D03 D72 O10
    Date: 2014–06
  3. By: Abdelkader Baaziz (IRSIC - Institut de Recherches en Sciences de l'Information et de Communication - Aix Marseille Université : EA4262); Luc Quoniam (IRSIC - Institut de Recherches en Sciences de l'Information et de Communication - Aix Marseille Université : EA4262)
    Abstract: The aim of this paper is to show the complexity of the political, legal, social and economic environments where the Algerian State-Owned Firms operate. These environments are qualified by "uncertainty" given the instability of the different parameters cited. Since 1988, Algeria has initiated deeper economic reforms supported by significant legislation and international agreements. In this uncertain environment, Algerian State-Owned Firm cannot rely only on their internal capabilities. They should, create partnerships, both with suppliers, subcontractors, universities and even competitors. There is a need for these firms to: Transform their organization to a new form improved for unexpected events and enough resilience to adapt to uncertain environments. Build a Strategic Intelligence Information System able to facilitate decision-making and reduce risks inherent to the strategic choices. Find ways to reverse choice when unexpected events occur. This article shows there is a need to handle the following risks: Inertia against the process of organizational transformation, wrong understanding of the received signals from the environment and poor reaction of the decision-maker to signals and events in the environment.
    Keywords: Strategic Intelligence Information System; Knowledge Management; Competitive Intelligence; Business Intelligence; Decision-making under Uncertainty; Risk
    Date: 2014–06–01
  4. By: Sven Stadtmüller
    Abstract: Since election results routinely show that elderly people are especially prone to cast their votes for the German Conservatives and do hardly sympathize with the Greens, the question arises: Does the ageing of the electorate go along with an increasing asymmetry of electoral chances? The article examines whether the electoral success of the Conservatives in the elderly population stems from a long-standing party affiliation or from emerging conservative attitudes in the lifecourse. Using Data from the German Socio-economic Panel (SOEP) the results provide support for cohort effects: In the prospering era after World War II, many people established an affiliation towards the Conservatives and retained it. The "Babyboomers" instead show (1) a much lesser extent of support for the Conservatives (2) a much higher sympathy towards the Greens and (3) a higher rate of disenchantment with political parties at the same time. In sum, the ageing of the electorate may result in better electoral chances for the Greens rather than the conservatives.
    Keywords: Population ageing, election, party identification, cohort effects
    Date: 2014
  5. By: Nyborg, Karine (Dept. of Economics, University of Oslo)
    Abstract: It is often argued that projects involving public good changes should be chosen on the basis of monetary valuation and cost-benefit analysis (CBA). In democratic project selection processes, however,decision-makers cannot generally interpret CBA as measuring projects’ social welfare effects.The reason is partly that decision-makers’views of the good society differ –that is, they typically do not hold the same social welfare function – and partly because separating efficiency anddistribution is even less straightforward in democratic than in dictatorial decision-making processes.
    Keywords: Environmental cost-benefit analysis; ethics; democratic decision-making;
    JEL: A11 D31 D61 D63
    Date: 2014–07–04
  6. By: Daniel Houser (Interdisciplinary Center for Economic Science and Department of Economics, George Mason University); David M. Levy (Center for the Study of Public Choice and Department of Economics, George Mason University); Kail Padgitt (Tax Foundation); Sandra J. Peart (University of Richmond); Erte Xiao (Department of Social and Decision Sciences Carnegie Mellon University)
    Abstract: Does transparent leadership promote cooperative groups? We address this issue using a public goods experiment with exogenously selected leaders who are able to send non-binding contribution suggestions to the group. To investigate the effect of transparency in this setting we vary the ease with which a leader’s actions are known by the group. We find leaders’ suggestions encourage cooperation in all treatments, but that both leaders and their group members are more likely to follow leaders’ recommendations when institutions are transparent so that non-leaders can easily see what the leader does. Consequently, transparency leads to significantly more cooperation, higher group earnings and reduced variation in contributions among group members. Length: 46
    Keywords: experimental economics
    Date: 2014–06
  7. By: Balasubramanian, Bala N.
    Abstract: The passing of the long awaited Companies Act in 2013 is probably the single most important development in India’s history of corporate legislation, next only to the monumental Companies Act 1956 which it replaces. While significant improvements have been effected in required standards of corporate governance, there is also some concern regarding overly increasing compliance and regulatory costs and efforts for companies as well as their independent directors. Among the major provisions of the Act are those of restraining voting rights of interested shareholders on related party transactions, recognition of board accountability to stakeholders besides shareholders, and extension of several good governance requirements to relatively large unlisted corporations. The author (Adjunct Professor at the Indian Institute of Management Ahmedabad, and Founding and former Chairman, and Advisor of the Centre for Corporate Governance and Citizenship at the Indian Institute of Management Bangalore) acknowledges with gratitude the very helpful comments and suggestions of Afra Afsharipour, Sharad Abhyankar and Nawshir Mirza.
  8. By: Arun G. Chandrasekhar; Cynthia Kinnan; Horacio Larreguy
    Abstract: Absence of well-functioning formal institutions leads to reliance on social networks to enforce informal contracts. Social ties may aid cooperation, but agents vary in network centrality, and this hierarchy may hinder cooperation. To assess the extent to which networks substitute for enforcement, we conducted high-stakes games across 34 Indian villages. We randomized subjects' partners and whether contracts were enforced to estimate how partners’ relative network position differentially matters across contracting environments. Socially close pairs cooperate even without enforcement; distant pairs do not. Pairs with unequal importance behave less cooperatively without enforcement. Thus capacity for cooperation depends on the underlying network.
    JEL: D03 D14 O16 Z13
    Date: 2014–06
  9. By: Davide Luca; Andrés Rodríguez-Pose
    Abstract: One of the most important decisions that governments face is how to allocate the public resources necessary for development, given each countrys budget constraints. According to the literature on the links between wealth and institutional performance, highly kleptocratic countries are expected to show higher levels of politicisation of the public purse. The article tests the extent to which socioeconomic criteria (equity and efficiency) or electoral concerns determined the geographical distribution of public investment in the 81 provinces of Turkey between 2004 and 2012. Our results show that, although electoral concerns mattered for the allocation, socioeconomic measures remained the most relevant predictors of investment. Moreover, in contrast to official regional development policy principles, the Turkish state tended to favour areas with a higher level of development over those with greater ‘socioeconomic need’. Our results therefore challenge much of the distributive politics literature, which has overly emphasised the role of pork-barrel in public policy-making. At the same time, they underline the need of paying more attention to the political economy of regional development strategies.
    Keywords: Regional development policies, distributive politics, public investments, political geography, Turkey.
    JEL: H76 O12 O53 R12 R58
    Date: 2014–06
  10. By: Isabelle Laplace (DD - ENAC - Programme transverse Développement Durable - Ecole Nationale de l'Aviation Civile - PRES Université de Toulouse); Aude Marzuoli (MAIAA - ENAC - Laboratoire de Mathématiques Appliquées, Informatique et Automatique pour l'Aérien - Ecole Nationale de l'Aviation Civile - PRES Université de Toulouse); Eric Feron (MAIAA - ENAC - Laboratoire de Mathématiques Appliquées, Informatique et Automatique pour l'Aérien - Ecole Nationale de l'Aviation Civile - PRES Université de Toulouse)
    Abstract: Be it snow, volcanic ash or strikes, crisis events impose high costs on the air transportation system and society. Airlines have progressively learned to mitigate the irregular operations arising from such events through procedures such as Airport Collaborative Decision Making (A-CDM) for traffic flow and airport departure management; however the passenger's door-to-door journey during difficult times often remains unpleasant. Meta-CDM (Multimodal, Efficient Transportation in Airports and Collaborative Decision Making), aims to take a passenger-centric approach and to examine how airside and landside CDM can be interlinked with other transport modes to minimize the impact of severe disruptions. We provide an analysis of past successes and failures of passenger-centric operations, by investigating representative disruptive events. We focus on the links between different transportation modes and the practicalities of switching modes in a crisis situation. We analyze if and how passenger metrics could be used to measure the performance of an extended A-CDM concept.
    Keywords: A-CDM; disruptive events, passenger centric metrics, resilience, multimodality
    Date: 2014–04–15
  11. By: Friedel Bolle (Faculty of Business Administration and Economics, European University Viadrina, Frankfurt (Oder))
    Abstract: The launch of a public project requires “enough” support from a group of n players. If players have only binary decision sets (participate or not, vote approvingly or not) this game is called a Binary Threshold Public Goods game (BTPG). In this paper we keep the individual cost/benefit ratios of all players constant and vary only the (rather generally defined) threshold. The revenues of the various BTPG equilibria are compared. Applying two principles of equilibrium selection, the least and the most demanding threshold, namely “one supporting player is sufficient” (Volunteer’s Dilemma) and “support by all players is necessary” (Stag Hunt game) are revenue equivalent for all players. Compared with the Stag Hunt game, all intermediate thresholds are connected with Pareto-inferior revenues.
    Keywords: Threshold Public Goods, binary decisions, mixed strategy equilibria
    JEL: H41 D71
    Date: 2014–06
  12. By: L. Lambertini; J. Poyago-Theotoky; A. Tampieri
    Abstract: We evaluate the relationship between competition and innovation in an industry where production is polluting and R&D has the aim to reduce emissions. We build up an oligopoly model where n firms compete in quantities and decide their investment in green R&D. When environmental taxation is exogenous, the investment in green R&D always increases with the number of firms in the industry. We analyse next the case where taxation is endougenously determined by a regulator with the aim to maximise social welfare. An inverted-U relationship exists under reasonable conditions, and it is driven by the presence of spillovers.
    JEL: Q55 Q56 O30 L13
    Date: 2014–06
  13. By: Benjamin Cabanes (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Blanche Segrestin (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Benoît Weil (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Pascal Le Masson (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris)
    Abstract: The main objective of this study attempts to contribute to a growing body of research in the understanding of innovation and technological development. When addressing radical changes in technology and innovation, ideas derived from expectations and promises have become key issues in transforming a vision into reality. Thus, our paper aims to investigate the dynamics of expectations and its relationship to the collective imaginary when applied to the space industry. The space industry is one of the most exemplary cases to study the dynamics of social expectations (i.e. space observation, space exploration, the conquest of space, and etc.) and it has clearly been considered as a strong stimulus for design efforts. In order to illustrate the processes involved with fulfilling the design of new visions and innovative promises, we use the most recent models of design reasoning (C-K theory) to support our hypothesis.
    Keywords: Technology Development; Innovation Development; Dynamic of Expectations; Collective Imaginary; Social Imaginary; C-K design theory; Space Industry
    Date: 2014–06–15
  14. By: Elvira Periac (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Sébastien Gand (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Jean-Claude Sardas (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris)
    Abstract: In the Public management debate on a post/beyond New Public Management phase, there has been a stream of research on public sector employees. Our paper investigates the role of public sector employees in the actual "government revival". Strategy as Practice appears as a particularly relevant framework to analyze how the study of the micro activity of public sector employees can enlighten our understanding of the making of the public policy strategy making. Our research question is: how do practitioners, middle managers but also employees without a managerial role, individually and as groups, contribute to strategy-making of public policies? On the basis of an in-depth case study in a public administration in charge of the implementation of environmental public policies, we argue that not only middle managers' agency is crucial to strategy-making but also that of employees. We also propose a complementary understanding of strategic agency as regulated and organized by the group through "areas of discussion". On this basis, we suggest that the way public sector employees operate in a context of government revival might be key to the reconfiguration of public action, and thus to the reconceptualization of public services.
    Keywords: Strategy as practice ; Agency ; Public Management ; Environmental policies ; Areas of discussion
    Date: 2014–07–02
  15. By: Wodon, Quentin; Liverani, Andrea
    Abstract: Climate change and migration are major concerns in the MENA region, yet the empirical evidence on the impact of climate change and extreme weather events on migration remains limited. Information is broadly lacking on how households in vulnerable areas perceive changes in the climate, how they are affected by extreme weather events, whether they benefit from community and government programs to help them cope with and adapt to a changing climate, and how these conditions influence the decision of household members to migrate, either temporarily or permanently. This introductory chapter summarizes briefly the main results of the study which relied on existing data as well as focus groups and new household surveys collected in 2011 in Algeria, Egypt, Morocco, Syria, and Yemen. The results suggest that households do perceive important changes in the climate, and that many households are being affected by extreme weather events resulting in losses in income, crops, and livestock. The coping and adaptation strategies used by households to deal with weather shocks are diverse, but also limited, with most households not able to recover from the negative impact of weather shocks. The ability of community level responses and government programs to support households is also very limited. Finally, while climate change is not today the main driver of migration flows, it does appear to contribute to these flows, and worsening climatic conditions are likely to exacerbate future migration flows.
    Keywords: Clinate Change, Migration, Middle East and North Africa
    JEL: R23
    Date: 2014–06
  16. By: Sophie King
    Abstract: Abstract Social accountability has become an important new buzzword among development actors seeking to understand the forms of state-society synergy that may be supportive of better public services. Advocates suggest demand-side initiatives are key to increasing the power of the poor in service provision but sceptics are concerned such mechanisms may generate mistrust of existing democratic processes while failing to challenge structural inequalities between disadvantaged citizens and political elites. This paper advances these debates by presenting qualitative research findings about political capabilities outcomes for different stakeholders within rural health and education services resulting from the social accountability interventions of a research and development NGO in Western Uganda. The paper supports arguments in the literature for NGOs to engage in more politicized strategies aimed at tackling structural inequality when seeking to advance the political capabilities of disadvantaged groups. The findings also suggest however, that within the restricted political space of rural Uganda at the current juncture, NGOs can generate limited improvements to service provision by bringing local state and civil society elites together for deliberative problem-solving.
    Date: 2014
  17. By: Azzimonti-Renzo, Marina (Federal Reserve Bank of Philadelphia)
    Abstract: American politics have become extremely polarized in recent decades. This deep political divide has caused significant government dysfunction. Political divisions make the timing, size, and composition of government policy less predictable. According to existing theories, an increase in the degree of economic policy uncertainty or in the volatility of fiscal shocks results in a decline in economic activity. This occurs because businesses and households may be induced to delay decisions that involve high reversibility costs. In addition, disagreement between policymakers may result in stalemate, or, in extreme cases, a government shutdown. This adversely affects the optimal implementation of policy reforms and may result in excessive debt accumulation or inefficient public-sector responses to adverse shocks. Testing these theories has been challenging given the low frequency at which existing measures of partisan conflict have been computed. In this paper, I provide a novel high-frequency indicator of the degree of partisan conflict. The index, constructed for the period 1891 to 2013, uses a search-based approach that measures the frequency of newspaper articles that report lawmakers' disagreement about policy. I show that the long-run trend of partisan conflict behaves similarly to political polarization and income inequality, especially since the Great Depression. Its short-run fluctuations are highly related to elections, but unrelated to recessions. The lower-than-average values observed during wars suggest a “rally around the flag" effect. I use the index to study the effect of an increase in partisan conflict, equivalent to the one observed since the Great Recession, on business cycles. Using a simple VAR, I find that an innovation to partisan conflict increases government deficits and significantly discourages investment, output, and employment. Moreover, these declines are persistent, which may help explain the slow recovery observed since the 2007 recession ended.
    Keywords: Economic policy; Partisan conflic; Politics; Polarization; Business cycles;
    Date: 2014–06–01

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