New Economics Papers
on Collective Decision-Making
Issue of 2014‒07‒28
fifteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Political corruption and voter turnout: mobilization or disaffection? By Elena Costas-Pérez
  2. Third-Party Punishment: Retribution or Deterrence? By Fangfang Tan; Erte Xiao
  3. Strategy-proofness and essentially single-valued cores revisited By EHLERS, Lars
  4. Rationalizable Suicides: Evidence from Changes in Inmates' Expected Length of Sentence By Campaniello, Nadia; Diasakos, Theodoros; Mastrobuoni, Giovanni
  5. Who do Unions Target? Unionization over the Life-Cycle of U.S. Businesses By Jeremy Greenwood; Henry Hyatt; Emin Dinlersoz
  6. Collective Action and Armed Group Presence in Colombia By Margarita Gáfaro; Ana Maria Ibáñez; Patricia Justino
  7. Central Targets and local Agendas: Missing Lisbon 2010 By Maria Alessandra Antonelli; Veronica Grembi
  9. Setting the Bar - An Experimental Investigation of Immigration Requirements By Menusch Khadjavi; Jasper D. Tjaden
  10. An Econometric Evaluation of Competing Explanations for The Midterm Gap By Brian G. Knight
  11. Valuing Compromise for the Common Good By Gutmann, Amy; Thompson, Dennis F.
  12. Gender Issues About Negotiation: A different perception of the most important driving forces? By Claude Alavoine
  13. The Science of Making Better Decisions about Health: Cost-Effectiveness and Cost-Benefit Analysis By Louise Russell
  14. Legal Corruption, Politically Connected Corporate Governance and Firm Performance By Domadenik, Polona; Prašnikar, Janez; Svejnar, Jan
  15. Robustness of norm-driven cooperation in the commons to environmental variability By Maja Schlüter; Alessandro Tavoni; Simon Levin

  1. By: Elena Costas-Pérez (Universitat de Barcelona & IEB)
    Abstract: Corruption may affect voter turnout either by mobilizing citizens to go to the polls or by promoting voter disaffection. Using Spanish local and survey data, we study whether these effects depend on partisan leanings or the timing of scandals. Our results show that repeated episodes of corruption increase the boost abstentionism. Independent voters – those with no political attachments – are the only group that that abstains in response to corruption. The incumbent’s core supporters fail to recognise corruption within their party, while both independent voters and the opposition’s core supporters report higher corruption perceptions in response to a scandal.
    Keywords: Electoral turnout, accountability, corruption
    JEL: P16 D72 D73
    Date: 2014
  2. By: Fangfang Tan; Erte Xiao
    Abstract: We conduct an experiment to examine the role of retribution and deterrence in motivating third party punishment. In particular, we consider how the role of these two motives may differ according to whether a third party is a group or an individual. In a one-shot prisoner’s dilemma game with third party punishment, we find groups punish more when the penalty embeds deterrence than when it can only be retributive. In contrast, individual third parties’ punishment decisions do not vary on whether the punishment has any deterrent effect. In general, third party groups are less likely to impose punishment than individuals even though the punishment is costless for third parties.
    Keywords: third-party punishment, group decision making, retribution, deterrence, social dilemmas, experiment
    JEL: C72 C92 D63 D70
    Date: 2014–05
  3. By: EHLERS, Lars
    Abstract: We consider general allocation problems with indivisibilities where agents' preferences possibly exhibit externalities. In such contexts many different core notions were proposed. One is the gamma-core whereby blocking is only allowed via allocations where the non-blocking agents receive their endowment. We show that if there exists an allocation rule satisfying ‘individual rationality’, ‘efficiency’, and ‘strategy-proofness’, then for any problem for which the gamma-core is non-empty, the allocation rule must choose a gamma-core allocation and all agents are indifferent between all allocations in the gamma-core. We apply our result to housing markets, coalition formation and networks.
    Keywords: General allocation problems, Externalities, Strategy-proofness, Gamma-core
    JEL: C78 D61 D78
    Date: 2014
  4. By: Campaniello, Nadia (University of Essex); Diasakos, Theodoros (University of St. Andrews); Mastrobuoni, Giovanni (University of Essex)
    Abstract: Is there a rational component in the decision to commit suicide? Economists have been trying to shed light on this question by studying whether suicide rates are related to contemporaneous conditions. This paper goes one step further: we test whether suicides are linked to forward-looking behavior. In Italy, collective sentence reductions (pardons) often lead to massive releases of prisoners. More importantly, they are usually preceded by prolonged parliamentary activity (legislative proposals, discussion, voting, etc.) that inmates seem to follow closely. We use the legislative proposals for collective pardons to measure changes in the inmates' expectations about the length of their sentences, and find that suicide rates tend to be significantly lower when par- dons are proposed in congress. This suggests that, amongst inmates in Italian prisons, the average decision to commit suicide responds to changes in current expectations about future conditions. At least partially, therefore, the decision seems rationalizable.
    Keywords: suicides, rationality, prisons, collective pardons
    JEL: I1 D1 K4
    Date: 2014–07
  5. By: Jeremy Greenwood (University of Pennsylvania); Henry Hyatt (US Census Bureau); Emin Dinlersoz (U.S. Census Bureau)
    Abstract: What type of businesses do unions target for organizing and when? A dynamic model of the union organizing process is constructed to answer this question. A union monitors establishments in an industry to learn about their productivity, and decides which ones to organize and when. The predictions of the model find support in union certification elections data for 1977-2007 matched with data on establishment characteristics. Two selection effects emerge: unions target larger and more productive establishments early in their life-cycles, and, conditional on targeting, unions are more likely to win elections in smaller and less productive establishments.
    Date: 2014
  6. By: Margarita Gáfaro (Brown University); Ana Maria Ibáñez (Universidad de los Andes); Patricia Justino (Institute of Development Studies)
    Abstract: The main objective of this paper is to provide empirical evidence on the mechanisms that shape the relationship between violent conflict and collective action. Conflict dynamics in Colombia allow us to exploit rich variation in armed group presence and individual participation in local organizations. Our identification strategy is based on the construction of contiguous-pairs of rural communities that share common socio-economic characteristics but differ in armed group presence. This allows us to control for unobservable variables that may affect local participation and conflict dynamics simultaneously. The results show that the presence of armed groups increases overall participation in local organizations, with a particularly strong effect on political organizations. Contrary to existing results, we find that stronger individual participation may arise from coercion exercised by armed groups and not from a more vibrant civil society.
    Date: 2014–07
  7. By: Maria Alessandra Antonelli (Sapienza University of Rome); Veronica Grembi (Copenhagen Business School)
    Abstract: In a decentralized setting, are policy targets imposed by the central government on local elected officials effective? And when? We address these questions in Italy, where the central government has set a target for childcare coverage at the municipal level for Southern regions since 2007. We first implement a difference-in-differences estimator where the municipalities already complying with the target comprise the control group. We then implement a triple-difference estimator with the additional control group of municipalities in the bordering Central regions. Our results show that elected officials comply with the target mainly when it is coherent with voters’ preferences (as measured by the characteristics of the resident female population) and in reaction to political incentives (as measured by partisan alignment among levels of government).
    Keywords: Central targets, Political Incentives, Local Politicians, Difference-in- Difference-in-Difference
    JEL: H42 H72 H75 H77
    Date: 2014–07
    Abstract: On 19 April 2012, the Members of the European Parliament (MEPs) voted on the European Commission’s proposal for a Common Consolidated Corporate Tax Base (CCCTB). We exploit a unique research setting which was created by an economic impact assessment of CCCTB that was made available to the MEPs. Using regression analysis, we investigate if the voting behaviour of MEPs was influenced by the predicted economic impact of CCCTB on their country. Our results show that, even after controlling for party, country and individual variables, more favourable economic consequences of CCCTB led to a higher chance for MEPs to vote in favour of the proposal.
    Keywords: CCCTB, economic impact, European Parliament, voting behaviour
    JEL: F23 F55 H23 H25
    Date: 2014–05
  9. By: Menusch Khadjavi; Jasper D. Tjaden
    Abstract: Many Western countries face the challenge of reconciling future labor demand with growing public opposition to immigration. The dynamics and underlying processes of setting immigration requirements remain unclear as research so far mainly focuses on context-specific empirical studies. We use a public good game experiment with endogenous groups to investigate how different levels of perceived migrant potential and public debate shape immigration requirements. We employ the minimal group paradigm and immigration requirements are set by in-group voting. Our results suggest that fairness and efficiency of immigration requirements may best be described by the relationship between average population indicators and required contributions of immigrants. Public debate appears to foster fair and efficient requirements if perceived migrant potential is high
    Keywords: Immigration, Public Good, Endogenous Groups, Experiment
    JEL: C91 C92 H41 O15
    Date: 2014–07
  10. By: Brian G. Knight
    Abstract: This paper provides a unified theoretical and empirical analysis of three longstanding explanations for the consistent loss of support for the President's party in midterm Congressional elections: (1) a Presidential penalty, defined as a preference for supporting the opposition during midterm years, (2) a surge and decline in voter turnout, and (3) a reversion to the mean in voter ideology. To quantify the contribution of each of these factors, we build an econometric model in which voters jointly choose whether or not to participate and which party to support in both House and Presidential elections. Estimated using ANES data from both Presidential and midterm years, the model can fully explain the observed midterm gaps, and counterfactual simulations demonstrate that each factor makes a sizeable contribution towards the midterm gap, with the Presidential penalty playing the largest role.
    JEL: D7
    Date: 2014–07
  11. By: Gutmann, Amy; Thompson, Dennis F.
    Abstract: Pursuing the common good in a pluralist democracy is not possible without making compromises. Yet the spirit of compromise is in short supply in contemporary American politics. The permanent campaign has made compromise more difficult to achieve, as the uncompromising mindset suitable for campaigning has come to dominate the task of governing. To begin to make compromise more feasible and the common good more attainable, we need to appreciate the distinctive value of compromise and recognize the misconceptions that stand in its way. A common mistake is to assume that compromise requires finding the common ground on which all can agree. That undermines more realistic efforts to seek classic compromises, in which each party gains by sacrificing something valuable to the other, and together they serve the common good by improving upon the status quo. Institutional reforms are desirable, but they, too, cannot get off the ground without the support of leaders and citizens who learn how and when to adopt a compromising mindset.
    Date: 2013
  12. By: Claude Alavoine
    Abstract: Negotiation is a specific form of interaction based on communication in which the parties enter into deliberately, each with clear but different interests or goals and a mutual dependency towards a decision due to be taken at the end of the confrontation. Consequently, negotiation is a complex activity involving many different disciplines from the strategic aspects and the decision making process to the evaluation of alternatives or outcomes and the exchange of information. While gender differences can be considered as one of the most researched topic within negotiation studies, empirical works and theory present many conflicting evidences and results about the role of gender in the process or the outcome. Furthermore, little interest has been shown over gender differences in the definition of what is negotiation, its essence or fundamental elements. Or, as differences exist in practices, it might be essential to study if the starting point of these discrepancies does not come from different considerations about what is negotiation and what will encourage the participants in their strategic decisions. Some recent and promising experiments made with diverse groups show that male and female participants in a common and shared situation barely consider the same way the concepts of power, trust or stakes which are largely considered as the usual driving forces of any negotiation. Furthermore, results from Human Resource self-assessment tests display and confirm considerable differences between individuals regarding essential behavioral dimensions like capacity to improvise and to achieve, aptitude to conciliate or to compete and orientation towards power and group domination which are also part of negotiation skills. Our intention in this paper is to confront these dimensions with negotiation’s usual driving forces in order to build up new paths for further research.
    Date: 2014–07–15
  13. By: Louise Russell (Rutgers University)
    Abstract: Despite spending far more on medical care, Americans live shorter lives than the citizens of other high-income countries. The situation has been getting worse for at least three decades. This paper describes the main scientific methods for guiding the allocation of resources to health – cost-effectiveness analysis (CEA) and cost-benefit analysis (CBA), sketches their methodological progress over the last several decades, and presents examples of how medical practice in other high-income countries, where people live longer, follows the priorities indicated by cost-effectiveness analysis. CEA and CBA support democratic decision-making processes, which have themselves benefited from scientific inquiry; these are touched on at the end of the paper.
    Keywords: cost-effectiveness analysis, cost-benefit analysis
    JEL: H4 I1 D61
    Date: 2014–05–26
  14. By: Domadenik, Polona (University of Ljubljana); Prašnikar, Janez (University of Ljubljana); Svejnar, Jan (Columbia University)
    Abstract: In this paper we present and test a theory of how political corruption, found in many transition and emerging market economies, affects corporate governance and productive efficiency of firms. Our model predicts that underdeveloped democratic institutions that do not punish political corruption result in political connectedness of firms that in turn has a negative effect on performance. We test this prediction on an almost complete population of Slovenian joint stock companies with 100 or more employees. Using the supervisory board structure, together with balance sheet and income statement data for 2000-2010, we show that a higher share of politically connected supervisory board members leads to lower productivity.
    Keywords: corruption, corporate governance, productivity, politicians, state owned enterprises
    JEL: D2 D21 D73 G34 L32
    Date: 2014–07
  15. By: Maja Schlüter; Alessandro Tavoni; Simon Levin
    Abstract: Growing empirical evidence points to the importance of social norms for achieving sustainable use of common pool resources (CPR). Social norms can facilitate the cooperation and collective action needed to sustainable share a common resource. With global change, however, the social and environmental conditions under which cooperation has evolved and been maintained in the past may vary dramatically. Higher variability of resource availability and more frequent extreme events, for instance, will put additional pressure on cooperation, possibly triggering its collapse, with detrimental effects on the environment. In light of this, the potential impact of climate change on conflict has recently received considerable attention. Here we assess the robustness of norm-driven cooperation to changing resource availability in a stylised model of community harvesting from a shared resource. The model is a generalised representation of CPR extraction, which allows for social disapproval towards norm-violators. We use an agent-based model to assess the robustness of cooperative outcomes to variable resource flows. Our results indicate that both resource abundance and low resource variability can lead to its unsustainable use, while wither scarcity or high variability in the resource have the potential to stabilise cooperation. These findings provide insights into possible effects of global change on self-governance of the commons. They also indicate that there is no simple answer to the question whether global change has the potential to destabilise cooperation in natural resource use, and lead to environmental degradation and possible conflict.
    Date: 2014–01

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