nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2014‒08‒20
seventeen papers chosen by
Stan C. Weeber, McNeese State University

  1. A Model of Two-stage Electoral Competition with Strategic Voters By Shino Takayama
  2. Providing global public goods: Electoral delegation and cooperation By Martin G. Kocher; Fanagfang Tan; Jing Yu
  3. Does Forced Voting Result in Political Polarization? By Fernanda L L de Leon; Renata Rizzi
  4. Who do Unions Target? Unionization over the Life-Cycle of U.S. Businesses By Emin Dinlersoz; Henry Hyatt; Jeremy Greenwood
  5. A Concise Axiomatization of a Shapley-type Value for Stochastic Coalition Processes By Ulrich Faigle; Michel Grabisch
  6. The 2014 EP Elections: A Victory for European Democracy? A Report on the LEQS Annual Event 2014 By Eri Bertsou
  7. A Model of Influence Based on Aggregation Function By Michel Grabisch; Agnieszka Rusinowska
  8. Unintended triadic closure in social networks: The strategic formation of research collaborations between French inventors By Nicolas CARAYOL; Lorenzo CASSI; Pascale ROUX
  9. Management Influence on Investors: Evidence from Shareholder Votes on the Frequency of Say on Pay By Ferri, Fabrizio; Oesch, David
  10. The Political Intergenerational Welfare State By Bishnu, Monisankar; Wang, Min
  11. Politics, political settlements and social change in post-colonial Rwanda By Frederick Golooba-Mutebi
  12. Probabilistic opinion pooling generalized Part one: General agendas By Dietrich, Franz; List, Christian
  13. Careers Patterns in Greek Academia: Social Capital and Intelligent Careers, but for Whom? By Nikos Bozionelos
  14. A Replication of "The Political Determinants of Federal Expenditure at the State Level" (Public Choice, 2005) By Stratford Douglas; W. Robert Reed
  15. Investigating the links between political settlements and inclusive development in Uganda: towards a research agenda By Frederick Golooba-Mutebi; Sam Hickey
  16. Stimulating industrial ecosystems with sociotechnical imaginaries: The case of Renault Innovation Community By Sophie Hooge; Laura Le Du
  17. Games induced by the partitioning of a graph By Michel Grabisch; Alexandre Skoda

  1. By: Shino Takayama (School of Economics, The University of Queensland)
    Abstract: This paper proposes a two-party spatial model of policy and valence issues for office-seeking candidates who face a two-stage electoral process with strategic voters. We study how the difference in valences among candidates affects the equilibrium outcomes when voters are strategic and candidates consider their winning chances in general and primary elections. Our results indicate that compared with the case of just maximizing her party median voters expected payoff, a forward-looking challenger chooses a more moderate policy so that she can appeal to the general population, and that the winning probability in the general election for the winning candidate in the primary election increases because of the more moderate policy promise that she chooses. The model is analytically tractable, and provides a vehicle for answering normative questions about holding primary elections. Finally, we provide empirical predictions on primaries and the roles of valences in elections.
    Date: 2014–07–21
  2. By: Martin G. Kocher; Fanagfang Tan; Jing Yu
    Abstract: This paper experimentally examines the effect of electoral delegation on providing global public goods shared by several groups. Each group elects a delegate who can freely decide on each group member's contribution (including the contribution of herself) to the global public good. Our results show that people mostly vote for delegates who assign equal contributions for every group member. However, in contrast to standard theoretical predictions, unequal contributions across groups drive cooperation down over time, and it decreases efficiency by almost 50% compared to the benchmark. This pattern is not driven by delegates trying to exploit their fellow group members, as indicated by the theory - quite to the opposite, other-regarding preferences and a re-election incentives guarantee that delegates assign equal contributions for all group members. Since the source of the resulting inefficiency is the polycentric nature of global public goods provision together with other-regarding preferences, we use the term P-inefficiency to describe our finding.
    Keywords: Global Public Goods, Delegation, Cooperation, Experiment
    JEL: C92 D72 H41
    Date: 2014–08–01
  3. By: Fernanda L L de Leon (University of East Anglia); Renata Rizzi (Universidad de Sao Paulo)
    Abstract: This paper estimates effects of exposure to compulsory voting on individuals' political preferences, through a regression discontinuity framework. These results are important to understand effects of a voting system transition. The identification comes from Brazil's dual voting system: voluntary and compulsory. Using self-collected data, we find that compulsory voting legislation has sizeable effects on individuals' political preferences, making them more likely to identify with a political party, to become extreme oriented and to move to the left.
    Date: 2014–08
  4. By: Emin Dinlersoz (Bureau of the Census); Henry Hyatt (Bureau of the Census); Jeremy Greenwood (University of Pennsylvania)
    Abstract: What type of businesses do unions target for organizing? 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. An establishment becomes unionized if the union targets it for organizing and wins the union certification election. The model predicts two main selection effects: unions organizing occurs in larger and more productive establishments early in their life-cycles, and among the establishments targeted for organizing, unions are more likely to win elections in smaller and less productive ones. These predictions find support in union certification election data for 1977-2007 matched with data on establishment characteristics.
    Keywords: Unionization, Union Organizing, Union Certification Election, Diffusion of Unionization, Bayesian Learning, Productivity.
    JEL: J5 J50 J51 L11 L23 L25 L6 D24 D21
    Date: 2014–05
  5. By: Ulrich Faigle (Universität zu Köln - Mathematisches Institut); Michel Grabisch (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: The classical Shapley value is the average marginal contribution of a player, taken over all possible ways to form the grand coalition $N$ when one starts from the empty coalition and adds players one by one. In a previous paper, the authors have introduced an allocation scheme for a general coalition formation model where the evolution of the coalition of active players is ruled by a Markov chain and need not finish with the grand coalition. This note provides an axiomatization which is only slightly weaker than the original one but allows a much more transparent proof. Moreover, the logical independence of the axioms is exhibited.
    Keywords: Coalitional game; coalition formation process; Shapley value
    Date: 2013
  6. By: Eri Bertsou
    Abstract: In the run up to the 2014 European Parliament elections, the new Spitzenkandidaten process and European-wide party campaigns fuelled expectations of strengthening democratic processes in Europe. At the same time, the anticipated surge of support for anti-establishment and Eurosceptic parties caused concerns among political scientists. This paper summarises and critically reviews the contributions presented at the LEQS Annual Event The 2014 EP Elections: A Victory for European Democracy? held on the 2nd of June 2014, a week after the final European elections results were announced. The panel discussed the implications of election results for democracy in the European Union and its Member States. The panelists were Dr Sara Hagemann, Dr Mareike Kleine and Professor Iain Begg from the LSE’s European Institute and the event was chaired by Professor Maurice Fraser.
    Keywords: European Parliament; European elections; participation; European Commission
    Date: 2014–07–07
  7. By: Michel Grabisch (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Agnieszka Rusinowska (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: The paper concerns a dynamic model of influence in which agents make a yes-no decision. Each agent has an initial opinion which he may change during different phases of interaction, due to mutual influence among agents. We investigate a model of influence based on aggregation functions. Each agent modifies his opinion independently of the others, by aggregating the current opinion of all agents. Our framework covers numerous existing models of opinion formation, since we allow for arbitrary aggregation functions. We provide a general analysis of convergence in the aggregation model and find all terminal classes and states. We show that possible terminal classes to which the process of influence may converge are terminal states (the consensus states and non trivial states), cyclic terminal classes, and unions of Boolean lattices (called regular terminal classes). An agent is influential for another agent if the opinion of the first one matters for the latter. A generalization of influential agent to an irreducible coalition whose opinion matters for an agent is called influential coalition. The graph (hypergraph) of influence is a graphical representation of influential agents (coalitions). Based on properties of the hypergraphs of influence we obtain conditions for the existence of the different kinds of terminal classes. An important family of aggregation functions -- the family of symmetric decomposable models -- is discussed. Finally, based on the results of the paper, we analyze the manager network of Krackhardt.
    Keywords: influence; aggregation function; convergence; terminal class; influential coalition; hypergraph; social network
    Date: 2013
  8. By: Nicolas CARAYOL; Lorenzo CASSI; Pascale ROUX
    Abstract: Most of the empirical and theoretical literature aimed at understanding the behavioral patterns that lead to the formation of social networks argue that such networks are clustered because agents like social closure, since it facilitates cooperation enforcement, for instance, or increases match quality. We argue that, in certain circumstances, network clustering may arise for other reasons, even though agents may actually not like redundancy in connections. We propose a theoretical model of the formation of new research collaboration that we estimate on the longitudinal evolution of the French co-invention network. We show that if this type of social network is closed it is because it correlates with exogenous metrics affecting the costs of direct link formation, not because agents prefer to close triangles per se. This result is obtained thanks to the richness of our dataset, allowing us to control for dyadic fixed-effects and various costs of network formation (geographical distance, technological specialization, and institution boundaries and attributes) omitted in previous studies.
    Keywords: Strategic network formation; Inter-individual collaborations; Closure; Clustering; Patents.
    JEL: D85 C23 O31 Z13
    Date: 2014
  9. By: Ferri, Fabrizio; Oesch, David
    Abstract: The literature on shareholder voting has mostly focused on the influence of proxy advisors on shareholder votes. We exploit a unique empirical setting enabling us to provide a direct estimate of management’s influence. Analyzing shareholder votes on the frequency of future say on pay votes, we find that a management recommendation for a particular frequency is associated with a 26% increase in voting support for that frequency. Additional tests suggest that the documented association is likely to capture a causal effect. Management influence varies across firms and is smaller at firms where perceived management credibility is lower. Compared to firms adopting an annual frequency, firms following management’s recommendation to adopt a triennial frequency are significantly less likely to change their compensation practices in response to an adverse say on pay vote, consistent with the notion that a less frequent vote results in lower management accountability.
    Keywords: Say on pay, say when on pay, shareholder votes, management influence, CEO compensation, shareholder activism
    JEL: G34 G38 J33 M12
  10. By: Bishnu, Monisankar; Wang, Min
    Abstract: This paper characterizes an intergenerational welfare state with endogenous education and pension choice under general equilibrium-probabilistic voting. We show that politically implementing public education program always increases the future human capital, but this higher future human capital would not help support a more generous social security in the future. The effect of implementing PAYG social security on education however crucially depends on the sources of funding for education investment. Establishing PAYG pension program depresses investment in public education. However if the source of funding for education investment is private, in both the cases when pension is the only instrument or when public pension and public education are implemented together as a package, there can be an improvement in education investment if and only if the political influence of the old is limited and so the size of the PAYG social security is small. A substantially thick pension scheme which results from a heavy influence of the old in the political process spoils the mutual benefits.
    Keywords: education; Markov perfect equilibrium; Pension; Probabilistic voting; Endogenous growth
    JEL: D90 E6 H3 H52 H55
    Date: 2014–08–01
  11. By: Frederick Golooba-Mutebi
    Abstract: Until 1994 Rwanda's post-colonial history was marked by episodes of political violence, attempted wars, and wars of different durations. Feeding the violence was the absence of an elite consensus about how best to take Rwanda forward after colonial rule ended, the rules for doing so, and the roles to be played by the holders and losers of power. This paper explores key aspects of Rwanda's political evolution from independence to-date. The critical stages are the events popularly known as the 1959 social revolution that preceded independence in 1962; the period from 1962 to the overthrow of Kayibanda's First Republic in 1973; from the Habyarimana-led military coup to 1994; and the Rwanda Patriotic Front -led post-genocide period. The paper examines the different political coalitions that have ruled the country since independence, their impact on political stability and their role in catalysing or influencing the cycles of turmoil with which it is associated. In the case of the current coalition, this paper also provides a glimpse into the efforts they have made to promote the wellbeing of ordinary Rwandans. It first charts the historical origins and the current state of drivers of instability and elite fragmentation. It then identifies the nature of interactions between drivers of instability and political settlements over time, and their impact on governance and the pursuit of development.
    Date: 2013
  12. By: Dietrich, Franz; List, Christian
    Abstract: How can different individuals' probability assignments to some events be aggregated into a collective probability assignment? Classic results on this problem assume that the set of relevant events -- the agenda -- is a σ-algebra and is thus closed under disjunction (union) and conjunction (intersection). We drop this demanding assumption and explore probabilistic opinion pooling on general agendas. One might be interested in the probability of rain and that of an interest-rate increase, but not in the probability of rain or an interest-rate increase. We characterize linear pooling and neutral pooling for general agendas, with classic results as special cases for agendas that are σ-algebras. As an illustrative application, we also consider probabilistic preference aggregation. Finally, we unify our results with existing results on binary judgment aggregation and Arrovian preference aggregation. Our unified theorems show why the same kinds of axioms (independence and consensus preservation) have radically different implications for different aggregation problems: linearity for probability aggregation and dictatorship for binary judgment or preference aggregation.
    Keywords: Probabilistic opinion pooling, judgment aggregation, subjective probability, probabilistic preferences, vague/fuzzy preferences, agenda characterizations, a unified perspective on aggregation
    JEL: D70 D71 D8 D80
    Date: 2013–05
  13. By: Nikos Bozionelos (Audencia Recherche - Audencia)
    Abstract: Purpose: To develop a comprehensive account for careers within the Greek academic system. Historical, cultural and geographical features of the country have created a unique context that has shaped the way academic careers evolve. Design/methodology/approach: The primary methods of data collection were retrospective participant observation and discussions in interview form with individuals who have had various types of experience with the Greek Higher Education system. Findings: The major factor that shapes careers in Greek academia is social capital or Know-whom that operates within a broader cultural environment where institutional collectivism is extremely low, the in-group - out-group distinction is a major element, and political party affiliation plays a key role in everyday affairs. As a result academic careers in Greece are almost exclusively determined by membership, a priory or earned, to an "in-group" that is linked via blood, family friendship, business and political party ties. This "in-group" uses its social capital to control academic careers across all stages for the benefit of its members. Research limitations/implications: There are method limitations, but relevant concerns were largely alleviated by precautionary measures and the way data were utilized. Ethnography may be the most appropriate method to disentangle the way networks and social capital impact careers. Practical implications: Achieving substantive change, such as increasing meritocracy, within a sector may be impossible without considering the broader cultural context that encapsulates it. Originality/value: The study is amongst the very first to unveil the "dark side" of social capital, and show how social capital may benefit the interests of in-groups at the expense of the collective.
    Keywords: Academia, Careers, Politics, Social capital, National culture, Nepotism, Greece, Dark side, Intelligent careers, Know-whom, In-group, Out-group
    Date: 2014–06–01
  14. By: Stratford Douglas (West Virginia University, College of Business and Economics); W. Robert Reed (University of Canterbury, Department of Economics and Finance)
    Abstract: This paper replicates and analyses a study by Hoover and Pecorino (2005) on federal spending in US states. H&P followed on path-breaking research by Atlas et al. (1995) in which evidence was claimed in favour of the "small state effect;" namely, that since every state is represented by two senators, small states have a disproportionate influence relative to their population size. Using H&P's data, we both replicate their results, and demonstrate strong support for the small state effect when we formally test their predictions. The contribution of this study is that we demonstrate that this empirical support vanishes when we (i) employ cluster robust standard errors rather than conventional OLS standard errors, and (ii) include a variable for population growth as suggested in a recent study by Larcinese et al. (2013). Our results lead us to conclude that there is no evidence to support the hypothesis of a "small state effect."
    Keywords: Small state effect, Representation, US Senate, Replication study
    JEL: H1 H5 C1
    Date: 2014
  15. By: Frederick Golooba-Mutebi; Sam Hickey
    Abstract: The changing character of the political settlement in Uganda since independence has closely shaped the character and performance of the institutions and actors responsible for delivering development. Successive political leaders sought to establish 'dominant ruler' forms of political settlement, with little sustained effort to depersonalise public institutions or build stable and inclusive ruling coalitions. This seemed to change in 1986, as Yoweri Museveni's National Resistance Movement (NRM) sought to establish a new settlement, based on a broad-based coalition and an ostensible commitment to development. However, the NRM's record of generating the commitment and capacity required to deliver development has been mixed. On the one hand, a mixture of elite commitment, pockets of bureaucratic excellence and external support has enabled impressive levels of economic growth, macroeconomic stability and social expenditure. However, the current settlement – characterised by deepening levels of competitive clientelism, highly personalised forms of public bureaucracy, collusive state–business relations, and a ruling coalition that is (expensively) inclusive at the lower levels while becoming narrower and more nepotistic at the pinnacle – has failed to provide the basis for tackling the more difficult challenges of achieving structural transformation, delivering high-quality public services and challenging social inequalities. The case of Uganda reveals the need to extend the current boundaries of political settlement analysis beyond a narrow focus on incentives at the national level, to incorporate a stronger focus on ideas and transnational factors. Dominant ideas around state legitimacy and development have played an important role in shaping governance and development in Uganda, and this has often involved a role for the shifting sets of transnational actors on which the regime relies to maintain itself in power. This paper includes suggestions for further research on the politics of development in Uganda, including around the extent to which the discovery of oil will both be shaped by and help reshape the political settlement.
    Date: 2013
  16. By: Sophie Hooge (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Laura Le Du (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris)
    Abstract: Facing the necessity to increase their innovation capabilities in a more and more holistic context, companies are creating new collaborative organizations aiming to collectively explore potential radical innovation fields. In this paper, we propose to study the nature of these new collectives for innovation through two managerial patterns: objects of collaboration and organizational mechanisms of coordination. Based on longitudinal collaborative research with the French carmaker Renault, the research analyses the case of the Renault Innovation Community, which involved members in original collaboration features to stimulate the industrial ecosystem of mobility and to support the potential emergence of new ecosystems. The main results of the empirical research underlined that: (1) objects of collaboration surpassed the detection of societal expectations to focus on sociotechnical imaginaries stimulation and dissemination; and (2) organizational mechanisms of collaboration exceed open innovation logics to focus on the collective building of favorable emergence conditions for new industrial ecosystems.
    Keywords: sociotechnical imaginaries; industrial ecosystem; innovation community
    Date: 2014–06–07
  17. By: Michel Grabisch (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Alexandre Skoda (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne)
    Abstract: The paper aims at generalizing the notion of restricted game on a communication graph, introduced by Myerson. We consider communication graphs with weighted edges, and we define arbitrary ways of partitioning any subset of a graph, which we call correspondences. A particularly useful way to partition a graph is obtained by computing the strength of the graph. The strength of a graph is a measure introduced in graph theory to evaluate the resistance of networks under attacks, and it provides a natural partition of the graph (called the Gusfield correspondence) into resistant components. We perform a general study of the inheritance of superadditivity and convexity for the restricted game associated with a given correspondence. Our main result is to give for cycle-free graphs necessary and sufficient conditions for the inheritance of convexity of the restricted game associated with the Gusfield correspondence.
    Keywords: Communication networks;Coalition structure;Cooperative game; Strength of a graph
    Date: 2012–08–29

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