nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2014‒09‒29
ten papers chosen by
Stan C. Weeber, McNeese State University

  1. Megan Sheahan economy of MGNREGS spending in Andhra Pradesh By Megan Sheahan; Yanyan Liu; Christopher B. Barrett; Sudha Narayanan
  2. The political economy of public transport pricing and supply decisions By Bruno DE BORGER; Stefan PROOST
  3. Coordination in Public Good Provision: How Individual Volunteering is Impacted by the Volunteering of Others By Diasakos, Theodoros M; Neymotin, Florence
  4. Unanimity in Attribute-Based Preference Domains By Sidartha Gordon
  5. Stable and sustainable global tax coordination with Leviathan governments By Thomas Eichner; Rüdiger Pethig
  6. Do Criminal Representatives Hinder or Improve Constituency Outcomes? Evidence from India By Nishith Prakash; Marc Rockmore
  7. Manipulating decision making of typical agents By V. I. Yukalov; D. Sornette
  8. Diminished-Dimensional Political Economy By Ronald M. Harstad; Reinhard Selten
  9. Does the WTO Help Member States Clean Up? By Susan Ariel Aaronson; M. Rodwan Abouharb
  10. One-Leader and Multiple-Follower Stackelberg Games with Private Information By Tomoya Nakamura

  1. By: Megan Sheahan (Cornell University); Yanyan Liu (International Food Policy Research Institute); Christopher B. Barrett (Cornell University); Sudha Narayanan (Indira Gandhi Institute of Development Research)
    Abstract: Are ostensibly demand-driven public programs less susceptible to political clientelism even when private goods are allocated? We investigate this conjecture using expenditure data at the local level from India's National Rural Employment Guarantee Scheme. By focusing on one state where accountability and transparency mechanisms have been employed and implementation efforts have been applauded, we do not find evidence of blatant vote buying before the 2009 election but do find that patronage played a small part in fund distribution after the 2009 election. Indeed most variation in expenditure is explained by the observed needs of potential benficiaries, as the scheme intended.
    Keywords: India, political economy, clientelism, project allocation, employment guarantee
    JEL: D73 H41 H42 H53 H54 I38 O12
    Date: 2014–07
  2. By: Bruno DE BORGER; Stefan PROOST
    Abstract: This paper studies the political economy of public transport pricing and quality decisions in urban areas. We consider a hypothetical two-region federation. In each region there is a demand for public transport and for car use, and the group mainly using public transport may be a majority or minority in the region; moreover, part of the users of both the public transport system and the road network may come from outside the region. In this setting, we compare regional and federal decision making on public transport fares and supply characteristics. Under regional decision-making we find that, first, the political process may result in very low public transport fares, even if car owners are a large majority of the population. The fare preferred by car owners is increasing in the toll on car use. Cost recovery always improves with the share of outside users. Second, imposing a zero deficit constraint on regional public transport operators implements the second-best welfare optimum, independent of whether car owners or non-car owners have the political majority. Third, compared to centralized decision making, decentralized decision making leads to higher fares and better cost recovery. Our findings are consistent with the lack of opposition to very large public transport subsidies in Europe, and they provide a potential explanation for the tendency towards decentralization of public transport policy-making observed in many countries over the last decades.
    Date: 2014–06
  3. By: Diasakos, Theodoros M; Neymotin, Florence
    Abstract: In this analysis, we examine the relationship between an individual's decision to volunteer and the average level of volunteering in the community where the individual resides. Our theoretical model is based on a coordination game , in which volunteering by others is informative regarding the benefit from volunteering. We demonstrate that the interaction between this information and one's private information makes it more likely that he or she will volunteer, given a higher level of contributions by his or her peers. We complement this theoretical work with an empirical analysis using Census 2000 Summary File 3 and Current Population Survey (CPS) 2004-2007 September supplement file data. We control for various individual and community characteristics, and employ robustness checks to verify the results of the baseline analysis. We additionally use an innovative instrumental variables strategy to account for reflection bias and endogeneity caused by selective sorting by individuals into neighborhoods, which allows us to argue for a causal interpretation. The empirical results in the baseline, as well as all robustness analyses, verify the main result of our theoretical model, and we employ a more general structure to further strengthen our results.
    Keywords: stochastic coordination, volunteer work, public goods,
    Date: 2013
  4. By: Sidartha Gordon (Département d'économie)
    Abstract: We provide several characterizations of unanimity decision rules, in a public choice model where preferences are constrained by attributes possessed by the alternatives (Nehring and Puppe, 2007a,b). Solidarity conditions require that when some parameters of the economy change, the agents whose parameters are kept fixed either all weakly lose or they all weakly win. Population-monotonicity (Thomson, 1983a,b) applies to the arrival and departure of agents, while replacement-domination (Moulin,1987) applies to changes in preferences. We show that either solidarity property is compatible with voter-sovereignty and strategy-proofness if and only if the attribute space is quasi-median (Nehring, 2004), and with Pareto-efficiency if and only if the attribute space is a tree. Each of these combinations characterizes unanimity.
    Keywords: Solidarity, Population-monotonicity, Replacement-domination, Unanimity, Strategy-proofness, Attribute-based Domains, Generalized Single-Peaked Domains.
    Date: 2014–09
  5. By: Thomas Eichner; Rüdiger Pethig
    Abstract: Itaya et al. (2014) study the conditions for sustainability and stability of capital tax coordination in a repeated game model with tax-revenue maximizing governments. One of their major results is that the grand tax coalition is never stable and sustainable. The purpose of this note is to prove that there are conditions under which the grand tax coalition is stable and sustainable in Itaya et al.’s model.
    Keywords: global tax coordination, repeated game, sustainability, stability
    JEL: H71 H77
    Date: 2014
  6. By: Nishith Prakash (University of Connecticut); Marc Rockmore (Clark University)
    Abstract: The recent increase in the number of criminally accused politicians elected to state assemblies has caused much furor in India. Despite the potentially important consequences and the widely divergent views, the implications of their elections to state legislative assemblies on constituency-level economic performance are unknown. Using a regression discontinuity design and data on the intensity of night lights in satellite imagery at the constituency level, our results suggest that the cost of electing criminally accused politicians on measures of economic activity is quite large. Using estimates of the elasticity of GDP to light, we find that the election of criminally accused candidates lead to roughly 5 percent lower GDP growth per year on average. These estimated costs increase for candidates with serious accusations, multiple accusations, and accusations regarding financial crimes. Our result survives variety of robustness checks.
    Keywords: Growth, Indian Politicians, Information disclosure, Regression Discontinuity, India
    JEL: D72 D73 O40 O12
    Date: 2014–08
  7. By: V. I. Yukalov; D. Sornette
    Abstract: We investigate how the choice of decision makers can be varied under the presence of risk and uncertainty. Our analysis is based on the approach we have previously applied to individual decision makers, which we now generalize to the case of decision makers that are members of a society. The approach employs the mathematical techniques that are common in quantum theory, justifying our naming as Quantum Decision Theory. However, we do not assume that decision makers are quantum objects. The techniques of quantum theory are needed only for defining the prospect probabilities taking into account such hidden variables as behavioral biases and other subconscious feelings. The approach describes an agent's choice as a probabilistic event occurring with a probability that is the sum of a utility factor and of an attraction factor. The attraction factor embodies subjective and unconscious dimensions in the mind of the decision maker. We show that the typical aggregate amplitude of the attraction factor is $1/4$, and it can be either positive or negative depending on the relative attraction of the competing choices. The most efficient way of varying the decision makers choice is realized by influencing the attraction factor. This can be done in two ways. One method is to arrange in a special manner the payoff weights, which induces the required changes of the values of attraction factors. We show that a slight variation of the payoff weights can invert the sign of the attraction factors and reverse the decision preferences, even when the prospect utilities remain unchanged. The second method of influencing the decision makers choice is by providing information to decision makers. The methods of influencing decision making are illustrated by several experiments, whose outcomes are compared quantitatively with the predictions of our approach.
    Date: 2014–09
  8. By: Ronald M. Harstad (Department of Economics, University of Missouri-Columbia); Reinhard Selten
    Abstract: Economists' policy advice is based on models of responses by a variety of economic entities to policy adoptions. There is compelling evidence that these entities do not optimize in at all the fashion that mainstream economics assumes. Rather, they limit decision-making to solving problems of much smaller dimensionality. We consider how political economy goes awry when ignoring diminished dimensionality, and some research avenues opened up by this realization.
    Keywords: political economy, policy advice, problem complexity, dimensionality
    JEL: D6 B41 H42 H11
    Date: 2014–08–06
  9. By: Susan Ariel Aaronson (Department of Economics/Institute for International Economic Policy, George Washington University); M. Rodwan Abouharb (University London College)
    Abstract: The WTO says nothing about corruption. This paper uses qualitative and quantitative analysis to examine whether the GATT/WTO, without deliberate intent, helps nations improve governance and fight corruption. Under GATT/WTO rules, policymakers are obligated to act in an evenhanded manner, to facilitate transparent trade-related policymaking and to provide due process to such policymaking by allowing individuals to comment on and challenge trade related regulations before they are adopted. Evenhandedness, access to information, and due process are anticorruption counterweights. We hypothesized that we would see both qualitative and quantitative evidence of improvement in these government metrics among developing country WTO members, especially during the accession process. However, that is not what we found; instead our data shows members gradually improve governance.
    Date: 2014–07
  10. By: Tomoya Nakamura
    Abstract: This study analyzes one-leader and multiple-follower Stackelberg games with demand uncertainty. We demonstrate that the weight on public information regarding a follower's estimation of demand uncertainty determines the strategic relationship between the leader and each follower. When the relationship is strategic complement, the leader can exit from a market. The threshold is determined by the intensity of Cournot competition among the followers.
    Date: 2014–07

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