nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2014‒11‒07
fifteen papers chosen by
Stan C. Weeber, McNeese State University

  1. What do you know about your mayor? Voters’ information and jurisdiction size By Nicolas GAVOILLE; Jean-Michel JOSSELIN; Fabio PADOVANO
  2. Contractually stable networks By Jean-François Caulier; A. Mauleon; Vincent Vannetelbosch
  3. Measuring Power and Satisfaction in Societies with Opinion Leaders By René Van Den Brink; Agnieszka Rusinowska; Frank Steffen
  4. Scoring Rules over Subsets of Alternatives: Consistency and Paradoxes By Eric Kamwa; Vincent Merlin
  5. Shareholder Voting and Merger Returns By Henning, Laura Sophie; Oesch, David
  6. Capital Cities, Conflict, and Misgovernance: Theory and Evidence By Filipe R. Campante; Quoc-Anh Do; Bernardo Guimaraes
  7. Income Redistribution and the Diversity of Consumer Goods By Paul Maarek; Renaud Bourlès; Michael T.Dorsch
  8. Tax Policy under the “Generational Election System” By Doi, Takero
  9. The Micro-Foundation of Party Competition and Issue Ownership: The Reciprocal Effects of Citizens' Issue Salience and Party Attachments By Anja Neundorf; James Adams
  10. Higher-order Risk Preferences in Social Settings - An Experimental Analysis By Timo Heinrich; Thomas Mayrhofer
  11. Correlation in the Multiplayer Electronic Mail Game By Peter A. Coles; Ran I. Shorrer
  12. Aspiration Models of Committee Decision Making By Bernard GROFMAN; Joseph GODFREY
  13. Petro Populism By Egil Matsen; Gisle J. Natvik; Ragnar Torvik
  14. The core of games on ordered structures and graphs By Michel Grabisch
  15. An Experimental Study of Persuasion Bias and Social Influence in Networks By Jordi Brandts; Ayça Ebru Giritligil; Roberto A. Weber

  1. By: Nicolas GAVOILLE (CREM-CNRS and Condorcet Center, University of Rennes 1, France); Jean-Michel JOSSELIN (CREM-CNRS and Condorcet Center, University of Rennes 1, France); Fabio PADOVANO (CREM-CNRS and Condorcet Center, University of Rennes 1, France, Department of Political Sciences, University Roma Tre, Italy)
    Abstract: This paper examines which set of informations voters use when they cast their vote. On the one hand, electoral accountability models assume that voters rely on past policy decisions of the incumbent politician. Gathering this information is, however, often costly. On the other hand, voters may prefer to rely on low-cost information, such as politicians’ personal observable characteristics. If incentives to collect costly information decrease as the size of the jurisdiction increases, a greater share of voters should take these “information shortcuts” in larger municipalities. To test those hypotheses, we use an original dataset encompassing 896 French municipalities of more than 10,000 inhabitants over the period 2000-2012. We find that although there is no correlation between mayors’ competence and their observable characteristics, voters rely on such information shortcuts. Mayors’ past policy-making matters only in small municipalities.
    Keywords: Political leaders, political selection, voters, French municipalities, jurisdiction size
    JEL: H11 D72 H72
    Date: 2014–06
  2. By: Jean-François Caulier (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); A. Mauleon (CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain (UCL) - Belgique); Vincent Vannetelbosch (CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain (UCL) - Belgique)
    Abstract: We develop a theoretical framework that allows us to study which bilateral links and coalition structures are going to emerge at equilibrium. We define the notion of coalitional network to represent a network and a coalition structure, where the network speciÖes the nature of the relationship each individual has with his coalition members and with individuals outside his coalition. To predict the coalitional networks that are going to emerge at equilibrium we propose the concept of contractual stability which requires that any change made to the coalitional network needs the consent of both the deviating players and their original coalition partners. We show that there always exists a contractually stable coalitional network under the simple majority decision rule and the component-wise egalitarian or majoritarian allocation rules. Moreover, requiring the consent of group members may help to reconcile stability and e¢ ciency.
    Keywords: Networks ; Coalition Structures ; Contractual Stability ; Allocation Rules Networks ; Strong efficiency
    Date: 2013
  3. By: René Van Den Brink (Department of Econometrics and Tinbergen Institute - VU University); 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); Frank Steffen (University of Liverpool Management School (ULMS) - University of Liverpool Management School)
    Abstract: Opinion leaders are actors who have some power over their followers as they are able to influence their followers' choice of action in certain instances. In van den Brink et al. (2011) we proposed a two-action model for societies with opinion leaders. We introduced a power and a satisfaction score and studied some common properties. In this paper we strengthen two of these properties and present two further properties, which allows us to axiomatize both scores for the case that followers require unanimous action inclinations of their opinion leaders to follow them independently from their own action inclinations.
    Keywords: Collective choice ; follower ; opinion leader ; power ; satisfaction ; axiomatization
    Date: 2013
  4. By: Eric Kamwa (CREM UMR CNRS 6211, University of Caen Basse Normandie, France); Vincent Merlin (CREM UMR CNRS 6211, University of Caen Basse Normandie, France)
    Abstract: We know since the works of Gehrlein and Fishburn (1980, 1981), Fishburn (1981) and Saari (1987, 1988, 1990) that, the collective rankings of scoring rules are not stable when some alternatives are dropped from the set of alternatives. However, in the literature, attention has been mainly devoted to the relationship between pairwise majority vote and scoring rules rankings. In this paper, we focus on the relationships between four-candidate and three-candidate rankings. More precisely, given a collective ranking over a set of four candidates, we determine under the impartial culture condition, the probability of each of the six possible rankings to occur when one candidate is dropped. As a consequence, we derive from our computations, the likelihood of two paradoxes of committee elections, the Leaving Member paradox (Staring, 1986) and of the Prior Successor Paradox which occur when an elected candidate steps down from a two-member committee.
    Keywords: Scoring rule, Consistency, Collective Ranking, Committee, Paradox, Impartial Culture
    JEL: D70 D71
    Date: 2014–09
  5. By: Henning, Laura Sophie; Oesch, David
    Abstract: Using a sample of 384 shareholder meetings, we investigate whether shareholder votes on mergers and acquisitions in both target and acquirer firms relate to the announcement day abnormal returns and whether the voting outcome has implications for the short- and long-run merger performance. We find that shareholder voting dissent is negatively related to both abnormal returns upon merger announcement and recommendations by Institutional Shareholder Services (ISS). The former relationship is stronger for target firms and only borderline significant for acquirer firms. Overall, shareholders seem to take both advisor opinions and market beliefs into account when taking their voting decision. We also find that cumulative abnormal returns on the meeting date are strongly positively related to voting dissent. The observed relationship holds only for mergers with a long negotiation period suggesting that in these mergers a higher fraction of residual uncertainty is re-solved upon a “pass” vote. Furthermore, we find that voting dissent is negatively related to long-run abnormal merger performance suggesting a predictive power of merger votes.
    Keywords: Shareholder voting; Mergers and acquisitions; Proxy advisors; Merger perfor-mance
    JEL: G14 G34
  6. By: Filipe R. Campante (Harvard University); Quoc-Anh Do (Département d'économie); Bernardo Guimaraes (Sao Paulo School of Economics)
    Abstract: We investigate the links between capital cities, conict, and the quality of governance, starting from the assumption that incumbent elites are constrained by the threat of insurrection, and that this threat is rendered less e_ective by distance from the seat of political power. We develop a model that delivers two key predictions: (i) conict is more likely to emerge (and to dislodge incumbents) closer to the capital, and (ii) isolated capital cities are associated with misgovernance. We show evidence that both patterns hold true robustly in the data, as do other ancillary predictions from the model.
    Keywords: Capital Cities; Governance; Institutions; Conflict; Civil War; Revolutions; Insurgencies; Population Concentration; Democracy; Power Sharing; Inefficient Institutions
    JEL: D02 D74 O18 R12
    Date: 2014–10
  7. By: Paul Maarek; Renaud Bourlès; Michael T.Dorsch (Université de Cergy-Pontoise, THEMA; Ecole Centrale Marseille, CNRS & EHESS; Central European University)
    Abstract: Reductions in the generosity of welfare benefits and less progressive taxation have decreased the redistributive impact of fiscal policy since the mid-1990’s across the advanced democracies. We argue that the strong increase in the diversity of goods observed those last decades may have modified preferences for redistribution differently across groups in society and affected the political equilibrium tax rate. We show that if the share of diversified goods compared to that of basic (necessary) goods in the consumption bundle sufficiently increases with income, relatively rich consumers could disproportionately benefit from an increase in the diversity of goods. Consequently we show in a probabilistic voting model that this could lead to a decrease in the equilibrium tax rate. We then empirically demonstrate, using fixed effect regressions over a a panel of OECD countries, that there exists a strong correlation between our proxies for the diversity of goods and our proxies for the degree of fiscal redistribution.
    Keywords: Redistribution, Diversity of goods, Taxation, Probabilistic voting
    JEL: D72 D78 H24
    Date: 2014
  8. By: Doi, Takero
    Abstract: This chapter investigates the effects of introducing the “generational election system” proposed by Ihori and Doi (1998). The generational election system (or the election district by generation) consists of election districts divided by not only region but also generation. In industrial countries, intergenerational conflicts of interest are large at present. In particular, the older generation has more political power because of aging and fewer children. In an electoral system that consists of election districts divided only by region, conflicts of interest among regions can be dealt with in the Congress, but intergenerational conflicts are buried in each district because the opinions of older people dominate those of younger people. Therefore, this chapter analyzes the effects of introducing the generational election system using an overlapping generations model. The results of the voting equilibrium show that the preferred policy of the younger generation can be better represented in the generational election system compared with the current majoritarian system. Furthermore, the selected policy does not depend on the turnout rate of the younger generation. These results suggest that introducing the generational election system benefits both the younger and future generations.
    JEL: H20 D72 H31
    Date: 2014–09
  9. By: Anja Neundorf; James Adams
    Abstract: While previous research on the reciprocal effects of citizens' issue attitudes and their party support emphasize citizens' issue positions, political competition revolves equally around issue salience, i.e., debates over which issue areas political parties should prioritize. Using multi-wave panel data from Germany and Great Britain, we analyze the reciprocal effects of citizens' issue salience and their party support over the period 1984-2009, and we conclude that citizens' issue priorities both influence and are influenced by their party attachments, and, moreover, that these effects are linked to parties' long-term policy emphases as articulated in their election manifestos. This effect is strongest among supporters of a small issue-orientated niche party, the Greens.
    Date: 2014
  10. By: Timo Heinrich; Thomas Mayrhofer
    Abstract: We study higher-order risk preferences, i.e. prudence and temperance, next to risk aversion in social settings. Previous experimental studies have shown that higher-order risk preferences affect the choices of individuals deciding privately on lotteries that only affect their own pay-off. Yet, most risky and financially relevant decisions in the field are made in the social settings of households or organizations. We aim to narrow the gap between laboratory and field evidence by creating a more realistic decision making environment in the laboratory that allows us to identify the influence of different social settings under controlled conditions. We elicit higher-order risk preferences of individuals and systematic ally vary how an individual’s decision is made (alone or while communicating with a partner) and who is affected by the decision (only the individual or the partner as well). In doing so, we can isolate the effects of other-regarding concerns and communication on choices. We observe that individuals become more risk-averse when the partner is able to communicate with the decision maker. However, we do not observe an influence of social settings on prudence and temperance. Our results reveal that the majority of choices are risk-averse, prudent, and temperate across social settings.
    Keywords: Experiment; individual decisions; group decisions; risk aversion; prudence; temperance
    JEL: C91 C92 D70 D81
    Date: 2014–10
  11. By: Peter A. Coles; Ran I. Shorrer
    Abstract: In variants of the Electronic Mail Game (Rubinstein, 1989) where two or more players communicate via multiple channels, the multiple channels can facilitate collective action via redundancy, the sending of the same message along multiple paths or else repeatedly along the same path (Chwe, 1995 and De Jaegher, 2011). This paper offers another explanation for how multiple channels may permit collective action: parties may be able to coordinate their actions when messages' arrivals at their destinations are sufficiently correlated events. Correlation serves to fill in information gaps that arise when players are uncertain of the source of message failure, effectively strengthening messages from one player. This asymmetry in message strength in turn permits cutoff equilibria, where players take action after receiving a minimum number of confirmations.
  12. By: Bernard GROFMAN (Center for the Study of Democracy and Institute for Mathematical Behavioral Sciences, University of California, Irvine); Joseph GODFREY (WinSet Group, LLC)
    Date: 2014–05
  13. By: Egil Matsen; Gisle J. Natvik; Ragnar Torvik
    Abstract: We aim to explain petro populism - the excessive use of oil revenues to buy political support. To reap the full gains of natural resource income politicians need to remain in office over time. Hence, even a rent-seeking incumbent who prioritizes his own welfare above that of citizens, will want to provide voters with goods and services if it promotes his probability of remaining in office. While this incentive benefits citizens under the rule of rent-seekers, it also has the adverse effect of motivating benevolent policymakers to short-term overprovision of goods and services. In equilibrium politicians of all types indulge in excessive resource extraction, while voters reward policies they realize cannot be sustained over time.
    Keywords: resource curse, political economy
    JEL: D72 O13 Q33
    Date: 2014
  14. 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)
    Abstract: In cooperative games, the core is the most popular solution concept, and its properties are well known. In the classical setting of cooperative games, it is generally assumed that all coalitions can form, i.e., they are all feasible. In many situations, this assumption is too strong and one has to deal with some unfeasible coalitions. Defining a game on a subcollection of the power set of the set of players has many implications on the mathematical structure of the core, depending on the precise structure of the subcollection of feasible coalitions. Many authors have contributed to this topic, and we give a unified view of these different results.
    Keywords: TU-game; Solution concept; Core; Feasible coalition; Communication graph; Partially ordered set
    Date: 2013
  15. By: Jordi Brandts (Institutd'AnalisiEconomica(CSIC); Barcelona GSE); Ayça Ebru Giritligil (Murat Sertel Center for Advanced Economic Studies; İstanbul Bilgi University); Roberto A. Weber (Department of Economics, University of Zurich)
    Abstract: In many areas of social life individuals receive information about a particular issue of interest from multiple sources. When these sources are connected through a network then proper aggregation of this information by an individual involves taking into account the structure of this network. The inability to aggregate properly may lead to various types of distortions. In our experiment a number of agents all want to find out the value of a particular parameter unknown to all. Agents receive private signals about the parameter and agents can communicate their estimates of the parameter repeatedly through a network, the structure of which is known by all players. We present results from experiments with four different networks. We find that the information of agents who have more outgoing links in a network gets more weight in the information aggregation of the other agents than it optimally should. Our results are consistent with the model of “persuasion bias” of De Marzo et al. (2003) and at odds with an alternative heuristic according to which the most influential agents are those with more incoming links.
    Date: 2014–10

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