nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2014‒11‒12
twelve papers chosen by
Stan C. Weeber, McNeese State University

  1. Gender Quotas and Women’s Political Leadership By O'Brien, Diana C.; Rickne, Johanna
  2. Reference Dependence and Politicians' Credibility By Edoardo Grillo
  3. Lobbying (Strategically Appointed) Bureaucrats By Marco M. Sorge
  4. Do political protests matter? Evidence from the Tea Party movement By Stan Veuger; Daniel Shoag; Andreas Madestam; David Yanagizawa-Drott
  5. Conditioning on What? Heterogeneous Contributions and Conditional Cooperation By Björn Hartig; Bernd Irlenbusch; Felix Kölle
  6. Consensus vs. Conformity in Mixed-Motive Games By Michael Naef; Alessandro Sontuoso
  7. Independent directors: less informed, but better selected? New evidence from a two-way director-firm fixed effect model By Sandra Cavaco; Patricia Crifo; Antoine Rebérioux; Gwenaël Roudaut
  8. Can co-creation lead to better strategy? An exploratory research By Koen Tackx; Paul Verdin
  9. Inter-Ethnic Hostility and Mobility of Political Power: Changing Influences of Perceived Horizontal Inequalities By Mikami, Satoru
  10. Internal Hierarchy and Stable Coalition Structures By Massimo Morelli; In-Uck Park
  11. Cooperation in traffic routing games on scale free wireless networks By Dávid Csercsik
  12. Ability Dispersion and Team Performance By Sander Hoogendoorn; Simon C. Parker; Mirjam van Praag

  1. By: O'Brien, Diana C. (Indiana University); Rickne, Johanna (Research Institute of Industrial Economics (IFN))
    Abstract: Though more than 100 countries have adopted gender quotas, the impacts of these reforms on women’s political leadership remain largely unknown. We exploit a quasi-experiment – a zipper quota imposed by the Swedish Social Democratic national party on municipal party groups – to examine quotas’ effect on women’s selection and survival as leaders within their parties. We find that those municipalities where the quota had a larger impact became more likely to appoint female leaders, but not more likely to support the reelection of women to the post. Extending this analysis, we show that the quota increased the number of qualified female candidates without increasing the diversity among women within the group. These results lend support to the notion that quotas may have an acceleration effect on women’s representation in leadership posts and help dispel the myth that quotas trade short-term gains in women’s descriptive representation for long-term exclusion from political power.
    Keywords: Gender quotas; Political leadership; Party leaders; Political careers; Electoral reforms; Women and politics; Subnational politics
    JEL: G34 G38 J20 J48
    Date: 2014–10–15
  2. By: Edoardo Grillo
    Abstract: We consider a model of electoral competition in which two politicians compete to get elected. Each politician is characterized by a valence, which is unobservable to voters and can take one of two values: high or low. The electorate prefers politicians with high valence, but random shocks may lead to the victory of low-valence ones. Candidates make statements concerning their valence. We show that if voters are standard expected utility maximizers, politicians' statements lack any credibility and no information transmission takes place. By introducing reference-dependent preferences and loss aversion a là Koszegi and Rabin, we show that full revelation is possible. Indeed, if the electorate believes to candidates' announcements, such announcements will affect its reference point. As a result, if voters find out that a candidate lied, pretending to be high valence when she is not, they may decide to support the opponent in order to avoid the loss associated with appointing a candidate worse than expected.
    JEL: D03 D72 D82
    Date: 2014
  3. By: Marco M. Sorge (Università di Napoli Federico II and CSEF)
    Abstract: When are strategic appointments useful in curbing policy bias from ex-post negotiation between state agencies and special interest groups? Bertelli and Feldmann (Jnl. of Public Admin. Research and Theory, 2007) provide an insightful analysis of the issue within a full information model of presidential appointments. This paper examines whether and how their findings extend to a world of policy uncertainty and asymmetric information, which rationalizes delegation in the first place. We establish that the existence of non-zero impact of lobbying crucially relies on interest groups' leverage over the appointment game between higher-level institutions. Remarkably, bureaucratic lobbying may prove highly non-neutral with separated powers even when a candidate agency is agreed upon. In some circumstances (e.g., recess appointments in the U.S.), by contrast, strategic appointments fully offset interest group influence in either form of government (unified versus divided), a finding in line with the conventional theory of delegation.
    Keywords: Legislative delegation; Strategic appointments; Bureaucratic lobbying
    JEL: D72 D73 H1
    Date: 2014–11–01
  4. By: Stan Veuger (American Enterprise Institute); Daniel Shoag (American Enterprise Institute); Andreas Madestam (American Enterprise Institute); David Yanagizawa-Drott (American Enterprise Institute)
    Abstract: Can protests cause political change, or are they merely symptoms of underlying shifts in policy preferences?
    Keywords: Protests, Tea Party movement, AEI Economic Policy Working Paper Series
    JEL: A
    Date: 2012–12
  5. By: Björn Hartig (Royal Holloway, University of London, Department of Economics); Bernd Irlenbusch (University of Cologne, Department of Corporate Development and Business Ethics); Felix Kölle (University of Nottingham, School of Economics)
    Abstract: We experimentally investigate how different information about others’ individual contributions affects conditional cooperators’ willingness to cooperate in a one-shot linear public goods game. We find that when information about individual contributions is provided, contributions are generally higher than when only average information is available. This effect is particularly strong when others’ individual contributions are relatively homogeneous. When both types of information are provided, this effect is moderated. In the case of individual feedback we find the willingness to contribute to be higher the lower the variation in others' contributions, but with pronounced heterogeneity in individuals’ reactions. While the majority of conditional cooperators’ are mainly guided by others’ average contributions, more people follow the bad example of a low contributor than the good example of a high contributor. Overall, we provide evidence that information (and lack thereof) about others’ individual contributions affects conditional cooperators’ willingness to cooperate in systematic ways.
    Keywords: Conditional cooperation; Information; Heterogeneity; Public goods
  6. By: Michael Naef; Alessandro Sontuoso (Philosophy, Politics and Economics, University of Pennsylvania)
    Abstract: A correlation between second-order beliefs and strategies – in social dilemmas – has been interpreted as evidence of guilt aversion (Charness and Dufwenberg [2006]). Ellingsen et al. [2010] hypothesize that such correlation might rather be due to consensus effects. Here we propose an additional explanation, conformity, which involves a similar belief-behavior correlation and we set out to tell these motivations apart by proposing a design such that: (i) we reduce the scope for guilt aversion by eliciting and transmitting beliefs about the behavior of other participants in the same role; (ii) we disentangle consensus from conformity by providing an exogenous variation in collective beliefs. The data show that consensus is present (and predominant) but is not the only force driving the belief-behavior correlation. In fact, we also observe “self-servingly conformist” behavior in that subjects choose to match their strategy to the transmitted information when it is in their interest to do so.
    Keywords: conformist preferences, consensus effects, guilt aversion, social norms, trust, experiment
    JEL: C72 C91
    Date: 2014–10
  7. By: Sandra Cavaco; Patricia Crifo; Antoine Rebérioux; Gwenaël Roudaut
    Abstract: This paper develops a two-way director-firm fixed effect model to study the relationship between independent directors’ individual heterogeneity and firm operating performance, using French data. This strategy allows considering and differentiating in a unified empirical framework mechanisms related to board functioning and to director selection. We first show that the independence status, netted out unobservable individual heterogeneity, is negatively related to performance. This result suggests that independent board members experience an informational gap compared to other affiliated members. However, we show that industry-specific expertise as well as informal connections inside the boardroom may help to bridge this gap. Finally, we provide evidence that independent directors have higher intrinsic ability as compared to affiliated board members, consistent with a reputation-based selection process.
    Keywords: independent director heterogeneity, information asymmetry, director selection, firm performance, two-way fixed effect model,
    JEL: G30 G34
    Date: 2014–09–01
  8. By: Koen Tackx; Paul Verdin
    Abstract: In this article, we propose co-creation as a more efficient and effective way of formulating and implementing strategy. We rely on the foundations of procedural justice theory which states that when a decision making process is considered as “fair”, people to whom the process is applied demonstrate a higher level of trust and commitment. A fair process implies that people can voice their opinion and feel part of a group. These two requirements are often not considered enough in “traditional” strategy processes. We identify co-creation as a tool to address the fair process requirements of being heard and belong to a community. Taking these requirements into account will improve both the strategy formulation (e.g. because more and better ideas are generated) and the strategy implementation (e.g. because of a larger buy-in of middle management). Using an exploratory co-creation research setting we explored to what extent corporations are actually following fair process principles in their strategy creation process and what is their appetite for strategy co-creation. From this test, it appeared that major concerns exist with respect to the current strategy creation process and a strong desire to introduce co-creation principles and techniques in that process. Finally, we propose a conceptual model explaining how fair process can be applied through co-creation and lead to improved strategy selection and implementation. As such, we aim to contribute to the analyses of the drivers, the potential and the application of an “open strategy” approach.
    Keywords: Procedural Justice; Fair Process; Strategy Creation; Strategy Implementation; Co-creation.
    Date: 2014–11–03
  9. By: Mikami, Satoru
    Abstract: The purpose of this paper is to illuminate the origins of inter-ethnic hostility, which need to be addressed if the centripetalism institutions are to function properly. Using intention of ethnic voting as an indicator of inter-group discrimination, this paper tests several classic hypotheses adapted from social psychology based on the surveys conducted in 14 urban areas from six sub-Saharan African countries. Results show, among others, that horizontal inequalities, when perceived either advantageously or disadvantageously, actually increase the level of inter-group hostility, but that the malicious effect is context-dependent: a greedy tendency in terms of socio-economic group inequality is limited to non-minorities; minorities who think their own group is superior to others economically do not have stronger hostility towards others compared to those who do not see any socio-economic gap; perceived horizontal inequalities matter chiefly in the countries without any kind of political power mobility; hostility between groups is not associated with perceived horizontal inequalities in countries where experience of power sharing or change of government has convinced people that political change is not impossible.
    Keywords: Horizontal inequalities , Ethnic voting , Centripetalism , Sub-Saharan Arica , Inter-group discrimination
    Date: 2014–03–14
  10. By: Massimo Morelli; In-Uck Park
    Abstract: In deciding whether to join a coalition or not, an agent must consider both i) the expected power of the coalition and ii) her position in the vertical structure within the coalition. We establish the existence of a positive relationship between the degree of inequality in remuneration across ranks within coalitions and the number of coalitions to be formed endogenously in stable systems. An inherent feature of such coalitions is that they are mixed and balanced, rather than segregated, in terms of members abilities. When the surplus of a coalition is assumed to be linear in its relative power conditional on its size, we also establish the existence of stable systems and characterise them fully: a system is stable if and only if all coalitions are of an ecient size and every agent is paid her marginal contribution. (JEL Codes: C71, D71) Keywords: Stable systems, Abilities, Hierarchy, Cyclic partition.
    Date: 2014
  11. By: Dávid Csercsik (Game Theory Research Group, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and Pázmány Péter Catholic University)
    Abstract: Local routing protocols in scale free networks have been extensively studied. In this paper we consider a wireless contextualization of this routing problem and analyze on the one hand how cooperation affects network efficiency, and on the other hand the stability of cooperation structures. Cooperation is interpreted as local exchange of topological information between cooperating agents, and the payoff of a certain node is defined based on its energy consumption during the routing process. We show that if the payoff of the nodes is the energy saving compared to the all-singleton case, basically coalitions are not stable. We introduce coalitional load balancing and net reward to enhance coalitional stability and thus the more efficient operation of the network. As in the proposed model cooperation strongly affects routing dynamics of the network, externalities will arise and the game is defined in a partition function form.
    Keywords: partition function form games, networks, local routing
    JEL: C71 L14 L96
    Date: 2014–06
  12. By: Sander Hoogendoorn (CPB Netherlands Bureau for Economic Policy Analysis, the Netherlands); Simon C. Parker (Ivey Business School, Western University, London, Canada); Mirjam van Praag (Copenhagen Business School, Denmark)
    Abstract: What is the effect of dispersed levels of cognitive ability of members of a (business) team on their team’s performance? This paper reports the results of a field experiment in which 573 students in 49 teams start up and manage real companies under identical circumstances. We ensured exogenous variation in — otherwise random — team composition by assigning students to teams based on their measured cognitive abilities (Raven test). Each team performs a variety of tasks, often involving complex decision making. The key result of the experiment is that the performance of business teams first increases and then decreases with ability dispersion. We seek to understand this finding by developing a model in which team members of different ability levels form sub-teams with other team members with similar ability levels to specialize in different productive tasks. Diversity spreads production over different tasks in order to escape diminishing marginal returns under specialization. The model comes with a boundary condition: our experimental finding is most likely to emerge in settings where different tasks exhibit moderate differences in their productive contributions to total output.
    Keywords: Ability dispersion, team performance, field experiment, entrepreneurship
    JEL: C93 D83 J24 L25 L26 M13 M54
    Date: 2014–05–06

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