nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2014‒11‒28
fourteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Voting on contributions to a threshold public goods game: An experimental investigation By Feige, Christian; Ehrhart, Karl-Martin; Krämer, Jan
  2. Turnout Across Democracies By Helios Herrera; Massimo Morelli; Salvatore Nunnari
  3. Optimal mechanisms for the control of fiscal deficits By Grüner, Hans Peter
  4. A Model of Influence Based on Aggregation Function By Michel Grabisch; Agnieszka Rusinowska
  5. A Concise Axiomatization of a Shapley-type Value for Stochastic Coalition Processes By Ulrich Faigle; Michel Grabisch
  6. Happy Voters By Liberini, Federica; Redoano, Michela; Proto, Eugenio
  7. Why Do Members of Congress Support Agricultural Protection? By Bellemare, Marc F.; Carnes, Nicholas
  8. An allocation rule for dynamic random network formation processes By Jean-François Caulier; Michel Grabisch; Agnieszka Rusinowska
  9. Anonymous social influence By Manuel Foerster; Michel Grabisch; Agnieszka Rusinowska
  10. Heterogeneous Preferences and In-Kind Redistribution By Luna Bellani; Francesco Scervini
  11. Voting for burden sharing rules in public goods games By Gallier, Carlo; Kesternich, Martin; Sturm, Bodo
  12. The Rhetoric of Closed Borders: Quotas, Lax Enforcement and Illegal Migration By Facchini, Giovanni; Testa, Cecilia
  13. Compliant sinners, obstinate saints: How power and self-focus determine the effectiveness of social influences in ethical decision making By Marko Pitesa; Stefan Thau
  14. Expectation Formation and Social Influence By Andreas Karpf

  1. By: Feige, Christian; Ehrhart, Karl-Martin; Krämer, Jan
    Abstract: We introduce a binding unanimous voting rule to a public goods game with an uncertain threshold for the total group contribution. In a laboratory experiment we find that voting generates significantly higher total contributions than making individual voluntary contributions to the public good. Heterogeneity with regard to marginal costs of contribution makes coordination on the threshold value somewhat more di cult when voting, but apparently facilitates coordination when not voting. Homogeneous non-voting groups instead exhibit a breakdown of contributions commonly observed in linear public goods games, but unusual for a threshold setting. We also notice a preference for payoff symmetry over maximization of expected welfare in heterogeneous voting groups, which to a lesser extent also appears in nonvoting groups. Using a top-down rule, i.e., splitting the voting process into two separate votes on 1) total contribution and 2) individual contributions does not affect these results.
    Keywords: public good,threshold uncertainty,experimental economics,unanimous voting,committee,heterogeneity
    JEL: C92 D71 H41
    Date: 2014
  2. By: Helios Herrera; Massimo Morelli; Salvatore Nunnari
    Abstract: World democracies widely differ in electoral rules, as well as in legislative, executive or legal institutions. Different institutional environments induce different mappings from electoral outcomes to the distribution of power. We explore how these mappings affect voters' participation to an election. We show that the effect of such institutional differences on turnout depends on the distribution of voters' preferences for the competing parties. In particular, we uncover a novel contest effect: given the distribution of preferences, turnout increases and then decreases when we move from a more proportional to a less proportional system; turnout is maximized for an intermediate degree of proportionality. Moreover, we generalize the competition effect, common to models of endogenous turnout: given the institutional environment, turnout increases in the ex-ante closeness of the election and peaks when the population is evenly split between the two parties. These results are robust to a wide range of modeling approaches, including ethical voter models, voter mobilization models, and rational voter models.
    JEL: D02 D72
    Date: 2014–09
  3. By: Grüner, Hans Peter
    Abstract: This paper shows that a simple two-stage voting mechanism may implement a constrained optimal state dependent decision about a fiscal deficit. I consider a setup with strategic fiscal deficits à la Tabellini and Alesina (1990). Three groups of voters are informed about the productivity of current public spending. Voters differ in their preferences for public goods and swing voters’ preferences may change over time. The current government decides on the current spending mix and it has an incentive to strategically overspend. Under certain conditions, a simple two-stage mechanism in which a deficit requires the approval by a supermajority in parliament implements a constrained optimal decision. When the current majority is small, bargaining between political parties may further increase social welfare. However, when the current majority is large, a supermajority mechanism with bargaining leads to a biased spending mix and reduces welfare whereas the laissez faire mechanism may yield the first best. An appropriately adjusted majority threshold can deal with this problem. JEL Classification: D82, H62
    Keywords: constitutional choice, fiscal policy rules, mechanism design
    Date: 2014–08
  4. 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
  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: Liberini, Federica (ETH Zurich); Redoano, Michela (University of Warwick); Proto, Eugenio (University of Warwick)
    Abstract: Motivated by recent interest and initiatives taken by several governments and international organizations to come up with indicators of well-being to inform policy makers, we test if subjective well-being measures (SWB) can be employed to study voting behaviour. Controlling for financial and economic circumstances, we find that when citizens are more satisfied with their life, they are also more likely to cast their vote in favor of the ruling party. We address the possible concern of reverse causality in the relationship between SWB and political support by (i) analysing the political behaviour of a sample of ideologically neutral voters, and (ii) by identifying the effect of SWB on voting intentions in individuals' response to an exogenous shock of (un)happiness (i.e. the death of husband or wife). We conclude that SWB explains voting decisions, even when the event affecting well-being is beyond government's control.
    Keywords: subjective well-being, happiness, retrospective voting
    JEL: H11 H2 H77 H87 D7 N12
    Date: 2014–09
  7. By: Bellemare, Marc F.; Carnes, Nicholas
    Abstract: It seems paradoxical that until recently, developed countries have continued subsidizing agriculture even though their agricultural sectors had been declining in relative importance since the middle of the 20th century. What drives support for agricultural protection—the broad array of subsidies to farmers and taxes and quotas imposed on agricultural imports—in developed countries? We answer this question by testing three competing hypotheses about what drives support for agricultural protection in the US: (i) legislator preferences, (ii) electoral incentives, or (iii) lobbying. Using data on the roll call votes of the members of the 106th through the 110th Congresses (1999-2009) and the scores given to each legislator by the Farm Bureau, our findings suggest electoral incentives explain a great deal of the variation in support for agricultural protection, but that legislator preferences and lobbying might play a role, too. Moreover, legislator preferences and electoral incentives appear to be substitutes for one another. Why does Congress support agricultural protection? Because many members have electoral incentives to—and because many of those who do not still have other personal or strategic interests at stake.
    Keywords: Agricultural Policy, Agricultural Protection, Farm Bill, Congress, Voting, Lobbying, Agricultural and Food Policy, Political Economy, Q18, D72,
    Date: 2013–07–23
  8. By: Jean-François Caulier (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne); 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: Most allocation rules for network games presented in the literature assume that the network structure is fixed. We put explicit emphasis on the construction of networks and examine the dynamic formation of networks whose evolution across time periods is stochastic. Time-series of networks are studied that describe processes of network formation where links may appear or disappear at any period. Moreover, convergence to an efficient network is not necessarily prescribed. Transitions from one network to another are random and yield a Markov chain. We propose the link-based allocation rule for such dynamic random network formation processes and provide its axiomatic characterization. By considering a monotone game and a particular (natural) network formation process we recover the link-based flexible network allocation rule of Jackson.
    Keywords: Dynamic networks; network game; link-based allocation rule; Markov chain; characterization
    Date: 2013–08
  9. By: Manuel Foerster (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain (UCL) - Belgique); 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: We study a stochastic model of influence where agents have "yes" or "no" inclinations on some issue, and opinions may change due to mutual influence among the agents. Each agent independently aggregates the opinions of the other agents and possibly herself. We study influence processes modeled by ordered weighted averaging operators, which are anonymous: they only depend on how many agents share an opinion. For instance, this allows to study situations where the influence process is based on majorities, which are not covered by the classical approach of weighted averaging aggregation. We find a necessary and sufficient condition for convergence to consensus and characterize outcomes where the society ends up polarized. Our results can also be used to understand more general situations, where ordered weighted averages are only used to some extent. Furthermore, we apply our results to fuzzy linguistic quantifiers, i.e., expressions like "most" or "at least a few".
    Keywords: Influence; Anonymity; Ordered weighted averaging operator; Convergence; Consensus; Fuzzy linguistic quantifier
    Date: 2013
  10. By: Luna Bellani (Department of Economics, University of Konstanz, Germany); Francesco Scervini (ESOMAS, University of Turin, Italy)
    Abstract: This paper examines the impact of social heterogeneity on in-kind redistribution. We contribute to the previous literature in two ways: we consider i) the provision of several public goods and ii) agents different not only in income, but also in their preferences over the various goods provided by the public sector. In this setting, both the distribution and size of goods provision depend on the heterogeneity of preferences. Our main result is that preference heterogeneity tends to decrease in-kind redistribution, while income inequality tends to increase it. An empirical investigation based on United States Census Bureau data confirms these theoretical findings.
    Keywords: Heterogeneous preferences, in-kind redistribution, voting, social distance, local public budgets
    JEL: D31 D72 H42 H70
    Date: 2014–11–13
  11. By: Gallier, Carlo; Kesternich, Martin; Sturm, Bodo
    Abstract: In this experiment, we endogenize the choice of which contribution scheme is implemented in a public goods game. We investigate three rule-based contribution schemes. In a first step, players agree on a common group provision level using the principle of the smallest common denominator. Subsequently, this group investment is allocated according to a specific rule to individual minimum contributions. The game is implemented either as a Single- or a Multi-Phase Game. In the Single-Phase Game, the contribution schemes are exogenously implemented. In the Multi-Phase Game, we let subjects vote on the rule-based contribution schemes. If a scheme obtains a sufficient majority it is implemented. In case no sufficient majority is reached, subjects have to make their contributions to the public good using the voluntary contribution mechanism (VCM). Our results suggest that the endogenous choice of a contribution scheme has an impact on the level of contributions. In case of a rule-based contribution scheme which equalizes payoffs, contributions are higher if subjects choose the scheme than in case the scheme is implemented exogenously. In contrast, contributions are higher if the VCM is implemented exogenously than in case a sufficient majority cannot be obtained and, therefore, subjects have to play the VCM.
    Keywords: public goods,endogenous institutions,minimum contribution rules,cooperation
    JEL: C72 C92 H41
    Date: 2014
  12. By: Facchini, Giovanni (University of Nottingham); Testa, Cecilia (Royal Holloway, University of London)
    Abstract: This paper studies why illegal immigration is widespread. We develop a political agency model in which a politician decides on an immigration target and its enforcement, facing uncertainty on the supply of migrants. Illegal immigration can arise for two reasons: the policy maker may be unable to enforce the target because supply is higher than expected; alternatively, he may underinvest in enforcement because of electoral concerns, and this occurs only when the incumbent and the majority of voters have different preferences over immigration. Empirical evidence provides strong support for our predictions, highlighting how electoral concerns shape illegal immigration flows.
    Keywords: illegal immigration, immigration policy, political economy
    JEL: F22 J61
    Date: 2014–09
  13. By: Marko Pitesa (GEM - Grenoble Ecole de Management - Grenoble École de Management (GEM)); Stefan Thau (LBS - London Business School - London Business School)
    Abstract: In this research, we examine when and why organizational environments influence how employees respond to moral issues. Past research proposed that social influences in organizations affect employees' ethical decision making, but did not explain when and why some individuals are affected by the organizational environment and some disregard it. To address this problem, we drew on research on power to propose that power makes people more self-focused, which, in turn, makes them more likely to act upon their preferences and ignore (un)ethical social influences. Using both experimental and field methods, we tested our model across the three main paradigms of social influence: informational influence (Study 1 and 2), normative influence (Study 3), and compliance (Study 4). Results offer converging evidence for our theory.
    Keywords: ethical decision making, power, social influences, self-focus
    Date: 2013–06–03
  14. By: Andreas Karpf (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: This article investigate the role of social influence for the expectation formation of economic agents. Using self-organizing Kohonen maps the repeated cross-section data set of the University of Michigan consumer survey is transformed into a pseudo panel allowing to monitor the expectation formation of cohorts with regard to business confidence over the whole available time span (January 1978 - June 2013). Subsequently the information theoretic concept of transfer entropy is used to reveal the role of social influence on the expectation formation as well as the underlying network structure. It is shown that social influence strongly depends on socio-demographic characteristics and also coincides with a high degree of connectivity. The social network estimated in this way follows a power-law and thus exhibits similar structure as networks observed in other contexts.
    Keywords: Social networks; expectations; household survey
    Date: 2014–02

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