nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2014‒12‒03
ten papers chosen by
Stan C. Weeber, McNeese State University

  1. A Consensual Committee Using Approval Balloting By Subiza, Begoña; Peris, Josep E.
  2. Solving the Inverse Power Problem in Two-Tier Voting Settings By Matthias Weber
  3. Trust and Manipulation in Social Networks By Manuel Förster; Ana Mauleon; Vincent Vannetelbosch
  4. Immigration, Cultural Distance and Natives' Attitudes Towards Immigrants: Evidence from Swiss Voting Results By Brunner, Beatrice; Kuhn, Andreas
  5. Get Rid of Unanimity: The Superiority of Majority Rule with Veto Power By Laurent Bouton; Aniol Llorente-Saguer; Frédéric Malherbe
  6. Autonomous coalitions By Stéphane Gonzalez; Michel Grabisch
  7. India's Electronic Voting Machines (EVMs): Social construction of a "frugal" innovation By Herstatt, Maximilian; Herstatt, Cornelius
  8. Institution Formation and Cooperation with Heterogeneous Agents By Kube, Sebastian; Schaube, Sebastian; Schildberg-Hörisch, Hannah; Khachatryan, Elina
  9. Decision Making Among Heterogeneous Members: A Study on Economic Efficiency under the Centralized Structure of Chinese Farmer Professional Cooperatives By Ma, Meilin; Zhu, Heng
  10. Global Risks and Collective Action Failures: What Can the International Community Do? By Inci Otker-Robe

  1. By: Subiza, Begoña (Universidad de Alicante, Departamento de Métodos Cuantitativos y Teoría Económica); Peris, Josep E. (Universidad de Alicante, Departamento de Métodos Cuantitativos y Teoría Económica)
    Abstract: A new voting rule for electing committees is described. Specifically, we use approval balloting and propose a voting procedure guaranteeing that if a committee representing (in a determined proportion) all voters exists, then the selected committee has to represent all voters at least in the same proportion. This condition is a generalization of the unanimity property and the usual voting procedures in this context do not satisfy it.
    Keywords: Approval balloting; committee election; unanimity; consensus
    JEL: D71 D72
    Date: 2014–11–14
  2. By: Matthias Weber (CREED, University of Amsterdam)
    Abstract: There are many situations in which different groups make collective decisions by committee voting, where each group is represented by a single person. Theoretical concepts suggest how the voting systems in such committees should be designed, but these abstract rules can usually not be implemented perfectly. To find voting systems that approximate these rules the so called inverse power problem needs to be solved. I introduce a new method to address this problem in two-tier voting settings using the coefficient of variation. This method can easily be applied to a wide variety of settings and rules. After deriving the new method, I illustrate why it is to be preferred over more traditional methods.
    Keywords: inverse power problem, indirect voting power, two-tier voting, Penrose’s Square Root Rule
    JEL: D71 D72
    Date: 2014–02–10
  3. By: Manuel Förster (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); Ana Mauleon (CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain (UCL) - Belgique, CEREC - Université Saint-Louis - Bruxelles); Vincent Vannetelbosch (CORE - Center of Operation Research and Econometrics [Louvain] - Université Catholique de Louvain (UCL) - Belgique, CEREC - Université Saint-Louis - Bruxelles)
    Abstract: We investigate the role of manipulation in a model of opinion formation where agents have opinions about some common question of interest. Agents repeatedly communicate with their neighbors in the social network, can exert some effort to manipulate the trust of others, and update their opinions taking weighted averages of neighbors' opinions. The incentives to manipulate are given by the agents' preferences. We show that manipulation can modify the trust structure and lead to a connected society, and thus, make the society reaching a consensus. Manipulation fosters opinion leadership, but the manipulated agent may even gain influence on the long-run opinions. In sufficiently homophilic societies, manipulation accelerates (slows down) convergence if it decreases (increases) homophily. Finally, we investigate the tension between information aggregation and spread of misinformation. We find that if the ability of the manipulating agent is weak and the agents underselling (overselling) their information gain (lose) overall influence, then manipulation reduces misinformation and agents converge jointly to more accurate opinions about some underlying true state.
    Keywords: Social networks; trust; manipulation; opinion leadership; consensus; wisdom of crowds
    Date: 2013–09
  4. By: Brunner, Beatrice (Zurich University of Applied Sciences (ZHAW)); Kuhn, Andreas (Swiss Federal Institute for Vocational Education and Training)
    Abstract: We combine community-level outcomes of 27 votes about immigration issues in Switzerland with census data to estimate the effect of immigration on natives' attitudes towards immigration. We apply an instrumental variable approach to take potentially endogenous locational choices into account, and we categorize immigrants into two groups according to the cultural values and beliefs of their source country to understand how the cultural distance between natives and immigrants affects this relationship. We find that the share of culturally different immigrants is a significant and sizable determinant of anti-immigration votes, while the presence of culturally similar immigrants does not affect natives' voting behavior at all in most specifications. The cultural distance between immigrant and native residents thus appears crucial in explaining the causal effect of immigration on natives' attitudes towards immigration, and we argue that the differential impact is mainly driven by natives' concerns about compositional amenities. We finally show that the elasticity of the share of right-wing votes in favor of the Swiss People's Party is much more elastic with respect to the share of culturally different immigrants than natives' attitudes themselves, suggesting that the party has disproportionally gained from changes in attitudes caused by immigrant inflows.
    Keywords: instrumental variable, endogenous residential choice, cultural distance, cultural values and beliefs, voting behavior, attitudes towards immigration, immigration, rightwing votes
    JEL: D72 F22 J15 J61 R23
    Date: 2014–08
  5. By: Laurent Bouton; Aniol Llorente-Saguer; Frédéric Malherbe
    Abstract: A group of agents wants to reform the status quo if and only if this is Pareto improving. Agents have private information and may have common or private objectives, which creates a tension between information aggregation and minority protection. We analyze a simple voting system - majority rule with veto power (Veto) - that essentially resolves this tension, for it combines the advantageous properties of both majority and unanimity rules. We argue that our results shed new light on the evolution of voting rules in the EU institutions and could help to inform debates about policy reforms in cases such as juries in the US.
    JEL: D70
    Date: 2014–08
  6. By: Stéphane Gonzalez (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); 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: We consider in this paper solutions for TU-games where it is not assumed that the grand coalition is necessarily the final state of cooperation. Partitions of the grand coalition, or balanced collections together with a system of balancing weights interpreted as a time allocation vector are considered as possible states of cooperation. The former case corresponds to the c-core, while the latter corresponds to the aspiration core or d-core, where in both case, the best configuration (called a maximising collection) is sought. We study maximising collections and characterize them with autonomous coalitions, that is, coalitions for which any solution of the d-core yields a payment for that coalition equal to its worht. In particular we show that the collection of autonomous coalitions is balanced, and that one cannot have at the same time a single possible payment (core element) and a single possible configuration. We also introduce the notion of inescapable coalitions, that is, those present in every maximising collection. We characterize the class of games for which the sets of autonomous coalitions, vital coalitions (in the sense of Shellshear and Sudhölter), and inescapable coalitions coincide, and prove that the set of games having a unique maximising coalition is dense in the set of games.
    Keywords: Cooperative game; core; balancedness; c-core; aspiration core; coalition formation; autonomous coalitions
    Date: 2014–05
  7. By: Herstatt, Maximilian; Herstatt, Cornelius
    Abstract: After the 2009 general elections in India a controversy started about the electronic voting machines (EVM) that are used nationwide since 2004. Political parties, activists, and academics raised suspicion that the machines might have been manipulated to alter the election outcome. There is no proof that EVMs have been manipulated in any of the past elections, however, concerned people claim that the risk is there. This paper takes a closer look at the Indian voting technology and the discussions around alleged security holes. The authors take a closer look at this particular controversy. Additionally we want to provide the reader with information about the Indian electronic voting system more generally. This includes reasons to change from the earlier paper ballot system and design challenges for EVM in the Indian context. We are writing within the frame of a theoretical model called Social Construction of Technology (SCOT), developed by Wiebe Bijker and Trevor Pinch (1987). Along the lines of this model we argue that after the EVM has been adopted in India, different "relevant social groups" interpreted the EVM in diverse ways. From the social constructivist perspective we argue there has been not just one but at least three different EVMs. With time the "interpretative flexibility" diminished and "relevant social groups" more or less agreed on one interpretation of the EVM. The EVM has "stabilized" and the controversy has been closed basically. We show the SCOT model to be helpful for structuring the controversy in a fruitful manner. The research questions adressed here are: How did the ECI and EVM manufacturers react to allegations made by political parties, VeTA, and voting security researchers that EVMs are vulnerable to manipulation? How was the election practice affected?
    Date: 2014
  8. By: Kube, Sebastian (University of Bonn); Schaube, Sebastian (University of Bonn); Schildberg-Hörisch, Hannah (University of Bonn); Khachatryan, Elina (University of Kassel)
    Abstract: Driven by an ever-growing number of studies that explore the effectiveness of institutional mechanisms meant to mitigate cooperation problems, recent years have seen an increasing interest in the endogenous implementation of these institutions. In this paper, we test within a unified framework how the process of institution formation is affected by three key aspects of natural environments: i) heterogeneity among players in the benefits of cooperation, ii) (a)symmetry in players' institutional obligations, and iii) potential trade-offs between efficiency and equality in payoff allocations. We observe social preferences to be limiting the scope for institution formation. Inequality-averse players frequently object to institutions that fail to address differences in players' benefits from cooperation – even if rejecting the institution causes monetary losses to all players. Relating our findings to previous studies on institution formation, we discuss potential advantages and drawbacks of stipulating unanimous support for implementing institutions that foster cooperation.
    Keywords: institution formation, unanimity voting, cooperation problems, heterogeneous agents, inequality aversion
    JEL: C90 D02 D62 D63 H41
    Date: 2014–10
  9. By: Ma, Meilin; Zhu, Heng
    Abstract: Farmer cooperatives are playing an increasingly crucial role in the current reform of the agricultural sector in China. Two features of these organizations have stood out amidst the undergoing, rapid development. One is the highly concentrated decision-making structure, while the other being the high level of member heterogeneity in terms of production capacity and ownership portion. Current literature has few quantitative models for analyzing the effects of governance centralization and member heterogeneity on cooperative economic efficiency. This article focuses on evaluating the efficiency of decisions made under different voting structures when members are highly heterogeneous. We use a net income model for a two-stage investment decision. We find that members with a larger ownership in a Chinese cooperative tend to have better aligned interest with the organization and can make more efficient decisions relative to those with less ownership. When heterogeneity among members is high, a more centralized decision making structure can lead to higher economic efficiency. Additionally, because the optimal level of centralization is determined by the redistribution policy of cooperative profits and properties of member heterogeneity, different cooperatives would accordingly have different optimal degrees of centralization.
    Keywords: Chinese Farmer Professional Cooperatives, Economic efficiency, Centralized decision power, Member heterogeneity, Community/Rural/Urban Development, Industrial Organization, Q13, D71,
    Date: 2014–07
  10. By: Inci Otker-Robe
    Abstract: Abstract What do climate change, global financial crises, pandemics, and fragility and conflict have in common? They are all examples of global risks that can cross geographical and generational boundaries and whose mismanagement can reverse gains in development and jeopardize the well-being of generations. Managing risks such as these becomes a global public good, whose benefits also cross boundaries, providing a rationale for collective action facilitated by the international community. Yet, as many public goods, provision of global public goods suffer from collective action failures that undermine international coordination. This paper discusses the obstacles to addresing these global risks effectively, highlighting their implications for the current juncture. It claims that remaining gaps in information, resources, and capacity hamper accumulation and use of knowledge to triger appropriate action, but diverging national interests remain the key impediment to cooperation and effectiveness of global efforts, even when knowledge on the risks and their consequences are well understood. The paper argues that managing global risks requires a cohesive international community that enables its stakeholders to work collectively around common goals by facilitating sharing of knowledge, devoting resources to capacity building, and protecting the vulnerable. When some countries fail to cooperate, the international community can still forge cooperation, including by realigning incentives and demonstrating benefit from incremental steps toward full cooperation.
    Keywords: Global Financial Stability Risks;Climatic changes;Risk management;Public goods;Resource mobilization;International cooperation;Global risks; Collective action; Climate change; Crises; Pandemics; Globalization
    Date: 2014–10–24

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