nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2015‒03‒13
fourteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Deliberating Collective Decisions By Chan, Jimmy; Lizzeri, Alessandro; Suen, Wing; Yariv, Leeat
  2. Election and Divisiveness: Theory and Evidence By Elliott Ash; Massimo Morelli; Richard Van Weelden
  3. Polito-Economic Aspects of Renewable Energy: Voting on the Level of Renewable Energy Support By Vladimir Udalov
  4. Multicandidate Elections: Aggregate Uncertainty in the Laboratory By Bouton, Laurent; Castanheira, Micael; Llorente-Saguer, Aniol
  5. Power Distribution in French River Basin Committees By Zaporozhets, Vera
  6. Political Capital in the 21st Century: An Electoral Theory of Going Public and Private By Klingler, Jonathan
  7. A hierarchical network formation model By Atabati, Omid; Farzad, Babak
  8. Doing good with other people’s money: an experiment on people's (un)willingness to grant others the freedom to choose By Fredrik Carlsson; Mitesh Kataria; Elina Lampi; Maria Vittoria Levati
  9. Beyond elite bargains: building democracy from below in Uganda By Sophie King; Sam Hickey
  10. Within-group heterogeneity and group dynamics: Analyzing exit of microcredit groups in Angola By Ivar Kolstad; Armando J. Garcia Pires; Arne Wiig
  11. Cournot Games with Uncertainty: Coalitions, Competition, and Efficiency By Baosen Zhang; Ramesh Johari; Ram Rajagopal
  12. Treasure Hunt: Social Learning in the Field By Markus Mobius; Tuan Phan; Adam Szeidl
  13. Participative Political Institutions and City Development 800Ð1800 By Fabian Wahl
  14. Is Conflict Contagious? Evidence from a Natural Experiment By Benjamin Crost; Joseph H. Felter

  1. By: Chan, Jimmy; Lizzeri, Alessandro; Suen, Wing; Yariv, Leeat
    Abstract: We present a dynamic model of sequential information acquisition by a heterogeneous committee. At each date agents decide whether to vote to adopt one of two alternatives or continue to collect more information. The process stops when a qualified majority vote for an alternative. Three main insights emerge from our analysis and match an array of stylized facts on committee decision making. First, majority rule is more fragile than super-majority rules to impatient committee members. Second, more diverse preferences, more consensual deliberation rules, or more unanimous de- cision voting rules lead to lengthier deliberation and more accurate decisions. Last, balanced committees unanimously prefer to delegate deliberation power to a moderate chairman rather than be governed by a deliberation rule such as unanimity.
    Keywords: collec- tive learning; optimal stopping; sequential likelihood ratio test; swing voters
    JEL: D71 D72 D83
    Date: 2015–03
  2. By: Elliott Ash; Massimo Morelli; Richard Van Weelden
    Abstract: We analyze the effort allocation choices of incumbent politicians when voters are uncertain about politician preferences. There is a pervasive incentive to “posture” by overproviding effort to pursue divisive policies, even if all voters would strictly prefer to have a consensus policy implemented. As such, the desire of politicians to convince voters that their preferences are aligned with the majority of the electorate can lead them to choose strictly pareto dominated effort allocations. Transparency over the politicians’ effort choices can either mitigate or re-enforce the distortions depending on the strength of politicians’ office motivation and the capacity for the holder of the office in question to effect change. When re-election concerns are paramount transparency about effort choices can be bad for both incentivizing politicians to exert effort on socially efficient tasks and for allowing voters to select congruent politicians. We take our theoretical results to the data with an empirical analysis o f how U.S. Congressmen allocate time across issues. Consistent with the theory, we find evidence of political posturing due to elections (among U.S. Senators) and due to higher transparency (among U.S. House Members). Keywords: Posturing, Reputation, Transparency, Effort Allocation, Multi-task. JEL: D72, D78, D82.
    Date: 2015
  3. By: Vladimir Udalov (Europäisches Institut für Internationale Wirtschaftsbeziehungen (EIIW))
    Abstract: This paper investigates an intergenerational conflict arising from renewable energy support (RES). Using a simple polito-economic overlapping generations (OLG) model, it can be shown that old individuals unambiguously lose from renewable energy support and therefore vote for its minimum level. In contrast, young individuals benefit from positive environmental and consumption effects and, therefore, vote for a higher level of renewable energy support. The voting outcome is determined through a political process, whereby political parties converge to platforms that maximize the aggregate welfare of the electorate. Depending on the size of the exogenous parameters, the level of RES varies between the voting preferences of younger and older individuals. As a result, this model offers a good starting point for possible medium to long-term policy recommendations in order to increase the accepted level of RES.
    Keywords: overlapping generations, generational conflict, environmental policy, renewable energy, voting
    JEL: Q54 Q29 D60 D90 H23 D72
    Date: 2014–11
  4. By: Bouton, Laurent; Castanheira, Micael; Llorente-Saguer, Aniol
    Abstract: The rational-voter model is often criticized on the grounds that two of its central predictions (the paradox of voting and Duverger's law) are at odds with reality. Recent theoretical advances suggest that these empirically unsound predictions might be an artifact of an assumption in those models: the absence of aggregate uncertainty about the distribution of preferences in the electorate. In this paper, we propose the first direct empirical evidence of the effect of aggregate uncertainty in multicandidate elections. Adopting a theory-based experimental approach, we explore whether aggregate uncertainty indeed favors the emergence of non-Duverger's law equilibria in plurality elections. Our experimental results support the main theoretical predictions: sincere voting is a predominant strategy under aggregate uncertainty, whereas without aggregate uncertainty, voters massively coordinate their votes behind one candidate, who wins almost surely.
    Keywords: aggregate uncertainty; experiments; multicandidate elections; plurality; rational-voter model
    JEL: C92 D70
    Date: 2015–03
  5. By: Zaporozhets, Vera
    Abstract: I study the distribution of voting power between different decision-makers in French river basin committees over the period 1987-2007. To do so, in the first part of the paper, I apply different power measures traditionally used in the literature as well as some other ones lesser known in this context. I compare then the predictions of several indices for the relative power of different decision-makers in different voting situations. In the second part, I describe the methodology to design an optimal decision rule. A simple computational exercise based on this methodology suggests that the residential water users in Adour-Garonne river basin were under represented in the river basin committee during 1989-2006.
    Keywords: environmental management, water policy, collective decision-making, voting, power indices, optimal decision rule
    Date: 2015–02
  6. By: Klingler, Jonathan
    Abstract: The Bush and Obama administrations have complemented their capacity to make public appeals by creating grassroots lobbying organizations with the explicit purpose of mobilizing supporters to pressure Congress to pass presidential policy priorities. This paper advances the study of organizations like Organizing for Action by considering their ability to make targeted appeals to the primary electorate of the president's party as well as orchestrate indirect mass persuasion campaigns. Furthermore, this paper defines the costs of lobbying in terms of those tactics' electoral costs. I present a model which predicts that targeted appeals will be more common under unified government and that mass persuasion attempts will be less common as the organizational capital of these organizations can be efficiently applied to electoral ends. The model also predicts that public appeals become less common as the time costs and relative electoral productivity of presidential time increase. I find empirical support for these hypotheses in data obtained from emails sent by Organizing for America/Organizing for Action to subscribers since its creation in early 2009 and in presidential primetime addresses made since 1957.
    Date: 2014–12
  7. By: Atabati, Omid; Farzad, Babak
    Abstract: We present a network formation model based on a particularly interesting class of networks in social settings, where individuals' positions are determined according to a topic-based or hierarchical taxonomy. In this game-theoretic model, players are located in the leaves of a complete b-ary tree as the seed network with the objective of minimizing their collective distances to others in the network. In the grid-based model of Even-Dar and Kearns [3], they demonstrate the existence of small diameter networks with the threshold of a = 2 where the cost of a new link depends on the distance between the two endpoints to the power of a. We show the appearance of small diameter equilibrium networks with the threshold of a = 1/4 in the hierarchical or tree-based networks. Moreover, the general set of equilibrium networks in our model are guaranteed to exist and they are pairwise Nash stable with transfers [2].
    Keywords: Network formation; Hierarchical networks; Linking game
    JEL: C79 D85
    Date: 2015–02
  8. By: Fredrik Carlsson (Department of Economics, University of Gothenburg, Sweden); Mitesh Kataria (Department of Economics, University of Gothenburg, Sweden); Elina Lampi (Department of Economics, University of Gothenburg, Sweden); Maria Vittoria Levati (Department of Economics (University of Verona))
    Abstract: We augment a standard allocation experiment to investigate how preferences for an environmental project relate to the willingness to limit others' choices. We ask the allocator to choose his own donation level, a donation level for him and his group, and the minimum donation level for the group members (excluding the allocator). We find that donations dictated to the whole group are, on average, lower than individual donations and that this decrease is consistent with the expectations of what others would like to donate. Moreover, most allocators force the others to donate a positive, though low, amount. Thus, unlimited freedom of choice is rejected by the majority of the subjects.
    Keywords: Allocation decisions; Charitable giving; Social preferences; Freedom of choice
    JEL: C92 D64 D70
    Date: 2015–03
  9. By: Sophie King; Sam Hickey
    Abstract: New theories of how democratic development is likely to emerge within developing countries obscure the effects of popular agency, and of ideas, offering an incomplete view of such historical processes and exaggerating the extent to which a particular sequencing of change is required. Insights from the experiences of non-governmental and cooperative organisations in rural Uganda, an unpromising context for the flourishing of democratic development, suggest that certain strategies can achieve meaningful (if limited) forms of progress, particularly where they focus on challenging power relations, developing synergies between civil and political society, and generating ideas that reshape perceptions of subordinate groups.
    Date: 2015
  10. By: Ivar Kolstad; Armando J. Garcia Pires; Arne Wiig
    Abstract: The effect of within-group heterogeneity on the survival of social groups is theoretically ambiguous. A greater diversity of ideas, experience, and networks can have a positive effect on members’ benefits from group membership, but diversity also creates a potential for conflict. This paper presents an analysis of the exit of microcredit groups, using data from Angola. The results suggest that group fragmentation in terms of social identities, or more specifically religious fractionalization, is associated with a greater probability of group exit. Results for within-group economic inequality suggest, however, that inequality is associated with a decrease in the probability of exit, but at a diminishing rate.
    Keywords: Group dynamics, microcredit, fractionalization, inequality, exit
    Date: 2015
  11. By: Baosen Zhang; Ramesh Johari; Ram Rajagopal
    Abstract: We investigate the impact of group formations on the efficiency of Cournot games where producers face uncertainties. In particular, we study a market model where producers must determine their output before an uncertainty production capacity is realized. In contrast to standard Cournot models, we show that the game is not efficient when there are many small producers. Instead, producers tend to act conservatively to hedge against their risks. We show that in the presence of uncertainty, the game becomes efficient when producers are allowed to take advantage of diversity to form groups of certain sizes. We characterize the trade-off between market power and uncertainty reduction as a function of group size. Namely, we show that when there are N producers present, competition between groups of size square root of N results in equilibria that are socially optimal.
    Date: 2015–03
  12. By: Markus Mobius; Tuan Phan; Adam Szeidl
    Abstract: We seed noisy information to members of a real-world social network to study how information diffusion and information aggregation jointly shape social learning. Our environment features substantial social learning. We show that learning occurs via diffusion which is highly imperfect: signals travel only up to two steps in the conversation network and indirect signals are transmitted noisily. We then compare two theories of information aggregation: a naive model in which people double-count signals that reach them through multiple paths, and a sophisticated model in which people avoid double-counting by tagging the source of information. We show that to distinguish between these models of aggregation, it is critical to explicitly account for imperfect diffusion. When we do so, we find that our data are most consistent with the sophisticated tagged model.
    Date: 2015–03–01
  13. By: Fabian Wahl (University of Hohenheim)
    Abstract: This study investigates the effect of participative political institutions (PPIs) that emerged in many central European cities from the late 13th century. The empirical analysis of the paper is based on newly compiled long-run data for the existence of different types of PPIs in 104 cities in the Holy Roman Empire. The effect of both an overall index of participativeness of political institutions as well as of the individual PPIs is tested empirically. When pooled over all periods and observations, there seems to be a significant positive overall effect of PPIs in the German-speaking area but not in the Low Countries. The study founds considerable spatial and temporal heterogeneity in the effect of PPIs. Furthermore, the effect of different types of PPIs differs substantially and in general seems to be short-lived. That is, the results show that the positive initial effect of some PPIs declined the longer they existed and over time.
    Keywords: Medieval Period, Early-Modern Period, Central Europe, City Development, Political Institutions, Early Democracy, Guilds
    JEL: N44 N94 O10 R11 H11 D72
    Date: 2015–03
  14. By: Benjamin Crost (University of Illinois at Urbana-Champaign); Joseph H. Felter (Stanford University)
    Abstract: The fact that conflicts tend to cluster in space is well documented. It remains unclear, however, whether this clustering is a result of contagion or of unobserved shocks that are correlated across space. We present new evidence for contagion by exploiting a natural experiment that increased the intensity of one conflict but had no direct effect on a second ongoing conflict in the same area. In particular, we analyze a ruling by the Supreme Court of the Philippines, which disallowed a proposed peace treaty with the Moro-Islamic Liberation Front (MILF), a Muslim separatist insurgency, and led to an escalation of conflict with the MILF in provinces with a large Muslim population. Though the ruling had no direct bearing on the conflict with the New People's Army (NPA), a communist guerrilla group, we find that it also led to a substantial increase in conflict with the NPA in the same provinces. We test several mechanisms and conclude that contagion was most likely the result of strategic escalation by the NPA in an attempt to exploit the local weakness of the armed forces.
    Date: 2015–03

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