nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2015‒03‒22
sixteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Policy Polarization and Strategic Candidacy in Elections under the Alternative Vote Rule. By Arnaud Dellis; Mandar Oak; Alexandre Gauthier-Belzile
  2. Social interactions in voting behavior: distinguishing between strategic voting and the bandwagon effect By Evrenk, Haldun; Sher, Chien-Yuan
  3. Providing global public goods: Electoral delegation and cooperation By Martin G. Kocher; Fangfang Tan; Jing Yu
  4. Voting by conforminy By Bernardo Moreno; María del Pino Ramos-Sosa
  5. Targeted Campaign Competition, Loyal Voters, and Supermajorities By Pierre C. Boyer; Kai A. Konrad
  6. XX Knesset Elections: What these parties stand for, really? By Konstantin Yanovskiy; Ilia Zatcovetsky; Asya Entov
  7. Does direct democracy foster efficient policies? An experimental investigation of costly initiatives By Seebauer, Michael
  8. Making Democracy Work: The Effects of Social Capital and Elections on Public Goods in China By Nancy Qian
  9. Resolving intertemporal conflicts: Economics vs. Politics By Antony Millner; Geoffrey Heal
  10. Turnout and polarization under alternative electoral systems By Konstantinos Matakos; Orestis Troumpounis; Dimitrios Xefteris
  11. Abused rebels and winning coalitions: Regime change under the pressure of rebellions By Apolte, Thomas
  12. Power Distance Beliefs and Attributions for Group Performance By Goncalo,Jack; Kandathil, George
  13. Local advertising externalities and cooperation in one manufacturer-two retailers channel with exogenous marginal profits By Dridi, Dhouha; Ben Youssef, Slim
  14. Formal and Real Power in General Equilibrium By Hans Gersbach; Hans Haller
  15. Reciprocal Climate Negotiators By Nyborg, Karine
  16. Thr Group All-Pay Auction with Heterogeneous Impact Functions By Subhasish M. Chowdhury; Iryna Topolyan

  1. By: Arnaud Dellis (Universite Laval and CIRPEE); Mandar Oak (School of Economics, University of Adelaide); Alexandre Gauthier-Belzile (Universite Laval and CIRPEE)
    Abstract: We use the citizen-candidate model to study electoral outcomes under the Alternative Vote rule, a voting method often proposed as a replacement to the prevalent Plurality rule. We show that, like the Plurality rule, the Alternative Vote rule deters multiple candidate clusters and the presence of candidates at more than two positions. Moreover, the Alternative Vote rule tends to support less policy polarization than the Plurality rule. These results stand in contrast to those obtained under other proposed voting rules, Approval Voting in particular, which are prone to candidate clustering and, as a result, can support greater policy polarization vis-Ã -vis the Plurality rule.
    Keywords: Alternative Vote rule; Instant Runoff Voting; Citizen-candidate model; Endogenous candidacy; policy polarization
    JEL: C72 D72 D78
    Date: 2015–02
  2. By: Evrenk, Haldun; Sher, Chien-Yuan
    Abstract: Prior studies of strategic voting in multi-party elections potentially overestimate the extent of it by counting erroneously votes cast under different motivations as strategic votes. We propose a method that corrects some of this overestimation by distinguishing between strategic voting (voting for a candidate other than the most preferred one to reduce the likelihood of an election victory by a third candidate that is disliked even more) and the votes cast under the ‘bandwagon effect’ (voting for the expected winner instead of the most preferred party to conform to the majority or to be on the winning side). Our method follows from the observation that a vote cannot be strategic unless the voter believes that it will affect the outcome of the election with a non-zero probability, while a vote cast under the bandwagon effect requires no such belief. Employing survey data that include the respondent’s assessment of the importance of his vote, we illustrate this method by estimating the extent of strategic voting in the 2005 UK general election. The estimated extent of strategic voting (4.22%) is strictly less than self-reported strategic voting (6.94%), but the discrepancy cannot be attributed in a statistically significant way to the bandwagon effect, suggesting that motivations other than those identified in the literature may be at work.
    Keywords: voting behavior, social interactions, strategic voting, bandwagon effects, multi-party competition.
    JEL: D71 D72 D84
    Date: 2015–01–01
  3. By: Martin G. Kocher; Fangfang Tan; Jing Yu
    Abstract: This paper experimentally examines the effect of electoral delegation on providing global public goods shared by several groups. Each group elects a delegate who can freely decide on each group member’s contribution to the global public good. Our results show that people mostly vote for delegates who assign equal contributions for every group member. However, in contrast to standard theoretical predictions, unequal contributions across groups drive cooperation down over time, and it decreases efficiency by almost 50% compared to the selfish benchmark. This pattern is not driven by delegates trying to exploit their fellow group members, as indicated by theory – quite to the opposite, other-regarding preferences and a re-election incentives guarantee that delegates assign equal contributions for all group members. It is driven by conditional cooperation of delegates across groups. Since the source of the resulting inefficiency is the polycentric nature of global public goods provision together with other-regarding preferences, we use the term P-inefficiency to describe our finding.
    Keywords: Global Public Goods, Delegation, Cooperation, Experiment
    JEL: C92 D72 H41
    Date: 2014–07
  4. By: Bernardo Moreno (Department of Economic Theory, Universidad de Málaga); María del Pino Ramos-Sosa (Department of Economic Theory, Universidad de Málaga)
    Abstract: A group of agents has to decide whether to accept or reject a proposal. Agents vote in favor or against the proposal and, if the number of agents in favor is greater to certain quota, the proposal is accepted. The \textit{socially optimal decision} is the one adopted when all agents vote truthfully. Conformist agents vote based not only on their opinion but also on the vote of other agents. Independent agents only care about their opinion. If all agents are conformists and vote simultaneously, for any quota there are undominated Nash equilibria where the socially optimal decision is not obtained. Next, we provide the number of independents needed for the socially optimal decision to be obtained in any equilibria. It depends on the total number of agents, the quota and the conformity measure. If agents vote sequentially, the socially optimal decision is obtained in any subgame perfect Nash equilibrium.
    Keywords: Basque-Elections; Conformity; Voting; Independent agents
    JEL: D71
    Date: 2015–03
  5. By: Pierre C. Boyer; Kai A. Konrad
    Abstract: We consider a two-candidate campaign competition in majoritarian systems with many voters. Some voters are loyal, some can be influenced by campaign spending. Own loyalty with respect to a candidate is the voter's private information. Candidates simultaneously choose their campaign budgets and how to allocate them among the voters. We show that a candidate who has a group of loyal voters wins with a higher probability, but chooses the same expected budget size as the rival candidate. The equilibrium distributions of campaign spending target all voters equally in expectation, but target some voters more than others ex post.
    Keywords: Campaign competition, vote buying, supermajorities, targeting, flexible budgets, asymmetric information.
    JEL: D72 D78 D82
    Date: 2014–08
  6. By: Konstantin Yanovskiy (Gaidar Institute for Economic Policy); Ilia Zatcovetsky (Samuel Neaman Institute for Advanced Studies in Science and Technology); Asya Entov (Ariel University of Samaria)
    Abstract: In the paper we provide short review of the main Israeli parties' positions on the key issues. The set of "key issues" is our choice and contains Judicial (legal system) reform, Judea and Samaria status, 2nd amendment right and self-defense, Taxation / spending etc. We provide formal classification of Left and Right parties to test the following hypotheses. Rightist parties' position are less stable and less consistent. The positions' analysis provide some evidences of higher consistency of Leftists' parties position in the Israel and poor ability of Right parties to keep promises. This phenomena explained by general factors (Universal Suffrage gradually pushes voter to the Lefts) and local factors. Real power of elected, accountable bodies in the Israel is significantly less and power of self-reproducing court system, public media and governmental bureaucracy higher than in majority old democracies.
    Keywords: political platform, consistent position, Right-Left cleavages, pure public goods
    JEL: D72 D73
    Date: 2014
  7. By: Seebauer, Michael
    Abstract: This study investigates the effects of the provision of costly initiatives on policy efficiency in a laboratory experiment where a policy setter implements a status quo affecting the utility of the constituency. I vary treatments regarding the political institution (either purely representative or direct democracy where the status quo may be contested by the costly proposal of an alternative) and the appointment of the policy setter (either random or by election). In accordance to theoretical predictions, the experimental data reveal a substantial indirect effect of direct democracy inducing higher efficiency levels by serving as a credible threat towards the policy setter without actually being used. Moreover, the initiative impedes excessive candidate competition during elections reducing campaign costs and thus increasing overall efficiency. In contrast to theoretical predictions, the initiative is actually employed frequently, so there is also a sizeable direct effect of the initiative. However, this effect is generally overcompensated by the costs induced by the process.
    Keywords: Direct Democracy,Policy Decision,Efficiency,Laboratory Experiment
    JEL: D72 D61 C92
    Date: 2015
  8. By: Nancy Qian (Yale University)
    Abstract: This study investigates the extent to which pre-existing social (civic) capital interacts with village elections in determining government provision of local public goods. We collect a unique survey to document the presence of voluntary and social organizations and the history of electoral reforms in China. We exploit the staggered timing in the introduction of elections to estimate the interaction eect of the introduction of village elections and social capital on government-provided public goods. The results show that social capital signicantly enhances the eect of elections. We rule out alternative explanations and provide suggestive evidence for the mechanisms driving our results.
    Date: 2014
  9. By: Antony Millner; Geoffrey Heal
    Abstract: Intertemporal conflicts occur when a group of agents with heterogeneous time preferences must make a collective decision about how to manage a common asset. How should this be done? We examine two methods – an `Economics’ approach that seeks to implement efficient allocations, and a `Politics’ approach in which agents vote over consumption plans. We compare these methods by varying two characteristics of the problem: are agents’ preferences known or are they hidden information, and can they commit to intertemporal collective plans or not? We show that if commitment is possible the Economics approach always Pareto dominates the Politics approach, in both full and hidden information scenarios. By contrast, without commitment the group may be better off if the Politics approach is adopted. We investigate when Politics trumps Economics analytically, and then apply our model to a survey of economists’ views on the appropriate pure rate of time preference for project appraisal. For a wide range of model parameters, and under both full and hidden information, the Politics approach is supported by a majority of agents, and leads to higher group welfare.
    Date: 2014–11
  10. By: Konstantinos Matakos; Orestis Troumpounis; Dimitrios Xefteris
    Abstract: We present a formal model of electoral competition where parties' platforms are endogenously chosen and depend on the degree of the electoral rule disproportionality. We first show that proportional electoral systems generate centrifugal forces that increase candidate differentiation. This in turn implies that more proportional systems are associated with lower levels of abstention from indifference. This two step theoretical prediction of the effect of electoral systems on turnout is then empirically validated even when we jointly control for the prevailing pivotality and party-system size hypotheses. Thus, our work highlights an additional link in the proportionality-turnout nexus.
    JEL: C23 C26 D02 D72
    Date: 2014
  11. By: Apolte, Thomas
    Abstract: We hypothesize that, in certain regime types, winning coalitions have an incentive for helping a deprived population solving the collective action problem that may otherwise restrain them in revolting against an incumbent. Recent selectorate literature holds that members of a winning coalition may find themselves in a loyalty trap after having realized a bad character of an incumbent. According to our hypothesis, the winning coalition's members can find a way out of the loyalty trap by influencing expectations within the population in a way as to spark a public rebellion. A thus induced rebellion raises the chance of each of the winning coalition's members for preserving their position in a newly formed winning coalition following a regime change. Hence, the very regime structure that makes a loyalty trap more probably is identical to a regime structure under which we should expect a higher vulnerability to public rebellions.
    JEL: D02 D74 H11
    Date: 2015
  12. By: Goncalo,Jack; Kandathil, George
    Abstract: We investigated how power distance beliefs shape attributions for group performance. Considerable research suggests that attributions for group performance may be focused either on (1) the contributions made by each individual member of the group or (2) the group as a whole. Yet to date there is no research to address whether or why people from different cultures might focus their attention on one type of attribution over the other. This gap is critical because different types of attributions for past group performance have been shown to influence subsequent group performance. In this paper, we develop a theory in which power distance beliefs are associated with a tendency to favor attributions focused on the individual over attributions focused on the group as a whole when explaining the causes of a collective outcome. The results of a scenario study conducted in both the United States and in India provided support for this prediction. This tendency is robust and holds when controlling for country of origin as well as perceptions of group performance, group member competence and group cohesion. We conclude by discussing the implications of our findings for attribution theory and for the management of teams in high power distance cultures.
  13. By: Dridi, Dhouha; Ben Youssef, Slim
    Abstract: Game theory is a relevant and powerful tool for analyzing strategic interactions in a supply chain in which the decision of each player affect the payoff of other players. In order to relax the classical two supply chain members’ situation to a three supply chain members’ situation and to integrate the problem of competition at retail level, we consider a supply chain consisting of a monopolistic manufacturer and two duopolistic retailers. The latter two are geographically related. Our paper examines the optimal decisions on advertising (local, national and cooperative advertising) in a centralized and a decentralized supply chain using Stackelberg – Cournot game, Stackelberg - Collusion game and Cooperative games, and we investigate the impact of the existing of competition at retail level, the retailer coalition and the cooperation between all supply chain members’ on the channel members’ optimal decisions, on the sales volume and on the profits. Applying the equilibrium analysis and using numerical example, comparing results indicates that all advertising, the sales volume of each member and the total profit in the centralized decision-making are larger than those in the decentralized decision-making. Retailer coalition harms themselves (in terms of profit) despite the increasing of sales, but is beneficial to the manufacturer. We identify also the feasible solutions of the best cooperative advertising scheme that members are interesting in cooperation.
    Keywords: Game theory; Cooperative advertising; Supply chain coordination; Retail competition, retail coalition
    JEL: C7 M3
    Date: 2015–03–08
  14. By: Hans Gersbach (ETH Zurich, Switzerland); Hans Haller (Virginia Polytechnic Institute)
    Abstract: We integrate individual power in groups into general equilibrium models with endogenous group formation. We distinguish between formal power (the say in group decisions) and real power (utility gain from being in groups). Their values will be determined as part of the equilibrium. We find that higher formal power does not necessarily translate into higher equilibrium utility or higher real power. One reason is that induced price changes may offset the groupmember’s increased influence. A second reason is that the group may dissolve when a group member gains too much influence, because other members can exercise the option to leave. We also show that maximal real power can be compatible with Pareto efficiency. We further identify circumstances when changes of formal power in one group do not impact on other groups. Finally, we establish existence of competitive equilibria, including equilibria where some individual enjoys real power.
    Keywords: Group formation, competitive markets, power, exit
    JEL: D41 D50 D60
    Date: 2015–03
  15. By: Nyborg, Karine (University of Oslo)
    Abstract: International climate negotiations have been troubled by mutual mistrust. At the same time, a hope seems to prevail that once enough countries moved forward, others would follow suit. If the abatement game faced by climate negotiators is a Prisoners' Dilemma, and countries are narrowly self-interested, such a hope seems unfounded. However, if countries display reciprocity – a preference to repay meanness by meanness and kindness by kindness – their willingness to abate will be conditional on others' abatement. I show that a full or majority coalition can be stable. This requires, however, that a majority of countries have relatively strong reciprocity preferences. No coalition participation is always stable. In addition, a stable minority coalition may exist; if so, it is weakly larger than the maximum stable coalition with standard preferences, but is characterized by mutually negative sentiments.
    Keywords: international environmental agreements, reciprocity, coalitions
    JEL: F53 H87 Q54
    Date: 2015–02
  16. By: Subhasish M. Chowdhury (University of East Anglia); Iryna Topolyan (University of Cincinnati)
    Abstract: We analyze a group all-pay auction with a group specific public good prize in which one group follows a weakest-link and the other group follows a best-shot impact function. This type of game depicts situations in which the best-shot group is an attacker and the other group is a defender. We show that when the per-capita valuations are equal across groups, there exists a continuum of mixed strategy equilibria in which both groups randomize continuously without a gap over the same interval whose lower bound is zero. There are two further types of equilibria with discontinuous strategies. For the first type, each player in the best-shot group puts mass at the upper bound of the support whereas each player in the other group puts mass at the lower bound of the support. For the second type, players in the best-shot group put masses at both the lower and the upper bounds, while the other group randomizes without an atom. If players in the best-shot group could coordinate on the mass they put at the upper bound of the support, they would want to make it as large as possible (within the relevant range).
    Date: 2015–03

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