nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2015‒06‒20
sixteen papers chosen by
Stan C. Weeber, McNeese State University

  1. The Right Look: Conservative Politicians Look Better and Voters Reward It By Berggren, Niclas; Jordahl, Henrik; Poutvaara, Panu
  2. Electoral cycles in savings bank lending By Englmaier, Florian; Stowasser, Till
  3. Multicandidate Elections: Aggregate Uncertainty in the Laboratory By Laurent Bouton; Micael Castanheira; Aniol Llorente-Saguer
  4. On a preference analysis in a group decision making By Mazurek, Jiří
  5. The Generation Vote and Influential Media Power in Republic of Korea By Jeongeun Ahn
  6. Single-Issue Campaigns and Multidimensional Politics By Georgy Egorov
  7. Campaign Promises as an Imperfect Signal: How does an Extreme Candidate Win against a Moderate Candidate? By Yasushi Asako
  8. Values for Cooperative Games over Graphs and Games With Inadmissible Coalitions By Ziv Hellman; Ron Peretz
  9. Culturally-biased voting in the Eurovision Song Contest: Do national contests differ? By Budzinski, Oliver; Pannicke, Julia
  10. Competing For Loyalty: The Dynamics of Rallying Support By MATIAS IARYCZOWER; SANTIAGO OLIVEROS
  11. Risk Taking and Information Aggregation in Groups By Spiros Bougheas; Jeroen Nieboer; Martin Sefton
  12. Team Incentives and Leadership By Michalis Drouvelis; Daniele Nosenzo; Martin Sefton
  13. Delegation and public pressure in a threshold public goods game: theory and experimental evidence By Doruk Ä°riÅŸ; Jungmin Lee; Alessandro Tavoni
  14. Individual versus Group Play in the Repeated Coordinated Resistance Game By Timothy N. Cason; Vai-Lam Mui
  15. Endogenous information disclosure in experimental oligopolies By David Kopanyi; Anita Kopanyi-Peuker
  16. Saving Face and Group Identity By Tor Eriksson; Lei Mao

  1. By: Berggren, Niclas; Jordahl, Henrik; Poutvaara, Panu
    Abstract: Since good-looking politicians win more votes, a beauty advantage for politicians on the left or on the right is bound to have political consequences. We show that politicians on the right look more beautiful in Europe, the United States and Australia. Our explanation is that beautiful people earn more, which makes them less inclined to support redistribution. Accordingly, our model predicts that voters use beauty as a cue for conservatism when they do not know much about candidates and that politicians on the right benefit more from beauty in low-information elections. Evidence from real and experimental elections confirms both predictions.
    Keywords: Beauty; Elections; Political candidates; Appearance; Ideology; Parties
    JEL: D72 J45 J70
    Date: 2015–06–09
  2. By: Englmaier, Florian; Stowasser, Till
    Abstract: We provide evidence that German savings banks – where local politicians are by law involved in their management – systematically adjust lending policies in response to local electoral cycles. The different timing of county elections across states and the existence of a control group of cooperative banks – that are very similar to savings banks but lack their political connectedness – allow for clean identification of causal effects of county elections on savings banks’ lending. These effects are economically meaningful and robust to various specifications. Moreover, politically induced lending increases in incumbent party entrenchment and in the contestedness of upcoming elections.
    Keywords: Bank lending cycles; political business cycles; political connectedness; public banks; government ownership of firms
    JEL: G21 D72 D73
    Date: 2013–11–29
  3. By: Laurent Bouton (Department of Economics, Georgetown University); Micael Castanheira; Aniol Llorente-Saguer (School of Economics and Finance, Queen Mary, University London)
    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 (arguably unrealistic) assumption: the absence of aggregate uncertainty about the distribution of preferences in the electorate. In this paper, we propose 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: Rational Voter Model, Multicandidate Elections, Plurality, Aggregate Uncertainty, Experiments
    JEL: C92 D70
    Date: 2015–04–16
  4. By: Mazurek, Jiří
    Abstract: The aim of the paper is to provide several quantitative measures concerning preference structure in a group decision making setting. These measures enable to assess group and individual discord, core preferences and outliers, or to find a consensus, where a consensus is defined as a preference with a minimum sum of distances to other preferences. Also, it is shown that a distance of a consensus to a median preference is upper bounded, which might reduce a search for a consensus significantly.
    Keywords: consensus; decision making; distance; discord; geometric median; group decision making; group discord; preference; preference structure.
    JEL: D7 D70
    Date: 2015–06–12
  5. By: Jeongeun Ahn (Ewha Womans University)
    Abstract: The ‘generation’ has had a great effect on general elections since 2002 in South Korea. It is important to generate ‘the generation vote’. The generation has made a ‘generation cleavage’ organize axis that consist of the left of axis called the young and progressive ‘2030(both 20s and 30s)’ and the right of axis called the old and conservative ‘5060(50s and 60s)’. In the meantime, the study of generation vote emphasized that one generation experienced a similar to political experience became one cohort group, having an identical voting behavior in election.After 2002, however, the newly rising 20s has brought generation cleavage to change a new cleavage paradigm since a presidential election in 2007. They have taken a stance midway between conservative and the progressive since 2007. They have gone as far as to turn conservative since 2012. The change of the 20’s generation vote is caused by ‘media literacy’. Media literacy is a competence of communication that enables people to analyze, evaluate, and create messages in a wide of variety media modes. The new rising 20s voters who have higher media literacy than other generations are able to approach a several of political information from a new viewpoint. Therefore, although the new rising 20s voter have different characteristics from other generations, they have shared their political tendency with other generations due to their higher degree of media literacy. In short, this paper would be centrally analyzed the change of the new rising 20s voters who have influence over changing the generation cleavage. Due to the media literacy, the differentiation of an intra-generational cohort such as the voting behavior of the 20s voters makes a new voter group that forms an alliance with other generations. So, It doesn't make the existing political generation cleavages such as 2030 vs. 5060, but the newly political generation cleavages such as 2030 vs. 2050.
    Keywords: generation vote, political voting behavior, media power
  6. By: Georgy Egorov
    Abstract: In most elections, voters care about several issues, but candidates may have to choose only a few to build their campaign on. The information that voters will get about the politician depends on this choice, and it is therefore a strategic one. In this paper, I study a model of elections where voters care about the candidates' competences (or positions) over two issues, e.g., economy and foreign policy, but each candidate may only credibly signal his competence or announce his position on at most one issue. Voters are assumed to get (weakly) better information if the candidates campaign on the same issue rather than on different ones. I show that the first mover will, in equilibrium, set the agenda for both himself and the opponent if campaigning on a different issue is uninformative, but otherwise the other candidate may actually be more likely to choose the other issue. The social (voters') welfare is a non-monotone function of the informativeness of different-issue campaigns, but in any case the voters are better off if candidates are free to pick an issue rather than if an issue is set by exogenous events or by voters. If the first mover is able to reconsider his choice in case the follower picked a different issue, then politicians who are very competent on both issues will switch. If voters have superior information on a politician's credentials on one of the issues, this politician is more likely to campaign on another issue. If voters care about one issue more than the other, the politicians are more likely to campaign on the more important issue. If politicians are able to advertise on both issues, at a cost, then the most competent and well-rounded will do so. This possibility makes voters better informed and better off, but has an ambiguous effect on politicians' utility. The model and the results may help understand endogenous selection of issues in political campaigns and the dynamics of these decisions.
    JEL: D72 D82
    Date: 2015–06
  7. By: Yasushi Asako (School of Political Science and Economics, Waseda University)
    Abstract: This study develops a political competition model in which campaign platforms are partially binding. A candidate who implements a policy that differs from his/her platform must pay a cost of betrayal, which increases with the size of the discrepancy. I also assume that voters are uncertain about candidatespolicy preferences. If voters believe that a candidate is likely to be extreme, there exists a semi-separating equilibrium: an extreme candidate imitates a moderate candidate, with some probability, and approaches the median policy with the remaining probability. Although an extreme candidate will implement a more extreme policy than will a moderate candidate, regardless of imitation or approach, partial pooling ensures that voters prefer an extreme candidate who does not pretend to be moderate over an uncertain candidate who announces an extreme platform. As a result, a moderate candidate never has a higher probability of winning than does an extreme candidate.
    Keywords: electoral competition, voting, campaign promise, signaling game
    JEL: C72 D72 D82
    Date: 2014–09
  8. By: Ziv Hellman (Bar-Ilan University); Ron Peretz (London School of Economics)
    Abstract: We suppose that players in a cooperative game are located within a graph structure, such as a social network or supply route, that limits coalition formation to coalitions along connected subsets within the graph. This in turn leads to a more general study of coalitional games in which there are arbitrary limitations on the collections of coalitions that may be formed. Within this context we define a generalisation of the Shapley value that is studied from an axiomatic perspective. The resulting ‘graph value’ (and ‘S-value’ in the general case) is endogenously asymmetric, with the automorphism group of the graph playing a crucial role in determining the relative values of players.
    Keywords: Shapley value, network games
    JEL: C71 D46 D72
    Date: 2015–04
  9. By: Budzinski, Oliver; Pannicke, Julia
    Abstract: The economic literature on the Eurovision Song Contest (ESC) establishes empirical evidence for culturally-biased voting, more precisely also biases based on geographical closeness, political relations, ethnical and linguistic affinity. The Bundesvision Song Contest (BSC), a similar contest with principally the same rules but organized on the national level in Germany, offers a unique opportunity to compare international voting bias patterns to national voting bias patterns. Thus, this paper presents an innovative analysis by comparatively analyzing the ESC's historical data from 1998 to 2013 and the BSC's data from its beginning in 2005 until 2013 with the same econometric methodology. Our results show that voting biases do not only matter in international contests but also occur in similarly-organized national contests with roughly similar magnitude and quality - despite the cultural background of participants and voters being much more homogenous.
    Keywords: Eurovision Song Contest,Bundesvision Song Contest,culturally-biased voting,media economics,cultural economics
    JEL: L82 Z10
    Date: 2014
    Abstract: We consider a class of dynamic collective action problems in which either a single principal or two competing principals vie for the support of members of a group. We focus on the dynamic problem that emerges when agents negotiate and commit their support to principals sequentially. A danger for the agents in this context is that a principal may be able to succeed by exploiting competition among members of the group. Would agents benefit from introducing competition between opposing principals? We show that when principals’ policies provide value to the agents, competition actually reduces agents’ welfare.
    Date: 2015–06–01
  11. By: Spiros Bougheas (Department of Economics, University of Nottingham.); Jeroen Nieboer (Department of Social Policy, London School of Economics and Political Science); Martin Sefton (Department of Economics, University of Nottingham)
    Abstract: We report a controlled laboratory experiment examining risk-taking and information aggregation in groups facing a common risk. The experiment allows us to examine how subjects respond to new information, in the form of both privately observed signals and signals reported from others. We find that a considerable number of subjects exhibit ‘reverse confirmation bias’: they place less weight on information from others that agrees with their private signal and more weight on conflicting information. We also find a striking degree of consensus when subjects make decisions on behalf of the group under a random dictatorship procedure. Reverse confirmation bias and the incidence of consensus are considerably reduced when group members can share signals but not communicate.
    Keywords: Group behavior; Teams; Decision Making; Risk; Experiment
    Date: 2015–07
  12. By: Michalis Drouvelis (Department of Economics, University of Birmingham.); Daniele Nosenzo (Department of Economics, University of Nottingham.); Martin Sefton (Department of Economics, University of Nottingham.)
    Abstract: We study, experimentally, how two alternative incentive mechanisms affect team performance, and how a team chooses between alternative mechanisms. We study a group incentive mechanism, where team output is shared equally among team members, and a hierarchical mechanism team output is allocated by a team leader. Our experiment examines these mechanisms in both homogeneous teams, where workers have identical productivities and in heterogeneous teams, where workers vary in their productivity. Our results are robust to whether teams are homogeneous or heterogeneous. We find that output is higher when a leader has the power to allocate output, but this mechanism also generates large differences between earnings of leaders and other team members. When team members can choose how much of team output is to be shared equally and how much is to be allocated by a leader, they tend to restrict the leader’s power to distributing less than half of the pie.
    Keywords: Team Production, Leadership, Reward Power, Delegation, Experiment
    Date: 2015–05
  13. By: Doruk Ä°riÅŸ; Jungmin Lee; Alessandro Tavoni
    Abstract: The provision of global public goods, such as climate change mitigation and managing fisheries to avoid overharvesting, requires the coordination of national contributions. The contributions are managed by elected governments who, in turn, are subject to public pressure on the matter. In an experimental setting, we randomly assign subjects into four teams, and ask them to elect a delegate by a secret vote. The elected delegates repeatedly play a one shot public goods game in which the aim is to avoid losses that can ensue if the sum of their contributions falls short of a threshold. Earnings are split evenly among the team members, including the delegate. We find that delegation causes a small reduction in the group contributions. Public pressure, in the form of teammates’ messages to their delegate, has a significant negative effect on contributions, even though the messages are designed to be payoff-inconsequential (i.e., cheap talk). The reason for the latter finding is that delegates tend to focus on the least ambitious suggestion. In other words, they focus on the lower of the two public good contributions preferred by their teammates. This finding is consistent with the prediction of our model.
    Date: 2015–03
  14. By: Timothy N. Cason; Vai-Lam Mui
    Abstract: This paper reports an experiment to evaluate the effectiveness of repeated interactions in deterring leaders’ from using divide-and-conquer strategies to extract surplus from their subordinates, when every decision-maker involved is a group instead of an individual. We find that both the resistance rate by subordinates and the divide-and-conquer transgression rate by leaders are the same in the group and individual repeated coordinated resistance games. Similar to the individual game, adding communication to the group game can help deter opportunistic behavior by the leaders even in the presence of repetition.
    Keywords: Communication, Coordinated Resistance, Divide-and-Conquer, Laboratory experiment, Repeated Games, Group Decision-Making
    Date: 2015–02
  15. By: David Kopanyi (Department of Economics, University of Nottingham); Anita Kopanyi-Peuker (University of Amsterdam)
    Abstract: With this research we examine whether observing firm-specific production levels leads to a less competitive market outcome. We consider an endogenous information setting where firms can freely decide whether they want to share information about their past production levels. By voluntarily sharing information, firms can show their willingness to cooperate.We conduct a laboratory experiment where firms decide only about their production levels first, and the information they receive is exogenous (either no information, or aggregate / disaggregated information about others' production, in varying order). Later, firms can also decide whether to share their past production levels with others. We vary the kind of information firms receive: they receive the shared information either in aggregate or in disaggregated form. Our results show no difference in average total outputs across data aggregation and information settings. However, we observe more collusion when individual information was shared voluntarily. Our results show that subjects use voluntary sharing to show their intentions to cooperate. If they share information, they produce significantly less than if they do not share information.
    Keywords: Cournot competition, information, collusion, experiment
    Date: 2015–11
  16. By: Tor Eriksson (Department of Economics and Business, Aarhus School of Business and Social Sciences, Aarhus University. Fuglesangs Allé 4, 8210 Aarhus V, Denmark); Lei Mao (School of Insurance, Central University of Finance and Economics, Beijing, China)
    Abstract: Are people willing to sacrifice resources to save one’s and others’ face? In a laboratory experiment, we study whether individuals forego resources to avoid the public exposure of the least performer in their group. We show that a majority of individuals are willing to pay to preserve not only their self- but also other group members’ image. This behavior is frequent even in the absence of group identity. When group identity is more salient, individuals help regardless of whether the least performer is an in-group or an out-group. This suggests that saving others’ face is a strong social norm.
    Keywords: Saving face, social image, pro-social behavior, group identity, experiment
    JEL: C92 D03 M52 Z13
    Date: 2015

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