nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2015‒08‒13
fifteen papers chosen by
Stan C. Weeber
McNeese State University

  1. The influence of collective action on the demand for voluntary climate change mitigation in hypothetical and real situations By Sturm, Bodo; Uehleke, Reinhard
  2. Elections and Divisiveness: Theory and Evidence By Elliott Ash; Massimo Morelli; Richard Van Weelden
  3. Revenue decentralization, central oversight and the political budget cycle: Evidence from Israel By Baskaran, Thushyanthan; Blesse, Sebastian; Brender, Adi; Reingewertz, Yaniv
  4. Lame but loyal ducks By Lopes da Fonseca, Mariana
  5. The symmetric equilibria of symmetric voter participation games with complete information By Nöldeke, Georg; Peña, Jorge
  6. A mechanism to pick the deserving winner By Moskalenko, Anna
  7. Education, Social Mobility, and Talent Mismatch By Yuki Uchida
  8. Political Risk, Information and Corruption Cycles: Evidence from Russian Regions By Oleg Sidorkin; Dmitriy Vorobyev
  9. On the Political Economy of University Admission Standards By De Donder, Philippe; Martinez-Mora, Francisco
  10. Bargaining over Environmental Budgets: A Political Economy Model with Application to French Water Policy By Thomas, Alban; Zaporozhets, Vera
  11. Building Trust in Rural Producer Organizations in Senegal: Results from a Randomized Controlled Trial By Bernard, Tanguy; Frölich, Markus; Landmann, Andreas; Unte, Pia Naima; Viceisza, Angelino; Wouterse, Fleur
  12. Stability in Network Formation Games with Streams of Payoffs: An Experimental Study By Mariya Teteryatnikova; James Tremewan
  13. Institutional Dynamics Under Revenue Volatility and Revenue-Dependent Lobbying Power: A Stochastic Differential Game Approach By Raouf Boucekkine; Fabien Prieur; Benteng Zou
  14. Politics in the interest of capital: A not-so-organized combat By Woll, Cornelia
  15. Clusters and Collective Learning Networks: The Case of the Competitiveness Cluster 'Secure Communicating Solutions' in the French Provence-Alpes-Côte d'Azur Region By Christian Longhi

  1. By: Sturm, Bodo; Uehleke, Reinhard
    Abstract: In this experiment, we investigate determinants of the individual demand for voluntary climate change mitigation. Subjects decide between a cash prize and an allowance from the EU Emissions Trading Scheme for one ton of CO2 that will be deleted afterwards. We vary the incentives of the decision situation in which we distinguish between real monetary incentives and a hypothetical decision situation with and without a cheap talk script. Furthermore, decisions were implemented either as purely individual or as a collective action using majority voting. We observe a significant hypothetical bias in the demand for voluntary climate change mitigation. In case of the individual decision situation this bias is caused solely by subjects with low income. Collective decision making affects demand positively in the hypothetical decision situation only.
    Keywords: demand for voluntary climate change mitigation,public goods,collective action,hypothetical bias
    JEL: Q51 Q54 C93
    Date: 2015
  2. By: Elliott Ash; Massimo Morelli; Richard Van Weelden
    Abstract: This paper analyzes the effort allocation choices of incumbent politicians when voters are uncertain about politician preferences. There is a pervasive incentive to "posture" by over-providing 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 re-enforce the distortions, and for some parameters can be bad both for incentivizing politicians to focus on socially efficient tasks and for allowing voters to select congruent politicians. We take our theoretical results to the data with an empirical analysis of how Members of the U.S. Congress allocate time across issues in their floor speeches. Consistent with the theory, we find evidence of political posturing due to elections among U.S. Senators. We also demonstrate empirically that, among U.S. House Members, increased transparency can lead to more divisive speech.
    JEL: P16
    Date: 2015–07
  3. By: Baskaran, Thushyanthan; Blesse, Sebastian; Brender, Adi; Reingewertz, Yaniv
    Abstract: This paper examines whether revenue decentralization and direct external financial supervision affect the incidence and strength of political budget cycles, using a panel of Israeli municipalities during the period 1999-2009. We find that high dependence on central government transfers - as reflected in a low share of locally raised revenues in the municipality's budget - exacerbates political budget cycles, while tight monitoring - exercised through central government appointment of external accountants to debt accumulating municipalities - eliminates them. These results suggest that political budget cycles can result from fiscal institutions that create soft budget constraints: that is, where incumbents and rational voters can expect that the costs of pre-election expansions will be partly covered later by the central government.
    Keywords: political budget cycles,soft budget constraint,local governments,decentralization
    JEL: D72 H72 H74 E62
    Date: 2015
  4. By: Lopes da Fonseca, Mariana
    Abstract: This paper analyzes the consequences of an electoral reform introducing mayoral term limits at the municipal level in Portugal. Relying on a difference-in-difference methodology and a novel method that accounts for anticipatory effects of reforms, this study explores variation between and within municipalities to capture the economic and political consequences of limiting the number of consecutive mayoral terms. In contrast to the usual lame duck effect in the literature, I find that term limited mayors decrease current expenditure and reduce both user charges and tax rates. Lame ducks send positive fiscal signals possibly in an attempt to maximize the electoral perspectives and re-election probability of their party in the coming elections. Still, political turnover significantly increases as a result of the electoral reform.
    Keywords: reform,politics,incentives
    JEL: D72 H00 H72
    Date: 2015
  5. By: Nöldeke, Georg; Peña, Jorge
    Abstract: We characterize the symmetric Nash equilibria of the symmetric voter participation game with complete information introduced by Palfrey and Rosenthal (1983). Our results confirm their conjecture on the existence, multiplicity, and comparative statics of such equilibria and yield more precise information on how changes in team size affect the location of equilibria.
    Keywords: costly voting; mixed strategy equilibrium; participation games; polynomials in Bernstein form
    JEL: C72 D72
    Date: 2015–07
  6. By: Moskalenko, Anna
    Abstract: A group of individuals is choosing an individual (the winner) among themselves, when the identity of the deserving winner is a common knowledge among individuals. A simple mechanism of voting by veto is proposed as an alternative to the mechanism studied by Amorós (2011). Like Amorós’(2011), the suggested mechanism implements the socially desirable outcome (the deserving winner is chosen) in subgame perfect equilibria. Keywords: Implementation, mechanism design, subgame perfect equilibrium, individuals choosing among themselves, voting by veto. JEL classification: C72, D71, D78
    Keywords: Jocs no-cooperatius (Matemàtica), Elecció social, 33 - Economia,
    Date: 2015
  7. By: Yuki Uchida (Graduate School of Economics, Osaka University)
    Abstract: This study presents a two-class, overlapping-generation model featuring social mobility inhibited by the mismatch of talents. Mobility decreases as the private education gap between the two classes widens, whereas it increases with an increased public education spending. Within this framework, we consider the redistributive politics of public education and show that the private education gap provides the government with an incentive to increase public education. We also show that social mobility reveals a cyclical motion across generations when the political power of the poor is weak.
    Keywords: Social mobility; Public education; Redistribution; Voting
    JEL: H20 I24 J62
    Date: 2015–08
  8. By: Oleg Sidorkin; Dmitriy Vorobyev
    Abstract: Political budget cycles are a well-established phenomenon in which opportunistic politicians systematically adjust public policies prior to elections in order to attract a higher number of votes. We show that corrupt behavior of politicians also follows certain patterns, which are driven by electoral cycles. Based on Business Environment and Enterprise Performance Survey data, exploiting variation in the dates of surveys and in length and starting date of Russian regional governors' terms, we find that corruption levels, as perceived by firms operating in different regions of Russia, increases closer to the expected expiration date of a regional governor's term. We argue that the Russian political system allows governors to accumulate private information about their likelihood of remaining in office for another term. Therefore, they will know well in advance of elections if they continue in the office for the next term. We suggest that the accumulation of such information may serve as an explanation for the observed pattern of perceived corruption: if a governor gradually learns that he is leaving office once the current term has expired he has increasing incentives to engage in corrupt activities in order to accumulate wealth before he is out of the game. We formalize this idea with a simple theoretical model and test it. We find that in regions where incumbent governors are less likely to remain in office for the next term, corruption increases over their terms, while in regions where governors are more likely to remain in office, perceived corruption follows a decreasing trend.
    Keywords: corruption; political budget cycle; Russia;
    JEL: D73 O17 P26
    Date: 2015–05
  9. By: De Donder, Philippe; Martinez-Mora, Francisco
    Abstract: We study the political determination of the proportion of students attending university when access to higher education is rationed by admission tests. Parents differ in income and in the ability of their unique child. They vote over the minimum ability level required to attend public universities, which are tuition-free and financed by proportional income taxation. University graduates become high skilled, while the other children attend vocational school and become low skilled. Even though individual preferences are neither single-peaked nor single-crossing, we obtain a unique majority voting equilibrium, which can be either classical (with 50% of the population attending university) or ends-against- the-middle, with less than 50% attending university (and parents of low and high ability children favoring a smaller university system). The majority chosen university size is smaller than the Pareto efficient level in an ends-against-the-middle equilibrium. Higher income inequality decreases the majority chosen size of the university. A larger positive correlation between parents income and childs ability leads to a larger university populated by a larger fraction of rich students, in line with the so-called participation gap. Our results are robust to the introduction of private schooling alternatives, financed with fees.
    Keywords: majority voting, ends-against-the-middle, non single-peaked preferences, non single-crossing preferences, higher education participation gap, income ability correlation, size of university
    JEL: D72 I22
    Date: 2015–05
  10. By: Thomas, Alban; Zaporozhets, Vera
    Date: 2015–05
  11. By: Bernard, Tanguy (IFPRI, International Food Policy Research Institute); Frölich, Markus (University of Mannheim); Landmann, Andreas (University of Mannheim); Unte, Pia Naima (University of Mannheim); Viceisza, Angelino (Spelman College); Wouterse, Fleur (IFPRI, International Food Policy Research Institute)
    Abstract: Trust is crucial for successful collective action. A prime example is collective commercialization of agricultural produce through producer organizations. We conduct a cluster-randomized controlled trial in rural Senegal in which we vary the number and the type of smallholder farmers – members and/or leaders of local producer organizations – invited to a three-day training on collective commercialization. We use this variation to identify effects on intra-group trust, both direct treatment effects of having participated in the training and spillover effects on farmers who did not partake. Looking at different measures of trust in leaders' competence and motives and of trust in members we find that participating in the training significantly enhances both trust in leaders and trust in members. For trust in leaders, we also find a strong spillover effect. Our findings suggest that relatively soft and non-costly interventions such as a group training appear to be able to positively affect trust within producer organizations.
    Keywords: rural producer organizations, smallholder farmers, trust, Senegal
    JEL: D71 O12 Q13
    Date: 2015–07
  12. By: Mariya Teteryatnikova; James Tremewan
    Abstract: We run a novel network formation experiment with a stream of payos and relatively unstructured link formation process, and test the performance of a number of theoretical stability concepts in this environment. We focus especially on the issue of myopic versus farsighted behaviour in network formation. A subtle treatment variation demonstrates clearly the power of myopic stability concepts in identifying the most stable networks. However, we also nd support for farsighted concepts of stability, especially those that assume players are pessimistic about the eventual outcome of a deviation.
    JEL: A14 C71 C92 D85
    Date: 2015–07
  13. By: Raouf Boucekkine (Aix-Marseille University (Aix-Marseille School of Economics), CNRS and EHESS); Fabien Prieur (INRA-LAMETA and University of Montpellier); Benteng Zou (CREA, University of Luxembourg)
    Abstract: We propose an analysis of institutional dynamics under uncertainty by the means of a stochastic differential lobbying game with two main ingredients. The first one is uncertainty inherent in the institutional process itself. The second one has to do with the crucial role of resource windfalls in economic and political outcomes, shaping lobbying power and adding a second source of uncertainty. First, we focus on uncertainty surrounding the institutional process only and show that its main consequence is the existence of multiple equilibria with very distinct features: symmetric equilibria which lead the economy to reach almost surely a stable pointwise institutional steady state in the long run even in the absence of the retaliation motive put forward by the deterministic lobbying literature, and asymmetric equilibria which only show up under uncertainty and do no allow for stochastic convergence to a steady state. Second, when accounting for the two sources of uncertainty together with resource revenue-dependent lobbying power, we show that revenue volatility tends to stabilize institutional dynamics compared to the deterministic counterpart.
    Keywords: institutional dynamics, lobbying games, state-dependent lobbying power, revenue volatility, stochastic differential games
    JEL: D72 C61 C63
    Date: 2015–07
  14. By: Woll, Cornelia
    Abstract: The rise in inequality has been explained with reference to organized groups and the lobbying of the financial sector. This article argues that the image of politics as organized combat is contradicted by empirical evidence on lobbying in the United States, and does not travel well to Europe. The power of finance does not operate through organized political influence. Rather, politics in the interest of capital unfolds as a structural feature of advanced economies over time. Tellingly, at the height of the financial crisis, one of the most promising strategies of institutions seeking government support was not organizing for combat, but collective inaction. Our challenge, then, is to explain how the power of finance has built up and is playing out in creating inequality. A more structural, less agency-focused perspective highlights how the rise of finance has been supported by actors that few would accuse of being finance-friendly, such as the European center-left parties and consumers. Reconceptualizing the power of finance has important implications for political solutions to rising inequality.
    Date: 2015
  15. By: Christian Longhi (Université Nice Sophia Antipolis; GREDEG-CNRS)
    Abstract: Since the development of the knowledge based economies, clusters and clusters policies have been the subject of increased interest, as sources of knowledge, innovation, and competitiveness. The paper focuses on a case study drawn from the French cluster policy, the pole of competitiveness 'Secure Communicating Solutions' in the French Provence-Alpes-Côte d'Azur Region, based on two high tech clusters, Rousset - Gémenos and Sophia-Antipolis. The policy aims to provide the firms incentives to build network relations of heterogeneous actors to trigger innovative processes. The analysis of the collaborative R&D projects of the pole provides insights on the nature of the collective learning networks working in the clusters as well as the prevailing organizational forms resulting from the firms strategies. It show that knowledge spillovers are not simply "in the air" but very specific of the learning networks and clusters from which they belong. Clusters thus need to be analyzed jointly with networks in order to understand the processes underlying their innovation capacity.
    Keywords: Collective Learning Networks, Knowledge, Innovation, Clusters, Cluster Policy, Social Network Analysis
    JEL: L14 L38 O31 R11
    Date: 2015–08

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