nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2015‒08‒25
sixteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Strategic Voting under Committee Approval: An Application to the 2011 Regional Government Election in Zurich By Romain Lachat; Jean-François Laslier; Karine Van Der Straeten
  2. Electoral System and Number of Candidates: Candidate Entry under Plurality and Majority Runoff By Damien Bol; André Blais; Jean-François Laslier; Antonin Macé
  3. Mobile Politicians: Opportunistic Career Moves and Moral Hazard By Duha T. Altindag; Naci Mocan
  4. Heuristic voting under the Alternative Vote: the efficiency of “sour grapes" behavior By Jean-Francois Laslier
  5. The 9/11 conservative shift By Simone Schüller
  6. The We and the I: The Logic of Voluntary Associations By Ekaterina Melnik; Jean-Benoît Zimmermann
  7. Taking the Well-being of Future Generations Seriously : Do People Contribute More to Intra-temporal or Inter-temporal Public Goods? By Gilles Grolleau; Angela Sutan; Radu Vranceanu
  8. Unanimity in Attribute-Based Preference Domains By Sidartha Gordon
  9. MAJORITY MEASURES By Michel Balinski; Rida Laraki
  10. The selection criteria of collective bricolage: the case of the Listed-Buildings Institution By Sylvain Colombero
  11. How is corporate governance in Japan changing?: Developments in listed companies and roles of institutional investors By Ryoko Ueda
  12. Do we need to believe Data/Tangible or Emotional/Intuition? By Fanjuan Shi; Jean-Luc Marini
  13. Bargaining through Approval By Matias Nunez; Jean-François Laslier
  14. Social Shareholder Engagement: The Dynamics of Voice and Exit By Jennifer Goodman; Céline Louche; Katinka C. Van Cranenburgh; Daniel Arenas
  15. Heterogeneity and the formation of risk-sharing coalitions By Fernando Jaramillo; Hubert Kempf; Fabien Moizeau
  16. Policy making as bricolage: the role of platforms in institutional innovation By Mélodie Cartel; Eva Boxenbaum; Franck Aggeri

  1. By: Romain Lachat (Universitat Pompeu Fabra - Universitat Pompeu Fabra); Jean-François Laslier (PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Karine Van Der Straeten (TSE - Toulouse School of Economics - Toulouse School of Economics, Institute for Advanced Study Toulouse - Institute for Advanced Study Toulouse)
    Abstract: In several cantons in Switzerland the regional government, i.e. a set of governors who share the executive power in the canton, is elected according to an original voting rule, in which voters can vote for several candidates (up to a maximal number of votes). Up to some details, these elections are instances of what is known in Social Choice Theory as “Committee Approval Voting”. The paper makes use of data from a panel survey collected during the 2011 Zurich cantonal election to check whether a strategic voting theory is consistent with individual behaviour observed during that election. We show that roughly 70% of the individual decisions on candidates are consistent with our model of rational voting.
    Date: 2015–06
  2. By: Damien Bol (Université de Montréal - UdeM (CANADA) - Université de Montréal - UdeM (CANADA)); André Blais (Université de Montréal - UdeM (CANADA) - Université de Montréal - UdeM (CANADA)); Jean-François Laslier (PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Antonin Macé (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université)
    Abstract: We know that electoral systems have an effect on the number of competing candidates. However, a mystery remains concerning the impact of majority runoff. According to theory, the number of competing candidates should be equal (or only marginally larger) under majority runoff than under plurality. However, in real-life elections, this number is much higher under majority runoff. To provide new insights on this puzzle, we report the results of a laboratory experiment where subjects play the role of candidates in plurality and majority runoff elections. We use a candidate-only and sincere-voting model to isolate the effect of the electoral system on the decision of candidates to enter the election. We find very little difference between the two electoral systems. We thus re-affirm the mystery of the number of competing candidates under majority runoff.
    Date: 2015–06
  3. By: Duha T. Altindag; Naci Mocan
    Abstract: We exploit the randomness generated by a seat allocation mechanism utilized in Parliamentary elections that determines those politicians who get elected from a given district by a small margin, and those who lose. Using detailed information on personal attributes of more than 2,000 elected Members of the Parliament (MPs) and the votes received by each political party in every district and each of the five consecutive Parliamentary elections in Turkey between 1991 and 2011, we show that elected MPs are more likely to switch parties after an election if they faced electoral uncertainty and experienced a narrowly-won victory. The tendency to switch parties goes up as it becomes more lucrative to hold the post of MP. The impact of election uncertainty on party-switching is greater for younger MPs, and for those who are less educated. The propensity to switch due to uncertainty is higher if the MP is a member of the governing party, but only if the seat is valuable (if the majority of the party in the Parliament is slim). Politicians switch parties after an election to improve their ex-ante re-election probability in the following election. Although switching parties during a legislative session (between elections) for personal career concerns creates moral hazard, we find that party-switching MPs are more likely to get elected in the next election. These results point to forward-looking opportunistic behavior of politicians regarding their strategy to win future elections, and they indicate that politicians switch parties primarily for career concerns and for financial benefits that are associated with longer tenure in the Parliament. The results also signify that competition between political parties continues after the election, in the form of gaining seats in the Parliament post- election by transferring elected representatives of competing parties. This constitutes another dimension of the political agency problem.
    JEL: D72 K0
    Date: 2015–07
  4. By: Jean-Francois Laslier (PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics)
    Abstract: This theoretical paper contrasts two voting heuristics: overstating and replacing. Under the Alternative Vote, overstatement is inefficient but replacement is efficient. The paper argues that the “replacing" manipulation corresponds to a psychologically and politically plausible voter behavior.
    Date: 2015–06
  5. By: Simone Schüller
    Abstract: This study analyzes the causal impact of the 9/11 terror attacks on individual political orientation and political support intensity using the German Socio-Economic Panel 1999-2003. Exploiting survey interview timing in 2001 for identification and controlling for unobserved individual heterogeneity, I find 9/11 to have increased overall political mobilization. While there is no indication of a considerable switch in support between political blocks, the attacks significantly weakened support intensity among left-wing voters and increased the strength of political support among right-wing voters, indicating a shift in conservative direction.
    Keywords: political orientation, party support, terrorism, causal inference
    JEL: C23 D72 H56
    Date: 2015–08
  6. By: Ekaterina Melnik (CEE - Centre d'études de l'emploi - M.E.N.E.S.R. - Ministère de l'Éducation nationale, de l’Enseignement supérieur et de la Recherche - Ministère du Travail, de l'Emploi et de la Santé, LEST - Laboratoire d'économie et de sociologie du travail - AMU - Aix-Marseille Université - CNRS - Université de Provence - Aix-Marseille 1 - Université de la Méditerranée - Aix-Marseille 2); Jean-Benoît Zimmermann (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université)
    Abstract: This paper sheds new light on the economic logic of voluntary associations and the relationship between individual contribution and collective action. The aims are twofold. Firstly, we seek to explain how "team reasoning" (Bacharach et al. 2006) can deeply change the functioning of voluntary associations (which are considered to produce a public good) when some or all of the individual members group together to make collective decisions about their involvement or contribution, rather than deciding separately. Secondly, we seek to better understand the effects of heterogeneity of resources on individual involvement, in terms of both the budget constraints of individual members and their capacity to contribute differentiated non-monetary contributions to the association, in relation to the diversity of their personal abilities and preferences about the characteristics of the good produced. To this end, we use a model of voluntary association collectively producing a public good, where monetary contributions (compulsory fees plus voluntary donations) is combined with volunteering. We analyze the conditions for an association to offer profitable conditions to its members and the consequences that can be drawn in terms of its existence and size. We show that, at equilibrium, the level of voluntary contributions is ceteris paribus higher when individuals make their decisions on the basis of team-reasoning rather than individually. We analyze the role played by heterogeneity of incomes in the formation of teams within associations. We then introduce the concept of subjective quality into the basic model. The originality of the model is that we assume the public good to be characterized by at least two main components: quantity and quality. The quantity is considered here as a purely public component, insofar as all the members benefit equally from it. However, the quality of the public good is assumed to be a mixed (public and private) component. The agents can enjoy part of it in the same way, but there may be certain characteristics of quality that are difficult or impossible to measure objectively. Quality is always somewhat subjective, to the extent that perfect correspondence with the preferences of heterogeneous agents is unlikely to occur. In our model, the agents can contribute money and/or time and effort. The latter, which we call volunteering, allows them to influence the quality of the good (or service) provided according to their own preferences.
    Date: 2015–01
  7. By: Gilles Grolleau (Unité MIAJ - INRA - Mathématiques et Informatique Appliquées - Institut national de la recherche agronomique (INRA)); Angela Sutan (ESC Dijon Bourgogne - ESC Dijon Bourgogne); Radu Vranceanu (ESSEC - Economics Department - Essec Business School)
    Abstract: We investigate the dynamics of cooperation in public good games when contributions to the public good are immediately redistributed across contributors (intra-temporal transfers) and when contributions to the public good by the current group are transferred over time to a future group (inter-temporal transfers). We show that people are more cooperative in inter-temporal contexts than in intra-temporal contexts. We also find that subjects invest more on average in public goods when they know in advance their inheritance from the past.
    Abstract: Nous étudions un jeu du bien public avec transferts inter temporels. Les résultats indiquent une forme d'altruisme intergénérationnel.
    Date: 2013–09–25
  8. By: Sidartha Gordon (ECON - Département d'économie - Sciences Po)
    Abstract: We provide several characterizations of unanimity decision rules, in a public choice model where preferences are constrained by attributes possessed by the alternatives (Nehring and Puppe, 2007a,b). Solidarity conditions require that when some parameters of the economy change, the agents whose parameters are kept fixed either all weakly lose or they all weakly win. Population-monotonicity (Thomson, 1983a,b) applies to the arrival and departure of agents, while replacement-domination (Moulin,1987) applies to changes in preferences. We show that either solidarity property is compatible with voter-sovereignty and strategy-proofness if and only if the attribute space is quasi-median (Nehring, 2004), and with Pareto-efficiency if and only if the attribute space is a tree. Each of these combinations characterizes unanimity.
    Date: 2014–09
  9. By: Michel Balinski (Department of Economics, Ecole Polytechnique - CNRS - Polytechnique - X); Rida Laraki (Department of Economics, Ecole Polytechnique - CNRS - Polytechnique - X)
    Abstract: The validity of majority rule in an election with but two candidates—and of Condorcet consistency—is challenged. Axioms based on measures— paralleling those of K. O. May characterizing majority rule for two candidates that are based on comparisons—lead to another method. It is unique in agreeing with the majority rule when the electorate is “polarized” and meets R. A. Dahl’s requirement that an apathetic majority not defeat an intense minority. It accommodates any number of candidates and avoids both the Condorcet and Arrow paradoxes.
    Date: 2015–03–30
  10. By: Sylvain Colombero (IOA Copenhagen Business School - Copenhagen Business School, CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris)
    Abstract: The paper studies the role of collective bricolage and material artefacts in the maintenance of an institution. It investigates the selection criteria that guide actors in their collective choice of resources, which they combine through bricolage in order to shape or reshape a material instantiation of an institution. The present case study concerns the Institution of Listed-Buildings, i.e. buildings protected as national patrimony. Through a Grounded-Theory Methodology, I analyse how actors and different stakeholders of construction works maintain the legitimacy of a listed building while modernizing it without distorting its embodied cultural heritage. Based on six selected listed buildings – three in Denmark and three in France – I identify a key dynamic of collective bricolage, notably how actors select material resources they have at hand. The findings point to their use of 1) a meta-resource that captures the essence of an institution, and 2) six different criteria that enable the selection of material resources complying with this meta-resource: individual preference, collective and field alignment, technical features, economics, time and space. These selection criteria facilitate collective decision-making among actors who seek to instantiate an institution through a shared meta-resource. In my empirical case, the actors instantiated the Listed-Buildings Institution through the meta-resource of authenticity, whose leitmotiv is " keeping the heritage above all ". The notions of meta-resource and selection criteria help us comprehend how actors collectively maintain an institution by instantiating it.
    Date: 2015–06–17
  11. By: Ryoko Ueda
    Abstract: This research analyses the improvements to corporate governance within Japanese listed companies and the influence of institutional shareholders. Firstly, in order to analyse the external factors that have promoted the recent corporate governance reform, the report starts with an overview of the changes in the Japanese market post 1970s. The main players before the 1990s were the banks, who provided credit to companies as well as being shareholders. Corporate governance in Japan was characterised by the “main bank” system. However, after the “bubble economy” burst in the early 1990s, institutional investors, including domestic pension funds and foreign asset managers, started to have a greater presence. Secondly, the report analyses the recent developments in corporate governance within listed companies. Developments were influenced considerably by institutional shareholders through proxy voting. Further, the report reviews the legislation and relevant rules on corporate governance including the reform of the Companies Act and the Cabinet Office Ordinance on Disclosure of Corporate Information. Thirdly, the report examines the influence of institutional shareholders and their activities towards good corporate governance. In 2009, the “Report by the Financial System Council’s Study Group on the Internationalization of Japanese Financial and Capital Markets” was published and asset managers, such as investment trusts and investment advisory companies, started to disclose policy and results of proxy voting. In February 2014, pursuant to the recommendation of the “Japan Revitalization Strategy 2013”, Japan’s Stewardship Code was published and it is now expected that institutional shareholders play a significant role to engage with investee companies and improve corporate governance within them. The report also analyses the historical changes to practices within shareholder meetings along with examination of the role that institutional shareholders have played in the improvement of corporate governance within Japanese listed companies.
    Keywords: shareholders, corporate governance, institutional investors
    JEL: G30 G32 G34 G38
    Date: 2015–08–07
  12. By: Fanjuan Shi (Centre de Recherche Magellan - Université Jean Moulin - Lyon III - Institut d'Administration des Entreprises (IAE) - Lyon); Jean-Luc Marini (Centre de Recherche Magellan - Université Jean Moulin - Lyon III - Institut d'Administration des Entreprises (IAE) - Lyon)
    Abstract: Now Data are clearly prevailing in all domains like a new black gold for companies and the rules in business decision-making are called into question. In this context, we think that Data Analytics combined with collaborative decision processes promotes a rational decision-making. However best practices show that more and more executives and managers, the famous HiPPO (Highest Paid Person's Opinion), now frequently use their intuition for strategic decision-making. Moreover a lot of empirical surveys also show how important is the emotion in the intuitive decision-making processes. We will try to explain how we can interpret differently data coming from big data using the most recent scientific advances in the field of psycho-cognitive sciences, in the goal to improve decision support systems and to take into account emotion in the decision-making processes. Finally we hope this could provide some elements to answer to the question: Do we need to believe Data/Tangible or Emotional/Intuition?
    Date: 2014–08–16
  13. By: Matias Nunez (Thema, Université de Cergy-Pontoise - THEMA - Théorie économique, modélisation et applications - Université de Cergy Pontoise - CNRS); Jean-François Laslier (PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics)
    Abstract: The paper considers two-person bargaining under Approval Voting. It first proves the existence of pure strategy equilibria. Then it shows that this bargaining method ensures that both players obtain at least their average and median utility level in equilibrium. Finally it proves that, provided that the players are partially honest, the mechanism triggers sincerity and ensures that no alternative Pareto dominates the outcome of the game.
    Date: 2015–06
  14. By: Jennifer Goodman (ESADE Business School); Céline Louche (Audencia Recherche - Audencia); Katinka C. Van Cranenburgh (ESADE Business School); Daniel Arenas (ESADE Business School)
    Abstract: Investors concerned about the social and environmental impact of the companies they invest in are increasingly choosing to use voice over exit as a strategy. This article addresses the question of how and why the voice and exit options (Hirschman 1970) are used in social shareholder engagement (SSE) by religious organisations. Using an inductive case study approach, we examine seven engagements by three religious organisations considered to be at the forefront of SSE. We analyse the full engagement process rather than focusing on particular tools or on outcomes. We map the key stages of the engagement processes and the influences on the decisions made at each stage to develop a model of the dynamics of voice and exit in SSE. This study finds that religious organisations divest for political rather than economic motives using exit as a form of voice. The silent exit option is not used by religious organisations in SSE, exit is not always the consequence of unsatisfactory voice outcomes, and voice can continue after exit. We discuss the implications of these dynamics and influences on decisions for further research in engagement.
    Date: 2014
  15. By: Fernando Jaramillo (Universidad del Rosario - Facultad de Economia); Hubert Kempf (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Fabien Moizeau (CREM - Centre de Recherche en Economie et Management - CNRS - Université de Caen Basse-Normandie - UR1 - Université de Rennes 1)
    Abstract: We study the relationship between the distribution of individuals' attributes over the pop-ulation and the extent of risk sharing in a risky environment. We consider a society where individuals voluntarily form risk-sharing groups in the absence of financial markets. We obtain a partition of society into distinct coalitions leading to partial risk sharing. When individuals differ only with respect to risk, the partition is homophily-based: the less risky agents congreg-ate together and reject more risky ones into other coalitions. The distribution of risk affects the number and size of these coalitions. It turns out that individuals may pay a lower risk premium in more risky societies. We show that a higher heterogeneity in risk leads to a lower degree of partial risk sharing. The case of heterogenous risk aversion generates similar results. The empirical evidence on partial risk sharing can be understood when the endogenous partition of society into risk-sharing coalitions is taken into account.
    Date: 2015–05
  16. By: Mélodie Cartel (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Eva Boxenbaum (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Franck Aggeri (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris)
    Abstract: The making of environmental policies is a multi-stakeholders process where actors often hold antagonistic interests. The paper explores how institutional compromises are reached by the mechanism of collective bricolage. Recent studies are developing a view on institutional innovation as bricolage, but the conditions under which bricolage occurs and succeeds in relation to institutional innovation are still unknown. Drawing on the notion of platform developed in the context of economics performativity, we study their role in bricolage mechanisms. We hold an empirical case study of the GETS platform that was instrumental in developing the European carbon market as a corner-stone of European climate policy. Based on the GETS case study, we find three modalities in which platforms stimulate institutional bricolage: catalyzing combinations, managing learning, fostering compromise. These findings draw on, and extend, the notion of platforms developed in the context of economics performativity, contributing to a better understanding of processes of bricolage and, more widely, of institutional innovation. The managerial implication of this study is to identify the conditions under which compromises become manageable in processes of policy making. 2
    Date: 2014–07–03

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