nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2015‒08‒30
fourteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Who's favored by evaluative voting? An experiment conducted during the 2012 French presidential election By Antoinette Baujard; Frédéric Gavrel; Herrade Igersheim; Jean-Francois Laslier; Isabelle Lebon
  2. Public good provision in Indian rural areas : the returns to collective action by microfinance groups By Casini,Paolo; Vandewalle,Lore; Wahhaj,Zaki
  3. Great expectations. What efficiency can be reasonably anticipated in global teams? By Sylvie Chevrier; Annick Manco; Jeanne Salem
  4. Evolution of Fairness and Group Formation in Multi-Player Ultimatum Games By NISHIMURA, Takeshi; OKADA, Akira; SHIRATA, Yasuhiro
  5. Some Unpleasant Bargaining Arithmetic? By Eraslan, Hulya; Merlo, Antonio
  6. Testing Models of Social Learning on Networks: Evidence from a Lab Experiment in the Field By Arun G. Chandrasekhar; Horacio Larreguy; Juan Pablo Xandri
  7. Saving Face and Group Identity By Tor Eriksson; Lei Mao; Marie Claire Villeval
  8. The impact of within-party and between-party ideological dispersion on fiscal outcomes: evidence from Swiss cantonal parliaments By Tjasa Bjedov; Simon Lapointe; Thierry Madiès
  9. Institutional Dynamics Under Revenue Volatility and Revenue-Dependent Lobbying Power: A Stochastic Differential Game Approach By Raouf Boucekkine; Fabien Prieur; Benteng Zou
  10. Dynamic Agenda Setting By Chen, Ying; Eraslan, Hulya
  11. From innovation to diversification: a simple competitive model By Fabio Saracco; Riccardo Di Clemente; Andrea Gabrielli; Luciano Pietronero
  12. The Dynamic Free Rider Problem: A Laboratory Study By Battaglini, Marco; Nunnari, Salvatore; Palfrey, Thomas R
  13. Multilateral Trade Bargaining: A First Look at the GATT Bargaining Records By Kyle Bagwell; Robert W. Staiger; Ali Yurukoglu
  14. Together at Last: The Endogenous Formation of Free Trade Agreements and International R&D Networks By Tran, Tat Thanh; Zikos, Vasileios

  1. By: Antoinette Baujard (GATE - GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - UCBL - Université Claude Bernard Lyon 1 - UL2 - Université Lumière - Lyon 2 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - ENS Lyon - École normale supérieure - Lyon); Frédéric Gavrel (TEPP - Travail, Emploi et Politiques Publiques - UPEM - Université Paris-Est Marne-la-Vallée - CNRS, CREM - Centre de Recherche en Economie et Management - CNRS - Université de Caen Basse-Normandie - UR1 - Université de Rennes 1); Herrade Igersheim (BETA - Bureau d'économie théorique et appliquée - CNRS - Université Nancy II - Université de Strasbourg); Jean-Francois Laslier (Department of Economics, Ecole Polytechnique - CNRS - Polytechnique - X); Isabelle Lebon (Economie publique et choix social - CREM - Centre de Recherche en Economie et Management - CNRS - Université de Caen Basse-Normandie - UR1 - Université de Rennes 1)
    Abstract: Under evaluative voting, the voter freely grades each candidate on a numerical scale, with the winning candidate being determined by the sum of the grades they receive. This paper compares evaluative voting with the two-round system, reporting on an experiment, conducted during the 2012 French presidential election, which attracted 2,340 participants. Here we show that the two-round system favors “exclusive” candidates, that is candidates who elicit strong feelings, while evaluative rules favor “inclusive” candidates, that is candidates who attract the support of a large span of the electorate. These differences are explained by two complementary reasons : the opportunity for the voter to support several candidates under evaluative voting rules, and the specific pattern of strategic voting under the two-round voting rule.
    Date: 2014–12–03
  2. By: Casini,Paolo; Vandewalle,Lore; Wahhaj,Zaki
    Abstract: Self-help groups (SHGs) are the most common form of microfinance in India. The authors provide evidence that SHGs, composed of women only, undertake collective actions for the provision of public goods within village communities. Using a theoretical model, this paper shows that an elected official, whose aim is to maximize re-election chances, exerts higher effort in providing public goods when private citizens undertake collective action and coordinate their voluntary contributions towards the same goods. This effect occurs although government and private contributions are assumed to be substitutes in the technology of providing public goods. Using first-hand data on SHGs in India, the paper tests the prediction of the model and shows that, in response to collective action by SHGs, local authorities tackle a larger variety of public issues, and are more likely to tackle issues of interest to SHGs. The findings highlight how the social behavior of SHGs can influence the governance of rural Indian communities.
    Keywords: Economic Theory&Research,Corporate Law,Debt Markets,Civil Society,Political Economy
    Date: 2015–08–19
  3. By: Sylvie Chevrier (IRG - Institut de Recherche en Gestion - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12 - UPEM - Université Paris-Est Marne-la-Vallée); Annick Manco (IOGS - Institut d'Optique Graduate School); Jeanne Salem (Université de Paris Dauphine - Université de Paris Dauphine)
    Abstract: In the last twenty years, international firms have undergone various changes to become global firms. The inherent innovation potential of these global firms only materializes if the various entities cooperate efficiently and succeed in merging together their contributions. The object of this article is to examine the practical forms that this cooperation takes, so as to detect, by observing actors in global organisations, what barriers and difficulties they meet. This paper presents the empirical study of the dynamics of two R&D teams within a major French industrial group. By studying how the daily teamwork takes place, this article takes a critical look at the new models of organization and assesses how far they really favour innovation.
    Abstract: Depuis une vingtaine d’années, les firmes internationales se sont transformées pour devenir des firmes globales. Cependant, le potentiel d’innovation inhérent à ces firmes globales ne se concrétise que si les acteurs des différentes entités coopèrent efficacement et réussissent à intégrer leurs contributions. L’objet de cet article est donc d’examiner les formes concrètes de coopération des acteurs qui participent de ces entreprises globales, de déceler les obstacles qu’ils rencontrent et déterminer des modes de management les plus à même de concrétiser les gains potentiels de ces structures en réseau. Cet article s’appuie sur l’analyse empirique du fonctionnement de deux équipes projet dans un grand Groupe international d’origine française. L’analyse du fonctionnement quotidien de ces équipes projets ouvre la voie à une approche critique de ces nouveaux modèles d’organisations globales considérés comme les plus propices à l’innovation.
    Date: 2014–06–05
  4. By: NISHIMURA, Takeshi; OKADA, Akira; SHIRATA, Yasuhiro
    Abstract: Group formation is a fundamental activity in human society. Humans often exclude others from a group and divide the group benefit in a fair way only among group members. Such an allocation is called in-group fair. Does natural selection favor an in-group fair allocation? We investigate the evolution of fairness and group formation in a three-person Ultimatum Game (UG) in which the group value depends on its size. In a stochastic model of the frequency-dependent Moran process, natural selection favors the formation of a two-person subgroup in the low mutation limit if its group value exceeds a high proportion (0.7) of that of the largest group. Stochastic evolutionary game theory provides theoretical support to explain the behavior of human subjects in economic experiments of a three-person UG.
    Date: 2015–08
  5. By: Eraslan, Hulya (Rice University); Merlo, Antonio (Rice University)
    Abstract: It is commonly believed that, since unanimity rule safeguards the rights of each individual, it protects minorities from the possibility of expropriation, thus yielding more equitable outcomes than majority rule. We show that this is not necessarily the case in bargaining environments. We study a multilateral bargaining model a la Baron and Ferejohn (1989), where players are heterogeneous with respect to the potential surplus they bring to the bargaining table. We show that unanimity rule may generate equilibrium outcomes that are more unequal (or less equitable) than under majority rule. In fact, as players become perfectly patient, we show that the more inclusive the voting rule, the less equitable the equilibrium allocations.
    JEL: C78 D70
    Date: 2014–08
  6. By: Arun G. Chandrasekhar; Horacio Larreguy; Juan Pablo Xandri
    Abstract: Agents often use noisy signals from their neighbors to update their beliefs about a state of the world. The effectiveness of social learning relies on the details of how agents aggregate information from others. There are two prominent models of information aggregation in networks: (1) Bayesian learning, where agents use Bayes' rule to assess the state of the world and (2) DeGroot learning, where agents instead consider a weighted average of their neighbors' previous period opinions or actions. Agents who engage in DeGroot learning often double-count information and may not converge in the long run. We conduct a lab experiment in the field with 665 subjects across 19 villages in Karnataka, India, designed to structurally test which model best describes social learning. Seven subjects were placed into a network with common knowledge of the network structure. Subjects attempted to learn the underlying (binary) state of the world, having received independent identically distributed signals in the first period. Thereafter, in each period, subjects made guesses about the state of the world, and these guesses were transmitted to their neighbors at the beginning of the following round. We structurally estimate a model of Bayesian learning, relaxing common knowledge of Bayesian rationality by allowing agents to have incomplete information as to whether others are Bayesian or DeGroot. Our estimates show that, despite the flexibility in modeling learning in these networks, agents are robustly best described by DeGroot-learning models wherein they take a simple majority of previous guesses in their neighborhood.
    JEL: C91 C92 C93 D83
    Date: 2015–08
  7. By: Tor Eriksson (Department of economics - University of Aarhus); Lei Mao (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS, Central University of Finance and Economics); Marie Claire Villeval (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - CNRS)
    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.
    Date: 2015
  8. By: Tjasa Bjedov (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS - UCBL - Université Claude Bernard Lyon 1 - UL2 - Université Lumière - Lyon 2 - Université Jean Monnet - Saint-Etienne - PRES Université de Lyon - ENS Lyon - École normale supérieure - Lyon, Université de Fribourg, Faculté des sciences économiques et sociales - Université de Fribourg); Simon Lapointe (Université de Fribourg, Faculté des sciences économiques et sociales - Université de Fribourg); Thierry Madiès (Université de Fribourg, Faculté des sciences économiques et sociales - Université de Fribourg)
    Abstract: The impact of the fragmentation of executive and legislative bodies on the level and composition of government expenditure is a political feature that attracted considerable attention from economists. However, previous authors have abstracted from two important concepts : ideology and intra-party politics. In this paper, we explicitly account for these two phenomenons, and make two main contributions. First, we show that both intra-party and interparty ideological dispersion matters in the level of public spending. Therefore, it is incorrect to consider parties as monolithic entities. We also show that ideological dispersion matters especially for current expenditures, and not so much for investment expenditures. To do so, we construct a panel database (2003 to 2011) including data from a survey that quantifies the policy preferences of individual party members that were candidates to federal elections in Switzerland.
    Date: 2014
  9. By: Raouf Boucekkine (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); Fabien Prieur (INRA - INRA MONTPELLIER - Institut national de la recherche agronomique (INRA)); Benteng Zou (CREA - Center for Research in Economic Analysis - - Université du 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.
    Date: 2015–07
  10. By: Chen, Ying (Johns Hopkins University); Eraslan, Hulya (Rice University)
    Abstract: A party in power can address only a limited number of issues in an election cycle. What issues to address--the party's agenda--has dynamic implications because it affects what issues will be addressed in the future. What is the optimal agenda in the presence of dynamic concerns? How does a party's political strength affect its agenda? What are the efficiency implications? We address these questions in a stylized model in which the incumbent in each period addresses one issue among several issues and the remaining issues roll over to the next period. When the incumbent expects its power to strengthen or weaken, strategic manipulations can happen in the form of waiting for the moment and seizing the moment respectively. When the incumbent expects the opposition to come in power next period, strategic manipulations can happen in the form of steering and preemption. In steering, the incumbent gives priority to a less pressing issue to direct the opposition party towards addressing the most pressing issue for the incumbent. In preemption, the incumbent gives priority to the issue most pressing for the opposition to prevent the opposition from addressing it. Although preemption can still be efficient, steering is necessarily inefficient.
    JEL: C78 D72 D78
    Date: 2015–07
  11. By: Fabio Saracco; Riccardo Di Clemente; Andrea Gabrielli; Luciano Pietronero
    Abstract: Few attempts have been proposed in order to describe the statistical features and historical evolution of the export bipartite matrix countries/products. An important standpoint is the introduction of a products network, namely a hierarchical forest of products that models the formation and the evolution of commodities. In the present article, we propose a simple dynamical model where countries compete with each other to acquire the ability to produce and export new products. Countries will have two possibilities to expand their export: innovating, i.e. introducing new goods, namely new nodes in the product networks, or copying the productive process of others, i.e. occupying a node already present in the same network. In this way, the topology of the products network and the country-product matrix evolve simultaneously, driven by the countries push toward innovation.
    Date: 2015–08
  12. By: Battaglini, Marco; Nunnari, Salvatore; Palfrey, Thomas R
    Abstract: Most public goods are durable and have a significant dynamic component. In this paper, we report the results from a laboratory experiment designed explicitly to study the dynamics of free riding behavior in the accumulation of a durable public good that provides a stream of discounted benefits over a potentially infinite horizon. This dynamic free-rider problem differs from static ones in fundamental ways and implies several economically important predictions that are absent in static frameworks. We consider two cases: economies with reversibility (RIE), where the agents’ voluntary contributions to the public good can be positive or negative; and economies with irreversibility (IIE), where contributions are non negative. For both economies, we characterize the unique Markov perfect equilibrium. The evidence supports the main predictions from the theory: behavior is generally consistent with stationary, forward-looking behavior; both in RIE and IIE the accumulation path is inefficiently slow and the public good under-provided; and RIE induces significantly higher public good contributions than IIE. A number of interesting deviations from the theoretical predictions are observed: both in RIE and in IIE we have over-investment in the early rounds of the game; in RIE over-investment is followed by periods in which negative contributions correct the stock, bringing it back to the predicted steady state; in IIE over-investment tends to decline approaching zero. To test the Markovian assumption, we compare the predictions of the Markov equilibrium with the prediction of the most efficient subgame perfect equilibrium and propose a novel experimental methodology that relies on the comparison between the behavior in the dynamic game and the behavior in a one-period reduced-form version of the dynamic game.
    Keywords: durable public goods; experiments; voluntary contribution mechanism
    JEL: C72 C73 C78 C92 H41
    Date: 2015–08
  13. By: Kyle Bagwell; Robert W. Staiger; Ali Yurukoglu
    Abstract: This paper empirically examines recently declassified data from the GATT/WTO on tariff bargaining. We document eight stylized facts about these interconnected high-stakes international negotiations. We use detailed product-level offer and counteroffer data to examine several questions about trade policy, including whether preferential tariffs were a stumbling block towards liberalization, and whether the relaxation of bilateral reciprocity to multilateral reciprocity aided liberalization. We organize the empirical analysis around a theoretical model of multi-party trade negotiations motivated by the terms-of-trade theory and respecting the institutional features of most-favored-nation status and reciprocity.
    JEL: C78 D02 F13
    Date: 2015–08
  14. By: Tran, Tat Thanh; Zikos, Vasileios
    Abstract: We study how free trade agreements between countries and international R&D networks between firms emerge endogenously. The government of each country can initiate bilateral free trade agreements to abolish the import tariffs of other countries. Firms can decide whether and with whom to form R&D collaborations. We build a new model of double-layer networks where the network of free trade agreements is formed in the first layer, and the R&D network is formed in the second layer. Consistently with the stylized facts, we find that free trade agreements can promote international R&D collaboration between firms. Private incentives to form free trade agreements are aligned with societal ones. For R&D networks, by contrast, we identify a conflict between private and social incentives.
    Keywords: Free trade agreements, R&D collaboration, tariffs, innovation.
    JEL: D85 F10 L13 L20 O31
    Date: 2014–11–20

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