nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2015‒10‒10
twelve papers chosen by
Stan C. Weeber, McNeese State University

  1. The Effect of Voting on Contributions in a Public Goods Game By le Sage, Sander; van der Heijden, Eline
  2. Electoral incentives, term limits and the sustainability of peace By Paola Conconi; Nicolas Sahuguet; Maurizio Zanardi
  3. Sophisticated Electoral Accountability: A Political Psychology Agency Theory By ALESSANDRO BELMONTE
  4. Beliefs, politics, and environmental policy By Antony Millner; Hélène Ollivier
  5. Riot Rewards? Study of BJP's Electoral Performance and Hindu Muslim Riots By Rohit Ticku
  6. Solving Collective Action Poblems in a Political Economy Model of Social Polarization and Conflict By Ernesto Cardenas Prieto
  7. Language and intergroup discrimination. Evidence from an experiment By Dominique Cappelletti; Luigi Mittone; Matteo Ploner
  8. Public-Good Provision in Large Economies By Felix J. Bierbrauer; Martin F. Hellwig
  9. A minilateral solution for global climate change? On bargaining efficiency, club benefits and international legitimacy By Robert Falkner
  10. More Opportunities than Wealth: A Network of Power and Frustration By Benoit Mahault; Avadh Saxena; Cristiano Nisoli
  11. Equality Concerns and the Limits of Self-Governance in Heterogeneous Populations By Gangadharan, Lata; Nikiforakis, Nikos; Villeval, Marie Claire
  12. Group Gender Composition and Economic Decision-Making By Lamiraud, Karine; Vranceanu , Radu

  1. By: le Sage, Sander; van der Heijden, Eline (Tilburg University, Center For Economic Research)
    Abstract: This paper reports the results of a public good experiment with voting. The standard game in which subjects decide simultaneously on their contributions to a public good is extended by a second stage. In this stage, subjects can express agreement or disagreement with the contributions of their group members and the resulting payoff by voting yes or no. The treatment variable is the voting threshold, which specifies how many votes are at least needed to implement the outcome. We find that average contributions are higher with a voting system, but only if the required number of votes is sufficiently high. The higher average contribution level is mainly realized because subjects manage to avoid the typical pattern of declining contributions across periods. We argue that the higher and rather stable contributions observed under high threshold levels may be related to the fact that voting is seen as a legitimate instrument. Support for this claim is provided by results from a post-experimental questionnaire.
    Keywords: public goods; laboratory experiment; voting
    JEL: C92 H41 D72 D02
    Date: 2015
  2. By: Paola Conconi; Nicolas Sahuguet; Maurizio Zanardi
    Abstract: One of the few stylized facts in international relations is that democracies, unlike autocracies, almost never fight each other. We develop a theoretical model to examine the sustainability of international peace between democracies and autocracies, where the crucial difference between<br/>these two political regimes is whether or not policymakers are subject to periodic elections. We show that the fear of losing office can make it less tempting for democratic leaders to wage war against other countries. Crucially, this discipline effect can only be at work if incumbent leaders can be re-elected, suggesting that democracies with term limits should be more conflict prone,<br/>particularly when the executive is serving the last possible term. These results rationalize recent empirical findings on how term limits affect the propensity of democracies to engage in conflicts.
    Keywords: Interstate Conflicts, Democratic Peace, Elections, Term Limits
    JEL: C72 D72 F00
    Date: 2015
    Abstract: I propose a political agency model where rent-maximizer rulers are constrainedby sophisticated principals/producers that use an awareness-management model à la Bènabou and Tirole. In the first part of the paper I empirically test the theoreticalnexus between education and political sophistication by comparing individualswith different education attainments within more than eighty countries and morethat twenty religious groups introduced to capture specic cultural variation inthe results. And elastic (inelastic) political beliefs for respondents with a tertiary(primary) degree according to the quality of political institutions. Motivatedby that, I model Political Psychology predictions by introducing heterogeneity onthe electoral side: producers are endowed with di fferent levels of education, thatincrease over time with human capital investments. I allow education to be boththe engine of growth and a determinant of political participation; in equilibrium,more educated societies are more able to punish politicians that, in turn, investmore in productive public goods such as infrastructure, roads or legal rules forcontracts enforcement. I prove the existence of multiple steady states featuring,respectively, a sophisticated society with congruent politicians in once, and a naivesociety ruled by dissonant politicians. Finally, I address inequality concerns andshow how, for intermediate values, inequality opposingly hits citizens and ruler andonly the latter is found to better or conversely, citizens are averse to inequality,contributing to explain, via sophisticated accountability, why most people dislikeliving in a society which is too unequal.Keywords: political economy, voting, signaling, sophistication, naivet e, human capital,economic growth, inequality.
    Keywords: political economy, voting, signaling, sophistication, naivete', human capital, economic growth, inequality
    JEL: H30 O43 D21 D72
    Date: 2015–07–01
  4. By: Antony Millner; Hélène Ollivier
    Abstract: The public often perceives environmental problems differently from the experts who study them. The regulatory response to these problems also often does not coincide with experts’ recommendations. These two facts are mutually consistent – it is unlikely that regulations based on factual claims that are substantially different from voters’ opinions would be political feasible. Given that the public’s beliefs constrain policy choices, it is vital to understand how they come about, whether they will be biased, and how the inevitable heterogeneity in people’s beliefs filters through the political system to affect policy. We survey recent theoretical and empirical work on individual inference, social learning, and the supply of information by the media, and identify the potential for biased beliefs to arise. We then examine the interaction between beliefs and politics. We ask whether national elections and votes in legislatures can be expected to result in accurate collective decisions, how heterogeneous beliefs may induce strategic political actors to alter their policy choices, and how persuasion by experts and lobbies affects the information at policy-makers’ disposal. We conclude by suggesting that the relationship between beliefs and policy choices is a relatively neglected aspect of the theory of environmental regulation, and a fruitful area for further research.
    Date: 2015–08
  5. By: Rohit Ticku (The Graduate Institute of International and Development Studies, Geneva)
    Abstract: Do incidents of ethnic polarization influence voter behavior? I address this question through the case study of India, the world’s largest functional democracy. Specifically, I test whether prior events of Hindu-Muslim riots electorally benefit Bharatiya Janta Party (BJP), a prominent Hindu nationalist party? The paper contributes to the literature by being the first to establish a causal relationship between Hindu-Muslim riots and BJP’s electoral performance. Results show that riots have a positive and significant effect on BJP’s vote share and are robust to our instrumentation strategy. The party vote share increases between 2.9 to 4.4 percent in response to different riot outcomes. Results seem to back the theory of electoral incentives i.e. parties representing elites among ethnic groups may have an incentive to instigate ethnic conflict to influence the marginal voter.
    Keywords: Ethnic conflict, Hindu Muslim riots, Electoral performance, Voter behavior, Bharatiya Janta Party (BJP).
    JEL: D72 D74
    Date: 2015–09–30
  6. By: Ernesto Cardenas Prieto (Faculty of Economics and Management, Pontificia Universidad Javeriana Cali)
    Abstract: I use the concept of Stability Sets in order to analyze the probability of collective action taking place in a political-economy model characterizing a polarized society. In the model, society is composed of two social groups and I focus on how changes in the economic parameters of the model, underlying the political preferences of the groups, alter the probability for collective action to take place and move society from one equilibrium to the other of the two possible equilibria of the model.
    Keywords: Collective Action, Polarization, Social Conflict, Prices.
    JEL: D74 O12
    Date: 2015–07
  7. By: Dominique Cappelletti; Luigi Mittone; Matteo Ploner
    Abstract: Language is one of the most salient dimensions of ethnocultural identity and clearly marks who is and who is not a member of the group. We conduct an experiment to investigate the role of language in intergroup discrimination in the creation of social capital, here operationalised as a measure encompassing trust, trustworthiness, cooperation, and coordination. We observe the behaviour of the members of a minority language community when they receive the instructions written in their own idiomatic language and when they receive them written in the surrounding language. We find a language effect on behaviour, but this effect is gender specific. When deciding in the surrounding language, participants do not treat ingroup and outgroup members differently. When deciding in their own idiomatic language, females show intergroup discrimination and treat ingroup members more favourably compared to how they treat them when deciding in the surrounding language. We also observe that the behaviour participants exhibit in the experiment positively correlates with their attitudes as measured by the standard trust survey question used as a proxy for social capital.
    Keywords: language, intergroup discrimination, social capital, experiment
    JEL: C9
    Date: 2015
  8. By: Felix J. Bierbrauer (University of Cologne, Chair for Public Economics CMR – Center for Macroeconomic Research); Martin F. Hellwig (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: In a large economy, a first-best provison rule for a public good is robustly implementable with budget balance because no one individual alone can affect the aggregate outcome. First-best outcomes can, however, be blocked by coalitions of agents acting in concert. With a requirement of immunity against robustly blocking coalitions, we find that, for a pubic good that come as a single indivisible unit, a monotonic social choice function cannot condition on preference intensities but only on the population shares of people favoring one outcome over another. Any such social choice function can be implemented by a simple voting mechanism. With more public-good provision levels, more complicated mechanisms are required, but they still involve the counting of votes rather than an assessment of benefits. Monotonicity and immunity against robust blocking thus provide a foundation for the use of voting mechanisms.
    Keywords: Mechanism Design, Public-good provision, Large Economy, Voting Mechanisms, Robust Incentive Compatibility, Immunity against Robustly Blocking Coalitions, Monotonic Social Choice Functions
    JEL: D82 H41 D70 D60
    Date: 2015–09
  9. By: Robert Falkner
    Abstract: Gridlock in the multilateral climate negotiations has created growing scholarly and practical interest in the use of minilateral forums. A large variety of climate club proposals have been developed in recent years, which promise more effective bargaining among the main climate powers, better incentives to encourage mitigation efforts and discourage free-riding, and new ways to align international power asymmetries with the interests of the global climate regime. This paper investigates the three dominant rationales that underpin minilateralist proposals. It offers a critical review of the their potential as well as limitations in promoting global climate action. It argues that minilateralism is unlikely to overcome the structural barriers to a comprehensive and ambitious international climate agreement. However, climate clubs can enhance political dialogue in the context multilateral negotiations and provide a more conducive environment for great power bargaining. They can create club benefits that strengthen mitigation strategies by so-called coalitions of the willing and help reduce the dangers of free-riding. And they can help re-legitimate the global climate regime against the background of profound power shifts that have slowed down progress in the multilateral negotiations.
    Date: 2015–07
  10. By: Benoit Mahault; Avadh Saxena; Cristiano Nisoli
    Abstract: We introduce a minimal agent-based model to qualitatively conceptualize the allocation of limited wealth among more abundant opportunities. We study the interplay of power, satisfaction and frustration in distribution, concentration, and inequality of wealth. Our framework allows us to compare subjective measures of frustration and satisfaction to collective measures of fairness in wealth distribution, such as the Lorenz curve and the Gini index. We find that a completely libertarian, law-of-the-jungle setting, where every agent can acquire wealth from, or lose wealth to, anybody else invariably leads to a complete polarization of the distribution of wealth vs. opportunity. The picture is however dramatically modified when hard constraints are imposed over agents, and they are limited to share wealth with neighbors on a network. We then propose an out of equilibrium dynamics {\it of} the networks, based on a competition between power and frustration in the decision-making of agents that leads to network coevolution. We show that the ratio of power and frustration controls different dynamical regimes separated by kinetic transitions and characterized by drastically different values of the indices of equality. The interplay of power and frustration leads to the emergence of three self-organized social classes, lower, middle, and upper class, whose interactions drive a cyclical regime.
    Date: 2015–10
  11. By: Gangadharan, Lata (Monash University); Nikiforakis, Nikos (New York University, Abu Dhabi); Villeval, Marie Claire (CNRS, GATE)
    Abstract: Mechanisms to overcome social dilemmas provide incentives to maximize efficiency. However, often – such as when agents are heterogeneous – there is a trade-off between efficiency and equality. Agents' concerns for equality in such instances can limit the ability of mechanisms to promote efficiency. We provide evidence for this from a public good experiment using a simple mechanism which allows individuals to communicate periodically with other group members and reward them for their actions. We show that, in homogeneous populations – where there is no tension between efficiency and equality – the mechanism permits group to obtain maximum efficiency. This is not the case in heterogeneous populations where individuals derive different benefits from cooperation. Although almost all heterogeneous groups agree to follow specific contribution rules with positive contributions, most of them either prioritize equality over efficiency or strike a compromise between the two. These findings suggest that equality concerns can impose limits on the ability of heterogeneous populations to reach efficient outcomes through self-governance.
    Keywords: communication, rewards, cooperation, normative conflict, heterogeneity
    JEL: C92 H41 D74
    Date: 2015–09
  12. By: Lamiraud, Karine (ESSEC Business School and THEMA); Vranceanu , Radu (ESSEC Business School and THEMA)
    Abstract: This paper analyses data collected in 2012 and 2013 at the ESSEC Business School from Kallystée, a proprietary mass-attendance business game. Company boards are simulated by groups of five students selected at random. We manipulate the gender composition of the management teams to allow for all possible gender combinations. We show that all-men and mixed teams with four women perform significantly better than all-women teams. However, when controlling for the average tolerance to risk of the teams, the performance advantage of all-men teams vanishes, while the “residual” economic performance of mixed-gender teams with a majority of women is still positive and strong. Further analysis of “actual” risk-taking behavior shows that in these mixed-gender teams a “risk shift” mechanism is at play, as they take risks beyond what their total tolerance to risk as a group would suggest.
    Keywords: group decision; gender studies; risk-taking; business game; performance; governance
    JEL: C93 D71 M14
    Date: 2015–09

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