nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒02‒17
nine papers chosen by
Stan C. Weeber, McNeese State University

  1. On the Impact of Quotas and Decision Rules in Ultimatum Collective Bargaining By Grimm, Veronika; Feicht, Robert; Rau, Holger; Stephan, Gesine
  2. Transparency in Parliamentary Voting By Bütler, Monika; Benesch, Christine; Hofer, Katharina
  3. Pocketbook voting and social preferences in referenda By Meya, Johannes; Poutvaara, Panu; Schwager, Robert
  4. On Two-Period Committee Voting: Why Straw Polls Should Have Consequences By Frommeyer, Tim
  5. Connections in Scientific Committees and Applicants' Self-Selection: Evidence from a Natural Randomized Experiment By Bagues, Manuel F.; Sylos-Labini, Mauro; Zinovyeva, Natalia
  6. How do voters react to complex choices in a direct democracy? Evidence from Switzerland By Zohal Hessami
  7. The Political Economy of Bank Bailouts By Haselmann, Rainer; Kick, Thomas; Behn, Markus; Vig, Vikrant
  8. Same Process, Different Outcomes: Group Performance in an Acquiring a Company Experiment By Casari, Marco; Zhang, Jingjing; Jackson, Christine
  9. Ready to Reform: How Popular Initiatives Can Be Successful By Hofer, Katharina Eva; Marti, Christian; Bütler, Monika

  1. By: Grimm, Veronika; Feicht, Robert; Rau, Holger; Stephan, Gesine
    Abstract: We conduct multi-person one-shot ultimatum games that reflect important aspects of collective bargaining. In all treatments a proposer has to divide a pie among herself and six recipients that are divided into two groups of three. The proposer cannot discriminate among, but across group members. Acceptance decisions are taken by a committee of three representatives from one or both groups. In a 2x2 design we vary (i) representation in the decision committee (one vs. both groups) and (ii) the decision rule (unanimity vs. majority voting). We find that (i) representation of a group in the committee is crucial for receiving a significant share, (ii), proposals are more balanced if both groups have veto power (iii) acceptance rates are only high when the environment gives a clear idea of what an appropriate proposal is. Non--binding communication reduces rejection rates and proposer shares.
    JEL: C92 C78 C91
    Date: 2015
  2. By: Bütler, Monika; Benesch, Christine; Hofer, Katharina
    Abstract: We exploit a recent change in voting procedures in one of the two chambers of the Swiss parliament to explore how transparency affects the votes of Members of Parliament (MPs). Until 2013, the Council of States (St nderat) decided by hand rising. While publicly observable at the time of the vote, MPs decisions could only be verified through time-consuming screening of online videos ex post. In 2014 - in the middle of the legislation period, the chamber switched to electronic voting. As MPs decisions are available online, transparency and observability of MP voting increased. Our analysis is based on individual voting behavior from all final passage votes in the 2011-2015 legislation period. In a difference-in-difference framework, the larger chamber, the National Council (Nationalrat), serves as control group. Voting procedures in the latter have not changed since 2007, the legislative text is identical in both chambers. After the reform, members of the Council of States are significantly less likely to deviate from their party line. We also observe a higher probability to abstain even though a strong party line exists. Our results are in line with increased observability of MP votes and higher conformity pressure from parties and party groups.
    JEL: D72 D71 H10
    Date: 2015
  3. By: Meya, Johannes; Poutvaara, Panu; Schwager, Robert
    Abstract: We study the role of self-interest and social preferences in referenda. Our analysis is based on collective purchasing decisions of university students on deep-discount flat-rate tickets for public transportation and culture. Individual usage data allows quantifying monetary benefits associated with each ticket. We find that turnout is much higher among students who benefit a lot from having a ticket, suggesting instrumental voting. In each referendum, a majority votes in line with self-interest, providing strong evidence for pocketbook voting. However, social preferences like altruism, public good considerations and paternalism shift the vote of a sizeable minority against their own financial interest.
    JEL: D72 H41 D64
    Date: 2015
  4. By: Frommeyer, Tim
    Abstract: We consider a committee voting setup with two rounds of voting where committee members, who possess private information about the state of the world, have to make a binary decision. We investigate incentives for truthful revelation of their information in the first voting period. Coughlan (2000 shows that members reveal their information in a straw poll only if their preferences are homogeneous. By taking costs of time into account, we demonstrate that heterogeneous committees have strictly higher incentives to reveal information and can be strictly better off if the straw poll allows for an earlier decision for high level of consensus.
    JEL: D72 D82 D83
    Date: 2015
  5. By: Bagues, Manuel F. (Aalto University); Sylos-Labini, Mauro (University of Pisa); Zinovyeva, Natalia (Aalto University)
    Abstract: We examine how the presence of connections in scientific committees affects researchers' decision to apply and their chances of success. We exploit evidence from Italian academia, where in order to be promoted to an associate or full professorship, researchers are firstly required to qualify in a national evaluation process. Prospective candidates are significantly less likely to apply when the committee includes, through luck of the draw, a colleague or a co-author. This pattern is driven mainly by researchers with a weak research profile. At the same time, information from 300,000 individual evaluation reports shows that applicants tend to receive more favorable evaluations from connected evaluators. Overall, this evidence is consistent with both the existence of a bias in favor of connected candidates and with academic connections reducing information asymmetries. Our study shows that connections are an important determinant of application decisions in academia and, more generally, it highlights the relevance of self-selection for empirical studies on discrimination.
    Keywords: scientific evaluations, connections, self-selection
    JEL: I23 M51 J45
    Date: 2015–12
  6. By: Zohal Hessami (Department of Economics, University of Konstanz, Germany)
    Abstract: Direct democracy may impose significant information demands on voters especially when individual propositions are highly complex. Yet, it remains theoretically ambiguous how proposition complexity affects referendum outcomes. To explore this question, I use a novel dataset on 153 Swiss federal referendums that took place between 1978 and 2010. The dataset includes hand collected data on the number of subjects per proposition based on official prereferendum information booklets as a measure of complexity. My estimation results suggest that the relationship between proposition complexity and the share of yes-votes follows an inverse U-shape. Using micro-data from representative post-referendum surveys, I provide evidence for two opposing channels. More complex propositions are supported by a more diverse group of voters. On the other hand, voters find it more difficult to estimate the personal consequences of complex propositions and are therefore more likely to reject them.
    Keywords: Direct democracy, Complexity, Voting behavior, Random errors, Political economy of reforms
    JEL: D72 D78 D81
    Date: 2016–01–10
  7. By: Haselmann, Rainer; Kick, Thomas; Behn, Markus; Vig, Vikrant
    Abstract: In this paper, we examine how the institutional design affects the outcome of bank bailout decisions. In the German savings bank sector, distress events can be resolved by local politicians or a state-level association. We show that decisions by local politicians with close links to the bank are distorted by personal considerations: While distress events per se are not related to the electoral cycle, the probability of local politicians injecting taxpayers' money into a bank in distress is 30~percent lower in the year directly preceding an election. Using the electoral cycle as an instrument, we show that banks that are bailed out by local politicians experience less restructuring and perform considerably worse than banks that are supported by the savings bank association. Our findings illustrate that larger distance between banks and decision makers reduces distortions in the decision making process, which has implications for the design of bank regulation and supervision.
    JEL: G21 G28 D72
    Date: 2015
  8. By: Casari, Marco (University of Bologna); Zhang, Jingjing (University of Technology, Sydney); Jackson, Christine (Purdue University)
    Abstract: It is still an open question when groups perform better than individuals in intellective tasks. We report that in an Acquiring a Company game, what prevailed when there was disagreement among group members was the median proposal and not the best proposal. This aggregation rule explains why groups underperformed with respect to a "truth wins" benchmark and why they performed better than individuals deciding in isolation in a simple version of the task but worse in the more difficult version. Implications are drawn on when to employ groups rather than individuals in decision making.
    Keywords: winner's curse, group decision making, communication, risky shift, herd behavior
    JEL: C91 C92 D03 D81
    Date: 2015–12
  9. By: Hofer, Katharina Eva; Marti, Christian; Bütler, Monika
    Abstract: We study whether the number of signatures collected to qualify a popular initiative affects the probability of reforming the status quo. The initiative process is modeled as a sequential game under uncertainty: petitioners make an entry decision and collect signatures to qualify the initiative. Politicians decide about a political compromise - a counter proposal - after which petitioners have the option to withdraw the initiative before the vote. In equilibrium, politicians infer the initiative's popularity from the number of signatures and collection time. They more likely grant counter proposals to initiatives perceived as a threat to the status quo. To prove their success probability, petitioners sometimes have the incentive to collect more signatures than required for qualification. We test model predictions based on the data set of all Swiss constitutional initiatives at federal level between 1891 and 2010. Overall, we find supporting evidence for the model mechanisms. Reforms are most likely once a far-reaching counter proposal is issued such that the initiative is withdrawn. We find a significant effect of collecting more signatures than required on the probability of provoking a compromise.
    JEL: D72 P16 C70
    Date: 2015

This nep-cdm issue is ©2016 by Stan C. Weeber. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.