nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒03‒10
seven papers chosen by
Stan C. Weeber, McNeese State University

  1. Scoring rules and implementation in iteratively unmoderated strategies By Christian Basteck
  2. Agendas in Legislative Decision-Making By Sean HORAN
  3. An evolutionary approach to social choice problems with q-quota rules By Akira Okada; Ryoji Sawa
  4. Market competition and efficient cooperation By Brandts J.; Riedl A.M.
  5. Extremists into Truth-tellers: Information Aggregation under Asymmetric Preferences By Bonardi, Jean-Philippe; Cadot, Olivier; Cottier, Lionel
  6. Alliance Formation in a Vertically Differentiated Market By Gabszewicz, J.J.; Marini, M.; Tarola, O.
  7. Identity-driven Cooperation versus Competition By Bosworth, Steven; Snower, Dennis J.

  1. By: Christian Basteck (Technische Universitaet Berlin)
    Abstract: We characterize voting procedures according to the solution that they implement when voters cast ballots strategically, applying iteratively undominated strategies. In elections with three candidates, the Borda Rule is the unique positional scoring rule that satisfies unanimity (U) (i.e., elects a candidate whenever it is unanimously preferred) and is majoritarian after eliminating a worst candidate (MEW)(i.e., if there is a unanimously disliked candidate, the majority-preferred among the other two is elected). In the larger class of direct mechanism scoring rules, Approval Voting is characterized by a single axiom – it is majoritarian after eliminating a Pareto dominated candidate (MEPD)(i.e., if there is a Pareto-dominated candidate, the majority-preferred among the other two is elected). However, it fails a desirable monotonicity property: a candidate that is elected for some preference profile, may lose the election once she gains further in popularity. In contrast, the Borda Rule is the unique direct mechanism scoring rule that satisfies U, MEW and monotonicity (MON). Finally, there exists no direct mechanism scoring rule that satisfies both MEPD and MON or Condorcet consistency (CON).
    Keywords: Sophisticated Voting; Iterated Weak Dominance; Implementation; Plurality Rule; Borda Rule; Approval Voting
    JEL: C72 D71 D72
    Date: 2016–02–01
  2. By: Sean HORAN
    Abstract: Despite the wide range of agendas used in legislative decision-making, the literature has focused almost exclusively on two stylized formats, the so-called Euro-Latin and Anglo-American agendas. As emphasized by Ordeshook and Schwartz [1987], this focus leaves a sizable gap in our understanding of the legislative process. To help address the deficiency, I first define a very broad class of agendas (called simple agendas) whose features are common among agendas used in legislative settings. I then characterize the sophisticated (Farquharson [1969]) voting outcomes implemented by agendas in this class. By establishing a clear connection between the structure of simple agendas and the outcomes associated with them, the characterization extends our understanding of legislative decision-making well beyond the very limited scope of Euro-Latin and Anglo-American agendas.
    Keywords: majority voting, sophisticated voting, agendas, committees, implementation
    JEL: C72 D02 D71 D72
    Date: 2016
  3. By: Akira Okada (Kyoto University); Ryoji Sawa (University of Aizu)
    Abstract: This paper considers a dynamic process of n-person social choice problems under q-majority where a status-quo policy is challenged by an opposing policy drawn randomly in each period. The opposing policy becomes the next status-quo if it receives at least q votes. We characterize stochastically stable policies under a boundedly rational choice rule of voters. Under the best response rule with mutations, a Condorcet winner is stochastically stable for all q-quota rules, and uniquely so if q is greater than the minmax quota. Under the logit choice rule, the Borda winner is stochastically stable under the unanimity rule. Our evolutionary approach provides a dynamic foundation of the mini-max policies in multidimensional choice problems with Euclidean preferences.
    Keywords: Stochastic stability; Social choice; Voting; Condorcet winner.
    JEL: C71 C73 D71
    Date: 2016–02
  4. By: Brandts J.; Riedl A.M. (GSBE)
    Abstract: We use laboratory experiments to study the causal effects of favorable and unfavorable competitive market experience on cooperation in a subsequent social dilemma game. The issues we study are part of the broader topic of whether there are behavioral spillovers between different spheres of social interactions. Market interaction takes place in a continuous double auction market in which one side of the market obtains the larger part of the surplus. We examine the efficiency of subsequent cooperation for pairs of market-winners, market-losers and mixed pairs and study both the cases where interaction in the social dilemma is with others from the same market, market-partners, and where it is with others from another market, market-strangers, and compare it with benchmark behavior in a stand-alone social dilemma game. We find that in market-partners, market experience has adverse effects on the efficiency of cooperation on both market-winner and market-loser pairs. In market-strangers, pairs of market-winners manage to cooperate more efficiently. These results indicate that it is not market experience per se that lowers the ability to cooperate. Rather, having competed for scarce resources on the same side of the market makes it difficult to overcome the social dilemma and positive market experience fosters cooperation only for those who did not have to compete with each other. We also show that differences in cooperation cannot be explainedby ex-ante income differences and find that market experience also affects subjective well-being and social value orientation.
    Keywords: Relation of Economics to Social Values; Design of Experiments: Laboratory, Group Behavior; Distribution: General; Labor-Management Relations, Trade Unions, and Collective Bargaining: General; Personnel Economics: General;
    JEL: A13 C92 D30 J50 M50
    Date: 2016
  5. By: Bonardi, Jean-Philippe; Cadot, Olivier; Cottier, Lionel
    Abstract: We set up a model of costly information production between two lobbies, a firm and a consumer group, competing for influence over an imperfectly informed but benevolent government. The government is endowed with a parametric amount of information and chooses the best policy from a finite, countable feasible set given the information available (its own and that forwarded by lobbies). Lobbies have asymmetric preferences, the firm being a high-stakes player with relatively extreme preferences and the consumer group a low-stakes player with preferences more aligned with the government's. We show that lobbies spend too much on information production in any Nash equilibrium despite a timing-game structure in which the lobbies are free to choose the order of play. We also show that in some parameter configurations, the firm insures against a consumer win by forwarding unbiased information to the government, in spite of its own extreme preferences and high stakes. The resulting informational rent enables the government to adopt moderate policies aligned with its own (i.e. societal) preferences, suggesting a new way in which lobby competition can produce good policies even when the government is imperfectly informed.
    Keywords: Game theory; imperfect information; lobbying model; timing game
    JEL: D72 F13 H4 K0 P1
    Date: 2016–02
  6. By: Gabszewicz, J.J. (Université catholique de Louvain, CORE, Belgium); Marini, M. (University of Rome La Sapienza); Tarola, O. (University of Rome La Sapienza)
    Abstract: This paper studies how the possibility for firms to sign collusive agreements (as for instance being part of alliances, cartels and mergers) may affect their quality and price choice in a market with vertically differentiated goods. For this purpose we model the firm decisions as a three-stage game in which, at the first stage, firms can form an alliance via a sequential game of coalition formation and, at the second and third stage, they decide simultaneously their product qualities and prices, respectively. In such a setting we study whether there exist circumstances under which either full or partial collusion can be sustained as a subgame perfect Nash equilibrium of the coalition formation game. Also, we analyse the effects of different coalition structures on equilibrium qualities, prices and profits accruing to firms. It is shown that only intermediate coalition structures arise at the equilibrium, with the bottom quality firm always included. Moreover, all equilibrium price and quality configurations always coincide with that observed in the duopoly case, with only two quality variants on sale.
    Keywords: Vertically differentiated market, endogenous alliance formation, coalition structures, price collusion, grand coalition, coalition stability, sequential games of coalition formation
    JEL: D42 D43 L1 L12 L13 L41
    Date: 2015–04–01
  7. By: Bosworth, Steven; Snower, Dennis J.
    Abstract: This paper seeks to extend the domain of identity economics by exploring motivational foundations of in-group cooperation and out-group competition. On this basis, we explore the reflexive interaction between individual economic decisions and social identities in response to technological change in market economies. Our analysis explores how technological change falling on marketable goods and services, rather than nonmarket caring relationships, leads to a restructuring of identities, which increases the scope of individualism and promotes positional competition at the expense of caring activities. Since positional competition generates negative externalities while caring activities create positive ones, these developments have important welfare implications.
    Keywords: Cooperation; identity; motivation; Reflexivity; technological progress
    JEL: A13 D03 D62 D71 I31 O10
    Date: 2016–02

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