nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒03‒29
thirteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Unanimous Rules in the Laboratory By Laurent Bouton; Aniol Llorente-Saguer; Frédéric Malherbe
  2. Endogenous Repeated Cooperation and Surplus Distribution - An Experimental Analysis By di Guida, Sibilla; Han, The Anh; Kirchsteiger, Georg; Lenaerts, Tom; Zisis, Ioannis
  4. Conformity, information and truthful voting By Bernado Moreno; María del Pino Ramos-Sosa; Ismael Rodríguez-Lara
  5. Multi-winner scoring election methods: Condorcet consistency and paradoxes By Mostapha Diss; Ahmed Doghmi
  6. Organized Crime, Violence, and Politics By Alberto Alesina; Salvatore Piccolo; Paolo Pinotti
  7. Agendas in legislative decision-making By HORAN, Sean
  8. Guns, Latrines, and Land Reform: Private Expectations and Public Policy By Michael Kremer; Jack Willis
  9. Voters' Information, Corruption, and the Efficiency of Local Public Services By Graziano Abrate; Federico Boffa; Fabrizio Erbetta; Davide Vannoni
  10. Immigration to the U.S.: A problem for the Republicans or the Democrats? By Anna Maria Mayda; Giovanni Peri; Walter Steingress
  11. Harmful transparency in teams By Kanti Parimal Bag; Nona Pepito
  12. Endogenous Correlated Network Dynamics By Frank Page; Rui Gong; Myrna Wooders
  13. Proportional payoffs in legislative bargaining with weighted voting: a characterization By Maria Montero

  1. By: Laurent Bouton; Aniol Llorente-Saguer; Frédéric Malherbe
    Abstract: We study the information aggregation properties of unanimous voting rules in the laboratory. In line with theoretical predictions, we find that majority rule with veto power dominates unanimity rule. We also find that the strategic voting model is a fairly good predictor of observed subject behavior. There are, however, cases where organizing the data seems to require a mix of strategic and sincere voting. This pattern of behavior would imply that the way majority rule with veto power is framed may significantly affect the outcome of the vote. Our data strongly supports such an hypothesis.
    JEL: C92 D70
    Date: 2016–01
  2. By: di Guida, Sibilla; Han, The Anh; Kirchsteiger, Georg; Lenaerts, Tom; Zisis, Ioannis
    Abstract: This paper investigates experimentally how the endogenous group formation combined with the possibility of repeated interaction impacts cooperation levels and surplus distribution. We developed a Surplus Production Distribution Game where the cooperation of four agents is needed to produce a surplus. In case of cooperation, two of the four subjects, the distributors, decided how much of surplus each of them wanted to give to the two other agents, the receivers. This game was played repeatedly with different matching procedures. In the Re-match Treatment (RT) the subjects got randomly re-matched every round, while in the Endogenous-match Treatment (ET) a group was maintained as long as its members cooperated. There was also a Base treatment (BT) where cooperation was exogenously enforced. We found that the distributor's contributions were higher in the ET and the RT than in the BT - unsurprisingly, receivers' possibility to refuse cooperation led to more equal surplus distributions. But contrary to commonly hold beliefs, the possibility of repeated interaction did not lead to higher cooperation levels and more equal allocations of the surplus. Instead, endogenous group formation combined with the possibility of repeated interaction led to self-selection of the subjects in the ET. The endogenous group duration varied drastically between different groups in the ET, with long-lived groups exhibiting contributions and cooperation levels higher than in the RT, while short-lived groups showed contributions and cooperation levels lower than in the RT. Furthermore, for given contribution levels, receivers were more likely to refuse cooperation when their average relationship length was short. This shows that long-lived groups consisted of generous distributors and not so demanding receivers, while ungenerous distributors and demanding receivers formed short-lived groups. Hence, the possibility of repeated interaction does not necessarily increase cooperation and efficiency levels when combined with endogenous group formation. Rather, such a situation might lead to self-selection of agents.
    Keywords: group formation; repeated cooperation; surplus distribution
    JEL: C92 D03
    Date: 2016–03
  3. By: Monica Martinez-Bravo (CEMFI, Centro de Estudios Monetarios y Financieros); Priya Mukherjee (College of William and Mary); Andreas Stegmann (CEMFI, Centro de Estudios Monetarios y Financieros)
    Abstract: A large theoretical literature argues that legacies of non-democratic regimes can affect the quality of governance in new democracies. However, the empirical evidence is scarce. This paper exploits a natural experiment that took place in the Indonesian democratic transition: the Soeharto-regime mayors were allowed to finish their five year terms before being replaced by new leaders. Since mayors' political cycles were not synchronized, this event generated exogenous variation in how long the agents of the old regime remained in their position during the democratic transition. The results suggest that districts which had an old-regime mayor for longer exhibit worse governance outcomes, lower public good provision, and greater electoral support for Soeharto's party. These effects persist several years after the oldregime mayors are no longer in office. The results are consistent with the hypothesis that slower transitions towards democracy allow the old-regime elites to find ways of capturing democracy in the medium and long run.
    Keywords: Institutions, elections, elite capture.
    JEL: D72 H75 O12 P16
    Date: 2016–01
  4. By: Bernado Moreno (Department of Economic Theory, Universidad de Málaga); María del Pino Ramos-Sosa (Department of Economic Theory, Universidad de Málaga); Ismael Rodríguez-Lara (Department of Economics, Middlesex University London)
    Abstract: We induce conformity in a binary-decision voting game by assuming that agents may derive some utility by voting the same option that others. Theoretically, we show that truthful voting is the unique equilibrium without conformity. Introducing conformity enlarges the set of equilibria, which includes voting profiles in which agents do not necessarily vote for their preferred option. If agents are informed that others will vote truthfully, truthful voting is more pervasive in equilibrium. In our setting, the effects of conformity and information depend on the voting rule and the preferred option of each agent. We provide empirical support for our theoretical predictions by means of a laboratory experiment.
    Keywords: Issue-Silence; truthful voting, conformity, information, experimental evidence.
    JEL: C91 C92 D71 D72
    Date: 2016–01
  5. By: Mostapha Diss (Université de Lyon, Lyon F- 69007, France; CNRS, GATE L-SE, Ecully, F- 69130, France; Université J. Monnet, Saint-Etienne, F- 42000, France); Ahmed Doghmi (University of Rabat, Mohammadia School of Engineering, the QSM Laboratory, Avenue Ibn Sina B.P. 765 Agdal, 10100 Rabat, Morocco)
    Abstract: The goal of this paper is to propose a comparison of four multi-winner voting rules, k-Plurality, k-Negative Plurality,k-Borda, and Bloc, which can be considered as generalisations of well-known single-winner scoring rules. The first comparison is based on the Condorcet committee efficiency which is defined as the conditional probability that a given voting rule picks out the Condorcet committee, given that such a committee exists. The second comparison is based on the likelihood of two paradoxes of committee elections: The Prior Successor Paradox and the Leaving Member Paradox which occur when a member of an elected committee leaves. In doing so, using the well-known Impartial Anonymous Culture condition, we extend the results of Kamwa and Merlin (2015) in two directions. First, our paper is concerned with the probability of the paradoxes no matter the ranking of the leaving candidate. Second, we do not only focus on the occurrence of these paradoxes when one wishes to select a committee of size k = 2 out of m = 4 candidates but we consider more values of k and m.
    Keywords: Multi-winner voting rules, committee, Condorcet committee efficiency, paradoxes, probability
    JEL: D71 D72
    Date: 2016
  6. By: Alberto Alesina (Harvard University, IGIER, CEPR, and NBER); Salvatore Piccolo (Università Cattolica del Sacro Cuore di Milano and CSEF); Paolo Pinotti (Bocconi University, fRDB, and BAFFI-CAREFIN Center)
    Abstract: We investigate how criminal organizations strategically use violence to influence elections in order to get captured politicians elected. The model offers novel testable implications about the use of pre-electoral violence under different types of electoral systems and different degrees of electoral competition. We test these implications by exploiting data on homicide rates in Italy since 1887, comparing the extent of “electoral-violence cycles” between areas with a higher and lower presence of organized crime, under democratic and non-democratic regimes, proportional and majoritarian elections, and between contested and non-contested districts. We provide additional evidence on the influence of organized crime on politics using parliamentary speeches of politicians elected in Sicily during the period 1945-2013.
    Keywords: organized crime, electoral violence, voting, political discourse
    JEL: K42 D72
    Date: 2016–03–11
  7. By: HORAN, Sean
    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
  8. By: Michael Kremer; Jack Willis
    Abstract: Dynamically and statically optimal Pigouvian subsidies on durables will differ in a growing economy. For durables with positive externalities, such as sanitation, statically optimal subsidies will typically grow. However, in a dynamic game, governments can most cheaply induce optimal purchasing time by committing to eventually reduce subsidies. If governments cannot commit, there may be multiple, Pareto-ranked equilibria. The presence of multiple subsidizing bodies, including foreign donors, makes commitment more difficult. As a result, consumers may actually delay purchase, rationally anticipating growing subsidies. In the extreme, the benefits of foreign subsidies for durables that create positive externalities may be more than fully offset by such delays in private investment. For durables with negative externalities, such as guns, delays between the announcement and implementation of taxes or regulation may bring forward purchase, potentially causing policymakers who would otherwise prefer such policies to abandon them. Political actors may also be able to shape others’ policy preferences by changing private expectations. For example, a political party that announces an intent to redistribute land may reduce current owners' investment incentives, thus reducing the benefits of maintaining existing property rights and making land reform more attractive to the median voter.
    JEL: H23 H42 O12 O18
    Date: 2016–01
  9. By: Graziano Abrate (Department of Economics and Business, University of Piemonte Orientale, Italy); Federico Boffa (School of Economics and Managment, Free University of Bolzano, Italy); Fabrizio Erbetta (Department of Economics and Business, University of Piemonte Orientale, Italy); Davide Vannoni (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)
    Abstract: This paper explores the link between voters’ information, corruption and efficiency in the context of a career concern model where politically connected local monopolies are in charge of the provision of a local public service. We find that both a corrupt environment and a low level of voters’ information on managerial actions induce managers to reduce effort levels, thereby contributing to drive down efficiency. We test our predictions using data on solid waste management services provided by a large sample of Italian municipalities. We estimate a stochastic cost frontier model that provides robust evidence that services provided in more corrupt regions and in regions with low voters’ information are substantially less cost efficient. We show that the negative impact of a corrupt environment is weaker for municipalities ruled by left-wing parties, while the positive impact of voters’ information is larger if the waste collection service is managed by limited liability companies. We finally quantify potential cost savings associated to operating in a less corrupt environment and in one in which voters are more informed through a simulation on six major Italian cities. The magnitude of the figures suggests that effective anti-corruption measures, and/or carefully designed incentives for citizens to acquire information, can generate significant economic benefits.
    Keywords: Corruption, Voters’ Information, Efficiency, Solid Waste.
    JEL: D24 D72 D73 L25 Q53
    Date: 2016–03
  10. By: Anna Maria Mayda; Giovanni Peri; Walter Steingress
    Abstract: We empirically analyze the impact of immigration to the U.S. on the share of votes to the Republicans and Democrats between 1994 and 2012. Our analysis is based on variation across states and years – using data from the Current Population Survey merged with election data – and addresses the endogeneity of immigrant flows using a novel set of instruments. On average across election types, immigration to the U.S. has a significant and negative impact on the Republican vote share, consistent with the typical view of political analysts in the U.S. This average effect – which is driven by elections in the House – works through two main channels. The impact of immigration on Republican votes in the House is negative when the share of naturalized migrants in the voting population increases. Yet, it can be positive when the share of non-citizen migrants out of the population goes up and the size of migration makes it a salient policy issue in voters' minds. These results are consistent with naturalized migrants being less likely to vote for the Republican party than native voters and with native voters' political preferences moving towards the Republican party because of high immigration of non-citizens. This second effect, however, is significant only for very high levels of immigrant presence.
    JEL: F22
    Date: 2016–01
  11. By: Kanti Parimal Bag (Department of Economics - NUS - National University of Singapore); Nona Pepito (ESSEC - ESSEC Business School - Essec Business School - Economics Department - Essec Business School, THEMA - Théorie économique, modélisation et applications - Université de Cergy Pontoise - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In a two-period continuous effort investment game as in Mohnen, et al. (2008), we demonstrate that peer transparency can be strictly harmful. This contrasts with Mohnen et al.'s result that transparency, through the observability of interim efforts, induces more effort and is thus beneficial if team members are inequity-averse. If, instead, preferences are standard utilitarian, the marginal benefit is decreasing and marginal cost is increasing in a player's own effort, then players' collective and individual efforts are strictly less with transparency than under non-transparency.
    Keywords: free-riding,Transparency, team, perfect substitution
    Date: 2016–01–26
  12. By: Frank Page (Indiana University); Rui Gong (Indiana University); Myrna Wooders (Vanderbilt University)
    Abstract: We model the structure and strategy of social interactions prevailing at any point in time as a directed network and address the following question: given the rules of network and coalition formation, preferences of individuals over networks, strategic behavior of coalitions in forming networks, and the trembles of nature, what network and coalitional dynamics are likely to emergence and persist. We formulate the problemas a dynamic, stochastic game and v equilibrium (in network and coalition formation strategies), (ii) together with the trembles of nature, this correlated stationary equilibrium determines an equilibrium Markov process of network and coalition formation, and (iii) this endogenous Markov process possesses a finite set of ergodic measures, and generates a finite, disjoint collection of nonempty subsets of networks and coalitions, each constituting a basin of attraction. Moreover, we extend to the setting of endogenous Markov dynamics the notions of pairwise stability (Jackson-Wolinsky, 1996) and the path dominance core (Page Wooders, 2009a). We show that in order for any network-coalition pair to emerge and persist, it is necessary that the pair reside in one of finitely many basins of attraction. The results we obtain here build on Page and Wooders (2009a)and the seminal contributions of Jackson and Watts (2002), Konishi and Ray (2003), and Dutta, Ghosal, and Ray (2005).
    Keywords: KEYWORDS: games of network formation, stationary Markov correlated equilibrium, equilibrium Markov process of network formation, basins of attraction, Harris decomposition, ergodic probability measures, dynamic path dominance core,dynamic pairwise stability.
    JEL: C7 C6
    Date: 2016–03–13
  13. By: Maria Montero (School of Economics, University of Nottingham)
    Abstract: We examine the relationship between voting weights and expected equilibrium payoffs in legislative bargaining and provide a necessary and sufficient condition for payoffs to be proportional to weights. This condition has a natural interpretation in terms of the supply and demand for coalition partners. An implication of this condition is that Snyder et al.Â’s (2005) result, that payoffs are proportional to weights in large replicated games, does not necessarily extend to the smaller games that arise in applications. Departures from proportionality may be substantial and may arise even in well-behaved (homogeneous) games.
    Keywords: legislative bargaining, weighted voting, proportional payoffs
    Date: 2016–02

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