nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒04‒23
fourteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Social Mobility and Stability of Democracy: Re-evaluating De Tocqueville By Acemoglu, Daron; Egorov, Georgy; Sonin, Konstantin
  2. Multi-attribute compositional voting advice applications (MacVAAs) : a methodology for educating and assisting voters and eliciting their preferences By Korthals R.A.; Levels M.
  3. The political economy of multilateral aid funds By Simon, Jenny; Valasek, Justin Mattias
  4. Are E-Petitions Operative for Change? On the Effectiveness and the Transformative Potential of E-Petitioning By Oya Morva
  5. Center-State Political Transfer Cycles in India By Manjhi, Ganesh; Keswani Mehra, Meeta
  6. Gathering support from rivals: the two agent case with random order By Bannikova, Marina; Giménez Gómez, José M. (José Manuel)
  7. Measuring the extent and implications of corporate political connections in prewar Japan By Tetsuji Okazaki; Michiru Sawada
  8. Domestic facilitators and impediments to EU democracy promotion in its Eastern neighbourhood: The cost-benefit balance of norm adoption By Buscaneanu, Sergiu
  9. Mass Media, Instrumental Information, and Electoral Accountability By Christian Bruns; Oliver Himmler
  10. Happiness and Preferences in a Legality Social Dilemma: Comparing the Direct and Indirect Approach By Leonardo Becchetti; Germana Corrado; Vittorio Pelligra; Fiammetta Rossetti
  11. Reward and punishment in a team contest By Heine F.A.; Strobel M.
  12. Preferential Attachment and Pattern Formation in R&D Networks - Plausible explanation or just a widespread myth? By Michael Fritsch; Muhamed Kudic
  13. Allocation rules for coalitional network games By Jean-François Caulier; Ana Mauleon; Vincent Vannetelbosch
  14. Rethinking the political economy of decentralization: how elections and parties shape the provision of local public goods. By Raúl A. Ponce-Rodríguez; Charles R. Hankla; Jorge Martinez-Vazquez; Eunice Heredia-Ortiz

  1. By: Acemoglu, Daron; Egorov, Georgy; Sonin, Konstantin
    Abstract: An influential thesis often associated with De Tocqueville views social mobility as a bulwark of democracy: when members of a social group expect to join the ranks of other social groups in the near future, they should have less reason to exclude these other groups from the political process. In this paper, we investigate this hypothesis using a dynamic model of political economy. As well as formalizing this argument, our model demonstrates its limits, elucidating a robust theoretical force making democracy less stable in societies with high social mobility: when the median voter expects to move up (respectively down), she would prefer to give less voice to poorer (respectively richer) social groups. Our theoretical analysis shows that in the presence of social mobility, the political preferences of an individual depend on the potentially conflicting preferences of her "future selves", and that the evolution of institutions is determined through the implicit interaction between occupants of the same social niche at different points in time. When social mobility is endogenized, our model identifies new political economic forces limiting the amount of mobility in society - because the middle class will lose out from mobility at the bottom and because a peripheral coalition between the rich and the poor may oppose mobility at the top.
    Keywords: De Tocqueville; democracy; dynamics.; institutions; Social mobility; stability
    JEL: D71 D74
    Date: 2016–04
  2. By: Korthals R.A.; Levels M. (GSBE)
    Abstract: This paper introduces a technique to elicit voter preferences, by integrating multi-attribute compositional analyses Macs with a voting advice application VAA. The technique requires users to make trade-offs between different positions on a single issue, and between different issues. MacVAAs more closely resemble the electoral decision-making process in elections in which more than two parties participate than classic VAAs. MacVAAs also overcomes the assumption of issue orthogonality and assumption of rationality that classic VAA erroneously make. Results of a field application of the technique during the 2012 Dutch parliamentary elections in 2012 are presented. Advantages and disadvantages are discussed.
    Keywords: Economic Methodology: General; Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior;
    JEL: B40 D72
    Date: 2016
  3. By: Simon, Jenny; Valasek, Justin Mattias
    Abstract: In 2014 over $60 billion was mobilized to help developing nations mitigate climate change, an amount equivalent to the GDP of Kenya. Interestingly, breaking from the traditional model of bilateral aid, donor countries distributed nearly fifty percent of their aid through multilateral aid funds (OECD, 2015). In this paper, we show that by delegating aid spending to an international fund, donor countries mitigate a "hold-up" problem that occurs when donor countries are tempted to allocate aid based on, say, a regional preference. That is, under bilateral aid, donor-country bias decreases the incentive of recipient countries to invest in measures such as good governance that increase the effectiveness of aid. By delegating allocation decisions to a fund, however, donor countries commit to allocating aid via centralized bargaining, which provides recipient countries with an increased incentive to invest. Additionally, we show that allocating funding by majority rule further increases recipient-country investment, since higher investment increases the probability that a recipient's project will be selected by the endogenous majority coalition, and detail conditions under which majority is the optimal voting rule.
    Keywords: Aid policy,Climate change,International organizations
    JEL: F35 O19 H87
    Date: 2016
  4. By: Oya Morva (Istanbul Universty)
    Abstract: During the last decade, with the progress of new information and communication technologies, electronic petitioning systems have emerged as a productive way for individuals to communicate with the authorities or policy makers about diverse issues. Although, they are designed to enable citizens to influence decision–making in the policy making process, there is an ongoing discussion on their effectiveness: one side of this discussion regards e-petitions as a new form of activism that enables greater political participation, and hence fortifies democracy. According to this view, e-petition campaigns can be an operative tool to help citizens to put issues on the political agenda, they are capable of producing a desired result, and thus they can cause a change over and transform political decisions. On the other side of this discussion, there is an opposite view that considers the transformative potential of an online petition as very moderate. Within this study, this transformative potential, the effectiveness of e-petitions, is discussed and analysed. With this aim, the paper uses the case studies from to determine the extent to which e-petitioning worked when ending a campaign successfully.
    Keywords: online petitions, e-petitions, e-petitioning, effectiveness,
  5. By: Manjhi, Ganesh; Keswani Mehra, Meeta
    Abstract: This paper attempts to answer two basic questions -- first, whether an election affects the transfers to the states through different component heads such as - grants from the center, loan from the center, finance commission transfer and grants in aids. Secondly, whether different transfer variables and the characteristics of the incumbent government will be able to create the possibility of retaining the power? Using the Arellano-Bond dynamic panel-data estimation methods (GMM) on a balanced panel data from 1980-2010 for 16 Indian states, we find that the right wing and coalition government is less likely to transfer the resources to the states. However, the state level ruling party which is either the same party at the center or ally get more transfers from the center than a non-coalition ruling party. Unlike the political budget cycles in the most literatures, the political transfer cycle is visible in the post-election period, which supports the possibility that while the announcements and promises are made before the election, the actual realization is observed only after the election. This may also be on account of attracting votes in the legislative assembly elections at the state level. The paper is extended to the logit and probit specifications of the model. It is found that; higher voters’ turnout in the state is more likely to win the election. Further, inflation reduces the possibility of winning the election, whereas more experienced government has a higher probability of winning the election. Moreover, our result also show that, the right wing government is more likely to win the election as they also behave more opportunistically and the coalition government where states are its allies lowers the possibility of winning the election.
    Keywords: Opportunist Incumbent; Political Budget Cycle, Political Transfer Cycle, Indian Federation
    JEL: E6 H5 H7
    Date: 2016–04–10
  6. By: Bannikova, Marina; Giménez Gómez, José M. (José Manuel)
    Abstract: Which alternative is selected when voters are called to participate in a sequential voting? Does the ordering matter? The current approach is the first attempt to analyze these questions. Specifically, we propose a two- alternative sequential voting procedure in which two voters are randomly ordered. Each voter has complete information about the preference of both of them. The alternative is implemented if there is unanimity. We obtain that the most patient individual has some advantage in the election, but it is not enough to guarantee that his most-preferred alternative will be selected. The probability to vote first also plays a central role, since the election also depends on the voting order. Keywords: Sequential Voting; Random order; Sub-game perfect equilibrium
    Keywords: Elecció (Psicologia), Eleccions, 32 - Política,
    Date: 2015
  7. By: Tetsuji Okazaki; Michiru Sawada
    Abstract: This paper explores the extent of political connections of firms, and examines their implications on firm values, using firm-level data from prewar Japan. We collect the data of directors, their positions in the House of Representatives, stock prices and financial performance, on publicly traded companies in late 1920s and early 1930s Japan. It is found that almost 20% of the publicly traded companies had political connections through politician directors. Especially, firms in the regulated industries such as the electric power and railroad, were more likely to have political connections. Overall, there is no evidence that connections with politics added firm values. On the other hand, with respect to those firms that newly obtained political connections, we found that the stock returns improved from the pre-election period to the post-election period.
    Date: 2016–03
  8. By: Buscaneanu, Sergiu
    Abstract: This paper argues that the balance between the size of EU incentives and the costs of democratic transformation has impeded democratic consolidation in Eastern ENP countries. Whereas the cost-benefit balance of norm adoption appears to be a relevant predictor of regime trajectories in this region, patterns of economic development do not match those of political regimes. Institutional design seems to fit better regime dynamics in Eastern ENP countries, but it is also possible that the nature of main political institutions depends on the regime. The road from institutions to the regime is a two-way road. Finally, the number of parties in power within executives does not say much about regime trajectories. The degree of a pro-European (Western) stance of the governing party or coalition must be incorporated into the analysis. To this end, a coalitional government that had a strong pro-EU identity proved to be a promising facilitator of external democracy promotion efforts.
    Keywords: cost-benefit balance,structures,institutions,actors,regimes,Eastern ENP countries
    Date: 2016
  9. By: Christian Bruns (University of Goettingen); Oliver Himmler (Max Planck Institute for Research on Collective Goods, Bonn)
    Abstract: Journalism is widely believed to be crucial for holding elected officials accountable. At the same time economic theory has a hard time providing an instrumental explanation for the existence of “accountability journalism”. According to the common Downsian reasoning, rational voters should not be willing to pay for information out of purely instrumental motives because the individual probabilities of casting the decisive vote are typically very low. We show that this rationale does not apply when a group of voters shares a common goal such as accountability and information is delivered via mass media. In contrast to the pessimistic Downsian view, rational voters can have a considerable willingness to pay for the provision of instrumental information in these scenarios. Our model thus reconciles the rational voter approach with the common perception of journalism as a watchdog that holds elected officials accountable.
    Keywords: accountability, elections, information, media
    JEL: D72 D83 H41
    Date: 2016–01
  10. By: Leonardo Becchetti (CEIS, University of Rome Tor Vergata); Germana Corrado (DEF, University of Rome Tor Vergata); Vittorio Pelligra (University of Cagliari, CRENoS); Fiammetta Rossetti (DEF, University of Rome Tor Vergata)
    Abstract: We investigate players’ preferences in a multiplayer prisoner’s dilemma by comparing results from a direct (satisfaction based) and an indirect (choice based) approach. Both approaches provide strong evidence of preference heterogeneity, with players who cooperate above median being less affected in their choice by monetary payoffs vis-à-vis the public good component. The combination of a legality frame plus a conformity information design reduces further the relative preference (satisfaction) for the non-cooperative choice for such players. Our findings support the hypothesis that (part of the) players have, in addition to the standard self-interest component, an other-regarding preference argument that is further satisfied in the legality frame plus conformity design.
    Keywords: Analysis of Collective Decision-Making, Corruption, Laboratory Experiment, Legality Game, Redistribution, Conformity.
    Date: 2016–03–25
  11. By: Heine F.A.; Strobel M. (GSBE)
    Abstract: A team contest entails both public good situations within the teams as well as a contest across teams. In an experimental study, we analyse behaviour in such a team contest when allowing to punish or to reward other group members. Moreover, we compare two types of contest environment One in which two groups compete for a prize and another one in which we switch off the between-group element of the team contest. Unlike what experimental studies in isolated public goods games indicate, we find that reward giving, as opposed to punishing, induces higher contributions to the group project. Furthermore, comparing treatment groups, expenditures on rewarding other co-players are significantly higher than those for punishing. This is particularly pronounced for the between-group contest.
    Keywords: Cooperative Games; Design of Experiments: Laboratory, Group Behavior; Microeconomic Behavior: Underlying Principles;
    JEL: C92 D01 C71
    Date: 2015
  12. By: Michael Fritsch (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Muhamed Kudic (Stifterverband für die Deutsche Wissenschaft, Wissenschaftsstatistik, Essen)
    Abstract: The emergence and solidification of network patterns is typically explained by the preferential attachment rule. The underlying logic is that a small number of actors which are characterized by an above average degree attract links at a higher rate than others. We raise the question as to what extent the wide spread preferential attachment explanation holds true in the context of inventor networks. To shed some light on this issue we investigate co-patenting relationships among inventors in the field of laser technology in West Germany from 1961 to 2005. From a system perspective, the development of the inventor networks is in line with the pattern that is implied by the preferential attachment logic. However, we find high levels of fluidity of micro-level relationships that put the typical transaction cost and trust-based explanation of tie formation processes into question.
    Keywords: Preferential attachment, inventor networks, system stability, micro-level instability, laser industry
    JEL: O3 R1 L6 D2 D8
    Date: 2016–04–14
  13. By: Jean-François Caulier (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Ana Mauleon (CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain, CEREC - Université Saint-Louis - Bruxelles); Vincent Vannetelbosch (CORE - Center of Operation Research and Econometrics [Louvain] - UCL - Université Catholique de Louvain, CEREC - Université Saint-Louis - Bruxelles)
    Abstract: Coalitional network games are real-valued functions defined on a set of players organized into a network and a coalition structure. We adopt a flexible approach assuming that players organize themselves the best way possible by forming the efficient coalitional network structure. We propose two allocation rules that distribute the value of the efficient coalitional network structure: the atom-based flexible coalitional network allocation rule and the player-based flexible coalitional network allocation rule.
    Keywords: cooperative game theory, allocation rules,Coalition, Networks
    Date: 2015–11
  14. By: Raúl A. Ponce-Rodríguez; Charles R. Hankla; Jorge Martinez-Vazquez; Eunice Heredia-Ortiz
    Abstract: As more and more of the world’s states devolve power and resources to sub-national governments, decentralization has emerged as one of the most important global trends of the new century. Yet there is still no consensus concerning the benefits of decentralization and how to design institutions that can realize these benefits. In this paper, we investigate the political conditions under which the decentralization of authority will improve the delivery of public goods. Building off Oates’ “decentralization theorem” to include inter-jurisdictional spillovers, we develop a new theory suggesting that the interaction of democratic decentralization (the popular election of sub-national governments) and party centralization (the power of national party leaders over sub-national office-seekers) will produce the best service delivery outcomes. To test this argument empirically, we develop a new dataset of sub-national political institutions. Our analyses, which examine educational and health service delivery in 135 countries across 30 years, provide support for our theoretical expectations.
    Keywords: decentralization
    JEL: H70 H71 H72 H73 H74 H77
    Date: 2016–04

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.