nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒05‒28
fourteen papers chosen by
Stan C. Weeber, McNeese State University

  1. The Political Agenda Effect and State Centralization By Daron Acemoglu; James A. Robinson; Ragnar Torvik
  2. Information Disclosure under Strategy-proof Voting Rules By Salvador Barberà; Antonio Nicolò
  3. Democracy for Polarized Committees: The Tale of Blotto's Lieutenants By Alessandra Casella; Jean Francois Laslier; Antonin Macé
  4. Corruption and Bicameral Reforms By Facchini, Giovanni; Testa, Cecilia
  5. Demographics and tax competition in political economy By Tadashi Morita; Yasuhiro Sato; Kazuhiro Yamamoto
  6. Preferences and Social Influence By Chaim Fershtman; Uzi Segal
  7. Nonpoint source pollution: An experimental investigation of the Average Pigouvian Tax By Hamet SARR; Mohamed Ali BCHIR; François COCHARD; Anne ROZAN
  8. Bureaucrats or Politicians? Political Parties and Antidumping in the US By Aquilante, Tommaso
  9. Delegation and Public Pressure in a Threshold Public Goods Game: Theory and Experimental Evidence By Doruk Iris; Jungmin Lee; Alessandro Tavoni
  10. The Eurozone’s Crisis of Democratic Legitimacy. Can the EU Rebuild Public Trust and Support for European Economic Integration? By Vivien A. Schmidt
  11. Innovation and development after the earthquake in Emilia By Margherita Russo; Paolo Silvestri; Giovanni Bonifati; Elisabetta Gualandri; Francesco Pagliacci; Anna Francesca Pattaro; Alessia Pedrazzol1; Silvia Pergetti; Marco Ranuzzini; Manuel Reverberi; Giovanni Solinas; Paola Vezzani
  12. Determining influential models By Michel Grabisch; Agnieszka Rusinowska
  13. The Principle of Common Concern and Climate Change By Daniel Rais
  14. Coalitional Fairness with Participation Rates By Achille Basile; Maria Gabriella Graziano; Ciro Tarantino

  1. By: Daron Acemoglu; James A. Robinson; Ragnar Torvik
    Abstract: We provide a potential explanation for the absence of, and unwillingness to create, centralized power in the hands of a national state based on the political agenda effect. State centralization induces citizens of different backgrounds, interests, regions or ethnicities to coordinate their demands in the direction of more general-interest public goods, and away from parochial transfers. This political agenda effect raises the effectiveness of citizen demands and induces them to increase their investments in conflict capacity. In the absence of state centralization, citizens do not necessarily band together because of another force, the escalation effect, which refers to the fact that elites from different regions will join forces in response to the citizens doing so. Such escalation might hurt the citizen groups that have already solved their collective action problem (though it will benefit others). Anticipating the interplay of the political agenda and escalation effects, under some parameter configurations, political elites strategically opt for a non-centralized state. We show how the model generates non-monotonic comparative statics in response to the increase in the value or effectiveness of public goods (so that centralized states and public good provision are absent precisely when they are more beneficial for society). We also suggest how the formation of a social democratic party may sometimes induce state centralization (by removing the commitment value of a non-centralized state), and how elites may sometimes prefer partial state centralization.
    JEL: D70 H11 P48
    Date: 2016–05
  2. By: Salvador Barberà; Antonio Nicolò
    Abstract: We consider collective decision problems where some agents have private information about alternatives and others don't. Voting takes place under strategy-proof rules. Prior to voting, informed agents may or may not disclose their private information, thus eventually influencing the preferences of those initially uninformed. We provide general conditions on the voting rules guaranteeing that informed agents will always be induced to disclose what they know. In particular, we apply this general result to environments where agent's preferences are restricted to be single-peaked or separable, and characterize the strategy-proof rules that ensure information disclosure in these settings.
    Keywords: strategy-proofness, information disclosure, voting rules, Single-peaked preferences, Committees
    JEL: D70 D71 D82
    Date: 2016–05
  3. By: Alessandra Casella; Jean Francois Laslier; Antonin Macé
    Abstract: In polarized committees, majority voting disenfranchises the minority. Allowing voters to spend freely a fixed budget of votes over multiple issues restores some minority power. However, it also creates a complex strategic scenario: a hide-and-seek game between majority and minority voters that corresponds to a decentralized version of the Colonel Blotto game. We offer theoretical results and bring the game to the laboratory. The minority wins as frequently as theory predicts, despite subjects deviating from equilibrium strategies. Because subjects understand the logic of the game — minority voters must concentrate votes unpredictably — the exact choices are of secondary importance, a result that vouches for the robustness of the voting rule to strategic mistakes.
    JEL: C72 C92 D71
    Date: 2016–05
  4. By: Facchini, Giovanni; Testa, Cecilia
    Abstract: During the last decade unicameral proposals have been put forward in fourteen US states. In this paper we analyze the effects of the proposed constitutional reforms, in a setting where decision making is subject to `hard time constraints', and lawmakers face the opposing interests of a lobby and the electorate. We show that bicameralism might lead to a decline in the lawmakers' bargaining power vis-a-vis the lobby, thus compromising their accountability to voters. Hence, bicameralism is not a panacea against the abuse of power by elected legislators and the proposed unicameral reforms could be effective in reducing corruption among elected representatives.
    Keywords: Bicameralism; Corruption; Lobbying
    JEL: D72 D73
    Date: 2016–05
  5. By: Tadashi Morita (Faculty of Economics, Kindai University,); Yasuhiro Sato (Faculty of Economics, University of Tokyo); Kazuhiro Yamamoto (Graduate School of Economics, Osaka University)
    Abstract: We examine possible impacts of demographics on outcomes of capital tax compe- tition in political economy. For this purpose, we develop an overlapping generations model wherein public good provision financed by capital tax is determined by majority voting. When a population is growing, younger people represent the majority, whereas when a population is decreasing, older people represent the majority. We show that the race to the bottom is likely to emerge in the population growing economy whereas the race to the top might emerge in the population decreasing economy.
    Keywords: tax competition, majority voter, fiscal externality, political externality
    JEL: H20 J11
    Date: 2016–05
  6. By: Chaim Fershtman (Tel Aviv University); Uzi Segal (Boston College)
    Abstract: Interaction between decision makers may affect their preferences. We consider a setup in which each individual is characterized by two sets of preferences: his unchanged core preferences and his behavioral preferences. Each individual has a social influence function that determines his behavioral preferences given his core preferences and the behavioral preferences of other individuals in his group. Decisions are made according to behavioral preferences. The paper considers different properties of these social influence functions and their effect on equilibrium behavior. We illustrate the applicability of our model by considering decision making by a committee that has a deliberation stage prior to voting.
    Keywords: Risk aversion, social influence, behavioral preferences
    JEL: D81
    Date: 2016–05–20
  7. By: Hamet SARR (ENGEES, UMR GESTE, université Strasbourg); Mohamed Ali BCHIR (ENGEES, UMR GESTE, université Strasbourg); François COCHARD (CRESE EA3190 Univ. Bourgogne Franche-Comté); Anne ROZAN (ENGEES, UMR GESTE, université Strasbourg)
    Abstract: The “Average Pigouvian Tax” (APT) was proposed by Suter et al. (2008) to reduce the financial burden of the standard ambient tax. This instrument consists in a standard ambient tax divided by the number of firms, which requires polluters to cooperate in order to achieve the social optimum. To enable polluters to cooperate, communication is allowed. We introduce different types of communication: cheap talk, exogenous costly communication (communication is imposed), and endogenous costly communication (conducted on a voluntary basis after a vote). Our experiment confirms that the instrument induces polluters to reduce their emissions under cheap talk. However, we find that group emissions are less reduced when communication is costly. This result still holds even when we endogenize communication by introducing a voting phase.
    Keywords: nonpoint source pollution, ambient tax, social dilemma, cooperation, cheap talk, costly communication, vote.
    JEL: C92 H23 Q53
    Date: 2016–05
  8. By: Aquilante, Tommaso
    Abstract: Antidumping (AD) is the most widely used contingent protection measure. In the United States, key decisions on AD are delegated to the International Trade Commission (ITC), an independent agency composed of six non-elected commissioners. Using a newly collected dataset, I study the determinants of all final ITC votes on AD during the 1980-2010 period. Contrary to the view that ITC commissioners are bureaucrats who simply follow technical rules, I find that their decisions crucially depend on which party has appointed them (the selection effect) and on the trade policy interests of key senators in that party (the pressure effect): whether (Democratic) Republican-appointed commissioners vote in favor of AD depends crucially on whether the petitioning industry is key (in terms of employment) in the states represented by leading (Democratic) Republican senators.
    Keywords: Antidumping policy, Political parties
    JEL: D72 F10 F13 F14 P16
    Date: 2015–11
  9. By: Doruk Iris (Sogang University); Jungmin Lee (Sogang University and Institute for the Study of Labor (IZA)); Alessandro Tavoni (London School of Economics, Grantham Research Institute on Climate Change and Environment)
    Abstract: The provision of global public goods, such as climate change mitigation and managing fisheries to avoid overharvesting, requires the coordination of national contributions. The contributions are managed by elected governments who, in turn, are subject to public pressure on the matter. In an experimental setting, we randomly assign subjects into four teams, and ask them to elect a delegate by a secret vote. The elected delegates repeatedly play a one shot public goods game in which the aim is to avoid losses that can ensue if the sum of their contributions falls short of a threshold. Earnings are split evenly among the team members, including the delegate. We find that delegation causes a small reduction in the group contributions. Public pressure, in the form of teammates’ messages to their delegate, has a significant negative effect on contributions, even though the messages are designed to be payoff-inconsequential (i.e., cheap talk). The reason for the latter finding is that delegates tend to focus on the least ambitious suggestion. In other words, they focus on the lower of the two public good contributions preferred by their teammates. This finding is consistent with the prediction of our model, a modified version of regret theory.
    Keywords: Delegation, Cooperation, Threshold Public Goods Game, Climate Experiment, Regret Theory
    JEL: C72 C92 D81 H4 Q54
    Date: 2016–03
  10. By: Vivien A. Schmidt
    Abstract: In response to the Eurozone’s crisis of democratic legitimacy, EU institutional actors have sought to ameliorate the Eurozone’s deteriorating ‘output’ policy performance and to respond to citizens’ increasingly volatile political ‘input’ by reinterpreting the ‘throughput’ processes focused on ‘governing by the rules and ruling by the numbers’ without admitting it. Such reinterpretation ‘by stealth’ risks generating further problems for legitimacy. After defining the three criteria of legitimacy and how they play out differently for political and technical actors through fast and slow burning phases of the crisis, the paper focuses more closely on the legitimation problems of each of the major institutional actors in turn — ECB, Council, Commission, and EP — as they responded to the crisis in coordination with other policy actors and in communication to the public. The paper also offers proposals for short and medium term remedies to Eurozone problems, with a final note on the future of EU governance.
    JEL: H10 E02
    Date: 2015–09
  11. By: Margherita Russo; Paolo Silvestri; Giovanni Bonifati; Elisabetta Gualandri; Francesco Pagliacci; Anna Francesca Pattaro; Alessia Pedrazzol1; Silvia Pergetti; Marco Ranuzzini; Manuel Reverberi; Giovanni Solinas; Paola Vezzani
    Abstract: The 2012 earthquake in Emilia-Romagna (Italy) has shaken up the collective understanding on the socioeconomic importance of a vast territory that generates almost 2% of Italian GDP. The area affected by the earthquake is characterized by the presence of important industrial and agricultural districts, and by good practices of local governance that are internationally renowned. Private and public buildings, factories, offices and retail shops, historical and cultural heritage sites have been severely damaged. Not only, but it set in motion transformations in the socio-economic system that might have unexpected consequences and that undermine the quick recovery of the local system: different agents, at different levels, taking individual and collective decisions, generate a cascade of changes that interact with its evolution path. Indeed, earthquakes pose challenges, but provide unprecedented opportunities: strategic decisions by economic and political agents, newly available financial resources, coordination or lack of coordination among main stakeholders, and so on. The following paper provides an overview of the first results of Energie Sisma Emilia research project: it aims at collecting and disseminating relevant knowledge and evidence in order to design policies. In particular, it identifies the agents propelling innovation processes, and analyses their strategies in ever-changing environment. The paper starts with a socio-economic analysis of the area struck by the earthquake, followed by the results of three of the focus groups conducted. Eventually, it illustrates a specific innovation: the introduction and implementation of the digital infrastructure “Mude”.
    Keywords: earthquake and its socio-economic effects; innovation and complex systems dynamics
    JEL: O14 O35 Q54
    Date: 2016–04
  12. By: Michel Grabisch (Centre d'Economie de la Sorbonne - Paris School of Economics); Agnieszka Rusinowska (Centre d'Economie de la Sorbonne - Paris School of Economics)
    Abstract: We consider a model of opinion formation based on aggregation functions. Each player modifies his opinon by arbitrarily aggregating the current opinion of all players. A player is influential for another player if the opinion of the first one matters for the latter. A generalization of influential player to a coalition whose opinion matters for a player is called influential coalition. Influential players (coalitions) can be graphically represented by the graph (hypergraph) of influence, and the convergence analysis is based on properties of the hypergraphs of influence. In the paper, we focus on the practical issues of applicability of the model w.r.t. the standard opinion formation framework driven by the Markov chain theory. For the qualitative analysis of convergence, knowing the aggregation functions of the players is not required, but one only needs to know the influential coalitions for every player. We propose simple algorithms that permit to fully determine the influential coalitions. We distinguish three cases: the symmetric decomposable model, the anonymous model, and the general model
    Keywords: social network; opinion formation; aggregation function; influential coalition; algorithm
    JEL: C7 D7 D85
    Date: 2016–04
  13. By: Daniel Rais
    Abstract: AbstractEffective policies combating global warming and incentivising reduction of greenhouse gases face fundamental collective action problems. States defending short term interests avoid international commitments and seek to benefit from measures combating global warming taken elsewhere. The paper explores the potential of Common Concern as an emerging principle of international law, in particular international environmental law, in addressing collective action problems and the global commons. It expounds the contours of the principle, its relationship to common heritage of mankind, to shared and differentiated responsibility and to public goods. It explores its potential to provide the foundations not only for international cooperation, but also to justify, and delimitate at the same time, unilateral action at home and deploying extraterritorial effects in addressing the challenges of global warming and climate change mitigation. As unilateral measures mainly translate into measures of trade policy, the principle of Common Concern is inherently linked and limited by existing legal disciplines in particular of the law of the World Trade Organization.
    Date: 2014–06–06
  14. By: Achille Basile (Università di Napoli Federico II); Maria Gabriella Graziano (Università di Napoli Federico II and CSEF); Ciro Tarantino (Università di Napoli Federico II)
    Abstract: This paper investigates coalitional fairness in pure exchange economies with asymmetric information. We study allocations of resources which are immune from envy when comparisons take place between coalitions. The model allows negligible and non-negligible traders, only partially informed about the true state of nature at the time of consumption, to exchange any number, possibly infinite, of commodities. Our analysis is based on the Aubin approach to coalitions and cooperation, i.e. on a notion of cooperation allowing traders to take part in one or more coalitions simultaneously employing only shares of their endowments (participation rates). We introduce and study in detail the notion of coalition fairness with participation rates (or Aubin c-fairness) and show that flexibility in cooperation permits to recover the failure of fairness properties of equilibrium allocations. Our results provide applications to several market outcomes (ex-post core, fine core, ex-post competitive equilibria, rational expectations equilibria) and emphasize the consequences of the convexification effect due to participation rates for models with large traders and infinitely many commodities.
    Keywords: Aubin coalitions; Fairness; Asymmetric information; Core; Rational expectations equilibria; Lyapunov convexity theorem
    JEL: C71 D51 D82
    Date: 2016–05–17

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