nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒06‒14
eleven papers chosen by
Stan C. Weeber, McNeese State University

  1. Coattail effects and electoral coordination By Ignacio Lago; Marina Costa Lobo; Santiago Lago-Peñas
  2. Democratic Legitimation of Trade Policy Tomorrow - TTIP, Democracy and Market in the Swiss Constitution By Daniel Rais
  3. Pathbreakers? Women’s Electoral Success and Future Political Participation By Sonia Bhalotra; Irma Clots-Figueras; Lakshmi Iyer
  4. Heterogeneous Motives in the Trust Game: A Tale of Two Roles By Espín, Antonio M.; Exadaktylos, Filippos; Neyse, Levent
  5. Synchronization in human decision making By Yi-Fang Liu; Jørgen Vitting Andersen; Maxime Frolov; Philippe de Peretti
  7. Political Economy of Redistribution By Diermeier, Daniel; Egorov, Georgy; Sonin, Konstantin
  8. What is the Causal Impact of Knowledge on Preferences in Stated Preference Studies? By Nick Hanley; Mikolaj Czajkowski
  9. Is globalisation really fuelling populism? By Gros, Daniel
  10. Sharing Skills and Needs between Providers and Users of Climate Information to Create Climate Services: Lessons from the Northern Adriatic Case Study By Giannini, Valentina; Bellucci, Alessio; Torresan, Silvia
  11. Groups, Norms and Endogenous Membership: Towards a Socially Inclusive Economics By Raul V. Fabella

  1. By: Ignacio Lago; Marina Costa Lobo; Santiago Lago-Peñas
    Abstract: In this paper we challenge the conventional wisdom about the political consequences of electoral systems. We show that the psychological effects of an electoral system manifest themselves in founding elections in those countries in which there are coattail effects running from the more important to the less important offices. The artificial deflationary pressures induced by coattail effects make the psychological effects of electoral systems in elections for less important offices increase coordination failures after the founding election. The empirical evidence comes from district-level data in legislative, regional and European elections in five countries.
    Keywords: Coattail effects, disproportionality, electoral systems, psychological effects, wasted votes.
    JEL: D71 D72
    Date: 2016–05
  2. By: Daniel Rais
    Abstract: Abstract Free Trade Agreements (FTAs) are increasingly more concerned with regulatory convergence, rather than trade liberalisation through elimination of tariffs. This appears to result more often in so-called dynamic trade agreements, which still evolve after adoption. Further economic integration in democracies, however, depends on the support of the constituency. This article takes a closer look at the democratic legitimation of global economic integration in a case study on Switzerland. It finds that the current principles and institutions of democracy in Switzerland are unlikely to fully accommodate the new regulatory challenges of dynamic FTAs.
    Date: 2015–11–09
  3. By: Sonia Bhalotra (University of Essex); Irma Clots-Figueras (Universidad Carlos III de Madrid); Lakshmi Iyer (Harvard Business School)
    Abstract: We investigate whether the event of a woman being competitively elected as a state legislator encourages the subsequent political participation of women, using a regression discontinuity design on constituency level data from India. We find that female incumbents are more likely than male incumbents to recontest and that there is a decline in the entry of new women candidates. This decline is most pronounced in states with entrenched gender bias and in male-headed parties, suggesting an intensification of barriers against women in these areas. Similar results for(mostly male) Muslim candidates indicate the presence of institutionalized demand-side barriers rather than gender-specific preferences and constraints.
    Keywords: Political participation, women, candidates, gender bias, backlash, minority representation, regression discontinuity, India
    JEL: J16 J71 P16
  4. By: Espín, Antonio M.; Exadaktylos, Filippos; Neyse, Levent
    Abstract: Trustful and trustworthy behaviors have important externalities for the society. But what exactly drives people to behave in a trustful and trustworthy manner? Building on research suggesting that individuals’ social preferences might be a common factor informing both behaviors, we study the impact of a set of different motives on individuals’ choices in a dual-role Trust Game (TG). We employ data from a large-scale representative experiment (N = 774), where all subjects played both roles of a binary TG with real monetary incentives. Subjects’ social motives were inferred using their decisions in a Dictator Game and a dual-role Ultimatum Game. Next to self-interest and strategic motives we consider preferences for altruism, spitefulness, egalitarianism, and efficiency. We demonstrate that there exists considerable heterogeneity in motives in the TG. Most importantly, among individuals who choose to trust as trustors, social motives can differ dramatically as there is a non-negligible proportion of them who seem to act out of (strategic) self-interest whereas others are driven more by efficiency considerations. Subjects’ elicited trustworthiness, however, can be used to infer such motivations: while the former are not trustworthy as trustees, the latter are. We discuss that research on trust can benefit from adding the second player’s choice in TG designs.
    Keywords: trust game,dictator game,ultimatum game,social preferences,self-interest
    Date: 2016
  5. By: Yi-Fang Liu (College of Management and Economics - Tianjin University); Jørgen Vitting Andersen (Centre d'Economie de la Sorbonne); Maxime Frolov (Centre d'Economie de la Sorbonne); Philippe de Peretti (Centre d'Economie de la Sorbonne)
    Abstract: Just like soldiers crossing a bridge in sync can lead to a catastrophic failure, we show via experiments, theory, and simulations, how synchronization in human decision making can lead to extreme outcomes. Individual decision making and risk taking are well known to be gender dependent. Much less is however understood about gender's impact on the creation of collective risk through aggregate decision making, where the decision of one individual can affect the decision making of other individuals, eventually leading to synchronization in behavior. To study the formation of collective risk created due to synchronization in human decision making, we have devised a series of experiments that can be analyzed and understood within a game theoretical framework. In the experiments each individual in groups of either men or women decide to buy or sell a financial asset based on an information set containing past price behavior. Risk can be generated collectively through coordination in the aggregate decision making, which leads to a price formation far from the fundamental value of the asset. Here we show how collective risks can be generated in groups of both genders, but the pathway to formation of collective risks happens through an individual risk taking which are different for groups composed of men respectively women. A priori we find that it is impossible to know whether a given group will engage in the formation of collective risk, but via a fluctuation based game theoretical framework we are able to estimate the likelihood that it will happen. Our results highlight some of the foundations for creation of excessive collective risks relevant for example in the understanding of financial systemic risks
    Keywords: collective decision making; synchronization; agent based modeling
    JEL: G1 G12 G14
    Date: 2016–03
  6. By: Arzu KAZAZ (Selcuk University); Süleyman KARAÇOR (Selcuk University); METE KAZAZ (Selcuk University)
    Abstract: Increasing their effectiveness and audience with each passing day, works of advertisement are today an indispensable way for political parties to express themselves, leave a positive impression on the electorate, and reach potential voters. Without doubt, political party advertisements differ in certain aspects from commercials in which an ordinary product or service is promoted. In this sense, trying a product by whose advertisement we are affected could be relevant, whereas voting for a political party only because we like its advertisement is not a very common case. Multiple variables of voting behavior have been the topic of various scientific studies. The aim of the present study in the basic sense is to examine several indicators used by political advertising on the basis of imposing an idea, belief, or point of view and to present what kind of effects the indicators used in political advertising intend to leave on the voters. Semiotic analysis is used as the method of the study, and the sample examined consists of the advertisement films of the Republican People's Party (CHP) with the theme ‘WE are here, WE will do’ used for the General elections of November 1, 2015.
    Keywords: Television, Political Advertisement, CHP, Semiotics.
  7. By: Diermeier, Daniel; Egorov, Georgy; Sonin, Konstantin
    Abstract: It is often argued that additional constraints on redistribution such as granting veto power to more players in the society makes property better protected from expropriation. We use a legislative bargaining-type model to demonstrate that this intuition may be ‡flawed. Increasing the number of veto players or raising the supermajority requirement for redistribution may reduce protection on the equilibrium path. The reason is the existence of two distinct mechanisms of property rights protection. One is formal constraints that allow individuals or groups to block any redistribution that is not in their favor. The other occurs in equilibrium where players without such powers protect each other from redistribution. Players without formal veto power anticipate that the expropriation of other similar players will ultimately hurt them and thus combine their infl‡uence to prevent redistributions. In a stable allocation, the society exhibits a “"class" ”structure with class members having equal wealth, and strategically protecting each other from redistribution.
    Keywords: institutions; legislative bargaining; political economy; Property rights
    JEL: D72 D74 P48
    Date: 2016–05
  8. By: Nick Hanley (Department of Geography and Sustainable Development, University of St. Andrews); Mikolaj Czajkowski (University of Warsaw, Department of Economic Sciences, Poland)
    Abstract: This paper reports the results of a stated preference experiment designed to test for how information provided in a survey affects knowledge, and how knowledge affects preferences for a public good. A novel experimental design allows us to elicit subjects’ ex ante knowledge levels about a good’s attributes, exogenously vary how much new objective information about these attributes we provide to subjects, elicit subjects’ valuation for the good, and elicit posterior knowledge states about the same attributes. We find evidence of incomplete learning and fatigue: as subjects are told more information, their marginal learning rates decrease. We find there is no marginal impact of knowledge on the mean nor the variance of WTP for changes in the environmental good; but that ex ante knowledge does affect stated WTP. Our results are consistent with preference formation models of confirmation bias, costly search, or timing differences in learning and preference formation. Our results raise questions about the purpose and effects of providing information in stated preference studies
    Keywords: Learning, Information, Behavioral Economics, Decision Making Under Uncertainty
    JEL: D83 D81 Q51
    Date: 2016–04
  9. By: Gros, Daniel
    Abstract: On both sides of the Atlantic, populism on the left and the right is on the rise. Its most visible standard-bearer in the United States is Donald Trump, the Republican Party’s presumptive presidential nominee. In Europe, there are many strands – from Spain’s leftist Podemos party to France’s right-wing National Front – but all share the same opposition to centrist parties and to the establishment in general. What accounts for voters’ growing revolt against the status quo?
    Date: 2016–05
  10. By: Giannini, Valentina; Bellucci, Alessio; Torresan, Silvia
    Abstract: The need to cope with the expected impacts of climate change on socio-ecological systems calls for a closer dialogue between climate scientists and the community of climate information users (e.g. decision makers belonging to public institutions). We describe an interactive process designed to bridge this gap by establishing a two-way communication, based on mutual learning. We analyse the need of climate information for the integrated assessment of climate change impacts on the coastal zone of the Northern Adriatic Sea, which is considered to be particularly vulnerable to several climate-related phenomena, e.g. heavy rainfall events, pluvial flood, and sea-level rise, causing potentially high damages to coastal eco-systems and urban areas (e.g. acqua alta in the Venice Lagoon). A participatory process is designed engaging representatives from both the scientific and local stakeholders communities, and facilitated by a boundary organization, embodied by the Euro-Mediterranean Center on Climate Change.
    Keywords: Decision Making, Climate Products, Climate Services, Risk Assessment, Northern Adriatic, Participatory Process, CLIM-RUN, Environmental Economics and Policy, O1, Q2, R5,
    Date: 2016–05–26
  11. By: Raul V. Fabella (School of Economics, University of the Philippines Diliman; National Academy of Science and Technology)
    Abstract: In Part I, we argue that Economics must outgrow the narrow confines of Neo-Classical Economics to embrace ‘sociality’ first championed by Herbert Simon in the mid-1950s and now by a growing number of economists under the banner of Social Economics. We contend here that Neo-Classical Economics is incomplete, rather than wrong. Firstly any alternative model must subsume the Neo-Classical model as a special case even as it embraces conceptual promontories from other social science disciplines, viz., groups, norms and sanctions. Secondly, it must be couched in a language familiar to the economics profession? maintain optimizing behavior and equilibrium analysis. In Part II, we construct a formal model where the agent is at once a private entity and a member of a social group; his utility is inclusive combining the agent’s private utility over goods (the Neo-Classical utility) and the utility the he derives from being a member, viz., access to group’s collective good. As a member, he commits to support the procurement of the group’s collective good and submits to a system of norms and to the corresponding self-organized sanctions regime punishing violation of group norms. The agent solves a sequence of optimization problems: the first determines his optimal consumption basket given his budget constraint (net of group contribution), prices in the market location of the group; this gives his inclusive indirect utility; the second determines his optimal market hours by maximizing his indirect inclusive utility subject to time constraint and the market wage rate; this gives his doubly indirect inclusive utility; thirdly, he maximizes his inclusive doubly indirect utility with respect to the monetary contribution of the group given the sanctions for norm violation. The choice of social group follows from a rank order of groups by greatest inclusive utility an agent can attain in each competing social group. Finally, we show how the agent’s relative weighting of his private and group commitment may wax and wane depending upon the stakes of the inter-group competition.
    Keywords: Sociality, groups, norms, choice of groups, compliance with norms, inter-group competition
    JEL: D01 D11
    Date: 2016–05

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