nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒07‒23
fourteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Render Unto Caesar: Taxes, Charity, and Political Islam By Maleke Fourati; Gabriele Gratton; Pauline Grosjean
  2. Global Samaritans? Donor Election Cycles and the Allocation of Humanitarian Aid By Kurt Annen; Scott Strickland
  3. Evolution of Cooperation in Public Good Game By Colasante, Annarita
  4. I lie? We lie! Why? Experimental evidence on a dishonesty shift in groups By Kocher, Martin G.; Schudy, Simeon; Spantig, Lisa
  5. The determinants of pro-environmental concerns of political parties during electoral periods By Constantin-Marius Apostoaie
  6. Coordinated Adoption of Social Innovations By Dominik Karos
  7. Technology and Innovation Policies for Small and Medium-Sized Enterprises in East Asia By Intarakumnerd, Patarapong; Goto, Akira
  8. When the State Gives Back: Trust and Trustworthiness after a Land Restitution Program By Francesco Bogliacino; Gianluca Grimalda; Laura Jiménez; Daniel Reyes Galvis; Cristiano Codagnone
  9. Social surplus determines cooperation rates in the one-shot Prisoner's Dilemma By Luca Rigotti
  10. Migration State and Welfare State: Competition vs. Coordination in Economic Unions By Assaf Razin
  11. Regional Banking Instability and FOMC Voting By Eichler, Stefan; Lähner, Tom; Noth, Felix
  12. Fair share and social effciency: a mechanism in which peers decide on the payoff division By Lu Dong; Rod Falvey; Shravan Luckraz
  13. Diversity in one dimension alongside greater similarity in others: Evidence from FP7 cooperative research teams By Alexander Coad; Sara Amoroso; Nicola Grassano
  14. Collective Choice in Dynamic Public Good Provision: Real versus Formal Authority By Nicolas Lambert; George Georgiadis; Renee Bowen

  1. By: Maleke Fourati (School of Economics, UNSW Business School, UNSW Australia); Gabriele Gratton (School of Economics, UNSW Business School, UNSW Australia); Pauline Grosjean (School of Economics, UNSW Business School, UNSW Australia)
    Abstract: Data from the first post-Arab Spring elections reveal that support for Islamic parties came from richer districts and individuals. We show that standard public finance arguments help explain the voting pattern in these elections and others in the Muslim world. Our model predicts that a voter’s probability to vote for a religious party (i) increases in income for the poorest voters, but possibly decreases in income for the richest; (ii) is greater for voters in richer districts; and (iii) increases with the voter’s religiosity. We test these predictions on original micro-level data in a nationally representative sample of 600 individuals in 30 districts in Tunisia. Our empirical results align with our predictions and suggest that belonging to the middle class and living in a richer district together affect voting decisions more than being a religious voter. We also test for other possible factors affecting voting decisions, such as education, or attitudes towards corruption or towards the West. Finally, we document similar patterns in other key elections in the Muslim world.
    Keywords: Religion, religious parties, political preferences, democratic politics, charitable organizations
    JEL: D72 Z12
    Date: 2016–07
  2. By: Kurt Annen (Department of Economics and Finance, University of Guelph); Scott Strickland (Ministry of Community and Social Services, Government of Ontario)
    Abstract: This paper finds a large causal donor election cycle effect in humanitarian aid allocations: On average, humanitarian aid increases by 54% in the year before elections. Our identifcation strategy consists of focusing on donors with fixed election dates, making elections clearly exogenous. Furthermore, we find large interaction effects with natural and human disasters. This evidence is consistent with our theory that incumbent governments responding to humanitarian disasters can increase voter support for their party and insure against the political fall-out of not being seen as representatives of a country with global interests and influence. However, it is important to stress that despite our findings, human and natural disasters explain a substantially larger share of the overall variation in humanitarian aid observed in the data.
    Keywords: Humanitarian aid, election cycles, aid allocation
    JEL: F35 D72 H5 O19
    Date: 2016
  3. By: Colasante, Annarita
    Abstract: This paper presents an investigation about cooperation in a Public Good Game using an Agent Based Model calibrated on experimental data. Starting from the experiment proposed in Colasante and Russo (2016), we analyze the dynamic of cooperation in a Public Good Game where agents receive an heterogeneous income and choose both the level of contribution and the distribution rule. The starting point is the calibration and the output validation of the model using the experimental results. Once tested the goodness of fit of the Agent Based Model, we run some policy experiment in order to verify how each distribution rule, i.e. equidistribution, proportional to contribution and progressive, affects the level of contribution in the simulated model. We find out that the share of cooperators decreases over time if we exogenously set the equidistribution rule. On the contrary, the share of cooperators converges to 100% if we impose the progressive rule. Finally, the most interesting result refers to the effect of the progressive rule. We observe that, in the case of high inequality, this rule is not able to reduce the heterogeneity of income.
    Keywords: Public Good Game, Cooperation, Social Influence
    JEL: C63 D71 H41
    Date: 2016
  4. By: Kocher, Martin G.; Schudy, Simeon; Spantig, Lisa
    Abstract: Unethical behavior such as dishonesty, cheating and corruption occurs frequently in organizations or groups. Recent experimental evidence suggests that there is a stronger inclination to behave immorally in groups than individually. We ask if this is the case, and if so, why. Using a parsimonious laboratory setup, we study how individual behavior changes when deciding as a group member. We observe a strong dishonesty shift. This shift is mainly driven by communication within groups and turns out to be independent of whether group members face payoff commonality or not (i.e. whether other group members benefit from one’s lie). Group members come up with and exchange more arguments for being dishonest than for complying with the norm of honesty. Thereby, group membership shifts the perception of the validity of the honesty norm and of its distribution in the population.
    Keywords: dishonesty; lying; group decisions; communication; norms; experiment
    JEL: C91 C92 D03
    Date: 2016–07–14
  5. By: Constantin-Marius Apostoaie (Integrated Center for Studies in Environmental Science for the Northeast Region, Alexandru Ioan Cuza University of Iasi)
    Abstract: The electoral process in a democratic country has a significant impact on its economy. Researchers even speak about the emergence of a new concept of "election-year economics" in economic policies, especially for countries with young democracies. Nevertheless, the implications of political factors in the electoral periods don’t resume to the economic aspects of the society; they make themselves noticed also on other non-economic issues such as: environmental protection, quality of life etc. If prior to the election period, the focus of the political parties and also of the general public is mainly on primary policies (including fiscal policies, budgetary or exchange rate policies), other secondary policies fade in the picture, among which we include the environmental policy. Nevertheless, during political campaigns prior to elections, some parties and their affiliated politicians may display a kind of pro-environmental behaviour only to convince some of the voters to cast them a ballot. If the specialized literature has looked well enough into the determinants of citizens’ pro-environmental behavior, this is not the case of the drivers that push political parties towards adopting environmental attitudes. The lack of knowledge in this regard is even more pronounced when dealing with Eastern European countries that were, in many cases, excluded from the research (given the inconsistency in and lack of data). The methodological approach consists in a regression analysis between the political parties’ tendencies towards environmental decisions and actions, on the one hand, and various economic, social and environmental conditions. Using the data provided by the Manifesto Project Dataset (CMP), the websites and platforms of the Romanian political parties and the input from interviews with politicians as well as ENGO specialists, covering the period 1990-2015, the paper investigates the “greening†of Romanian political parties prior to national election periods and the determinant factors in this regard. The preliminary results suggest that political parties’ environmental concern is strongly correlated with their political ideology, but also reveal some specific features that describe Romania’s young democratic system. The paper contributes to the existing literature by filling a gap related to the investigated subject (political parties’ environmental policy offer) and to the geographical coverage. Acknowledgement: This work is financially supported through the UAIC Grant for Young Researchers competition of the Alexandru Ioan Cuza University of Iaşi, Romania (Grant registration number: GI-2015-24).
    Keywords: environment, environmental policy, political parties, electoral periods, electoral cycle, political ideology, political greening
    JEL: Q58 D78 H79
  6. By: Dominik Karos
    Abstract: The members of a society are faced with the decision whether or not to participate in an anti-government protest. Their utilities depend on their own decision but also on those of their neighbors in an underlying social network. They randomly observe other people's decisions, gather information on who is already active, and base their decision on their information. The model uses a Markov process (that depends on the underlying social network) to analyze who will become active over time. Two new features are essential: first, only very mild assumptions about the underlying social network are made, in particular agents can be entirely heterogeneous. Second, individuals are allowed to coordinate their decision if they mutually observe each other. The government can use political violence in order to change people's utility from being active. The probability of a revolution can thereby be reduced in the short run, but not in the long run. Under political repression protests do not increase gradually, but suddenly; and the conditional probability of a quick revolution given a protest increases if the regime turns violently against the protesters. Since large jumps in the number of activists depend on their capability to coordinate, the repression of political activism is more effective in countries where social media are not easily accessible. The findings are illustrated by data on the number of protests and revolutions world-wide depending on a country's number on the Political Terror Scale.
    Keywords: Social Networks, Coordination, Strong Nash Equilibrium, Innovation Diffusion, Unanticipated Revolutions, Political Repression
    JEL: C72 D85 O33
    Date: 2016–07–06
  7. By: Intarakumnerd, Patarapong (Asian Development Bank Institute); Goto, Akira (Asian Development Bank Institute)
    Abstract: Policies for stimulating technological development and innovation in small and medium-sized enterprises can be divided into three groups. Supply-side policies aim at increasing firms’ incentives to invest in innovation by reducing costs. Demand-side policies are public actions to induce innovation and/or speed up the diffusion of innovation. Systemic policies focus on strengthening interactive learning between actors in innovation systems. Policies can be implemented through various instruments comprising tax incentives, grants or direct subsidies, low-interest loans, and the government’s direct equity participation. These instruments have pros and cons. The experiences of four late-industrializing East Asian economies—Taipei,China; Singapore; Malaysia; and Thailand—provide key lessons. Firms at different levels of technological and innovative capability need different policy instruments. The more successful economies have a higher level of flexibility and policy coordination and learning. The amount, duration, and continuity of government supporting schemes are crucial. Policy makers must have a deep understanding of what constitutes innovations and innovation systems, and how they evolve over time. Innovation financing policies require other corresponding policy initiatives to make them successful. Lastly, institutional factors do shape the choices and effective implementation of these policies.
    Keywords: technological development; East Asia SMEs; diffusion of innovation; demand-side policies
    JEL: D22 L25 O31
    Date: 2016–07–20
  8. By: Francesco Bogliacino; Gianluca Grimalda; Laura Jiménez; Daniel Reyes Galvis; Cristiano Codagnone
    Abstract: Recent research in Economics has sought to understand the effects of exposure to violence on individual preferences, including pro-social behavior. Here, we assess the impact on pro-social behaviour of a governmental program to compensate victims of forced displacement. All our subjects have been officially recognized as victims of a conflict, and, as such, are eligible to apply for restitution of their land within the "Victims’ Law" (Ley de Víctimas, Bill 1448/2011). The key independent variable of our analysis is whether a subject has obtained land back within this or similar programs. Our dependent variables are a subject's trust and trustworthiness in unknown persons, as measured in a modified version of a Trust Game. We focus on inter-personal trust and trustworthiness because of their well-documented positive effect on economic development. Our design includes a treatment in which subjects vote on their most preferred outcomes to understand whether forms of consultative democracy can engender higher mutual trust. We find that land restitution significantly raises trustworthiness, while there is no effect on trust. This confirms previous insights that trust and trustworthiness tap into different aspects of pro-sociality. Voting does not improve either trust or trustworthiness. The results are robust to controlling for socio-economic status within regression analysis and to the omitted variable bias.
    Keywords: trust, trustworthiness, displacement, reparations.
    JEL: C93 I38 Q15
    Date: 2016–07–12
  9. By: Luca Rigotti
    Abstract: We provide evidence on how cooperation rates vary across payoff parameters in the Prisoner’s Dilemma (PD), using four one-shot games that differ only in the payoffs from mutual cooperation. In our experiment, participants play only the PD game, and play the game once and only once, so there are no potential confounds or methodological issues. Our results show that higher monetary payoffs from cooperation are associated with substantially higher cooperation rates, which increase monotonically from 23% to 60%. Participants’ beliefs about cooperation rates track closely actual cooperation rates: higher cooperation is expected from others when mutual cooperation payoffs are higher. This is true also for participants who, in a follow-up experiment, only make guesses about the choices of others.
    Date: 2016–01
  10. By: Assaf Razin (tel aviv university)
    Abstract: Within a standard general equilibrium political economy model the paper analyzes how redistribution policies and migration policies are determined with an economic union. The competition among member states leads to over generosity of the welfare state and unskilled biased migration, relative to the same economic union under coordination. Application to EU and the US is suggested.
    Date: 2016
  11. By: Eichler, Stefan; Lähner, Tom; Noth, Felix
    Abstract: This study analyzes if regionally affiliated Federal Open Market Committee (FOMC) members take their districts' regional banking sector instability into account when they vote. Considering the period from 1978 to 2010, we find that a deterioration in a district's bank health increases the probability that this district's representative in the FOMC votes to ease interest rates. According to member-specific characteristics, the effect of regional banking sector instability on FOMC voting behavior is most pronounced for Bank presidents (as opposed to governors) and FOMC members who have career backgrounds in the financial industry or who represent a district with a large banking sector.
    Keywords: FOMC voting,regional banking sector instability,lobbying
    JEL: E43 E52 E58 G21
    Date: 2016
  12. By: Lu Dong (School of Economics, University of Nottingham); Rod Falvey (Bond Business School, Bond University); Shravan Luckraz (School of Economics, University of Nottingham, Ningbo China)
    Abstract: We propose and experimentally test a mechanism for a class of principal-agent problems in which agents can observe each others' efforts. In this mechanism each player costlessly assigns a share of the pie to each of the other players, after observing their contributions, and the final distribution is determined by these assignments. We show that cooperation can be achieved under this simple mechanism and, in a controlled laboratory experiment, we find that players use a proportional rule to reward others in most cases and that the players' contributions improve substantially and almost immediately with 80% of players contributing fully.
    Keywords: mechanism design, experimental economics, fairness, distributive justice
    Date: 2016–10
  13. By: Alexander Coad (European Commission – JRC); Sara Amoroso (European Commission – JRC); Nicola Grassano (European Commission – JRC)
    Abstract: Although diversity between team members may bring benefits of new perspectives, nevertheless, what holds a team together is similarity. We theorise that diversity in one dimension is traded off against diversity in another. Our analysis of collaborative research teams that received FP7 funding presents robust results that indicators of diversity in several dimensions (diversity of organizational form (universities, firms, etc.), diversity in nationality, and inequality in project funding share) are negatively correlated with each other.
    Keywords: diversity, collaborative teams, FP7 research funding
    JEL: O30 M14 O19
    Date: 2016–06
  14. By: Nicolas Lambert (Stanford University); George Georgiadis (Northwestern University, Kellogg School); Renee Bowen (Stanford University)
    Abstract: Two heterogeneous agents exert effort over time to complete a project and collectively decide its scope. A larger scope requires greater cumulative effort and delivers higher benefits upon completion. To study the scope under collective choice, we derive the agents' preferences over scopes. The efficient agent prefers a smaller scope, and preferences are time-inconsistent: as the project progresses, the efficient agent's preferred scope shrinks, whereas the inefficient agent's preferred scope expands. In equilibrium without commitment, the efficient agent obtains his ideal project scope with either agent as dictator and under unanimity. In this sense, the efficient agent always has real authority.
    Date: 2016

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