nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒09‒25
seven papers chosen by
Stan C. Weeber, McNeese State University

  1. Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure By Autor, David; Dorn, David; Hanson, Gordon; Majlesi, Kaveh
  2. Ideological Perfectionism By Chen, Daniel L.; Michaeli, Moti; Spiro, Daniel
  3. Coalitional Bargaining with Consistent Counterfactuals By Roberto Burguet; Ramon Caminal
  4. Wolf Pack Activism By Brav, Alon; Dasgupta, Amil; Mathews, Richmond
  5. The effect of sequentiality and heterogeneity in network formation games By Liza Charroin
  6. Complicity without Connection or Communication By Abigail Barr; Georgia Michailidou
  7. Preventing chiefs from being chiefs: An ethnography of a co-operative sheet-metal factory By Stéphane Jaumier

  1. By: Autor, David (MIT Department of Economics); Dorn, David (University of Zurich); Hanson, Gordon (UC San Diego); Majlesi, Kaveh (Department of Economics, Lund University)
    Abstract: Has rising trade integration between the U.S. and China contributed to the polarization of U.S. politics? Analyzing outcomes from the 2002 and 2010 congressional elections, we detect an ideological realignment that is centered in trade-exposed local labor markets and that commences prior to the divisive 2016 U.S. presidential election. Exploiting the exogenous component of rising trade with China and classifying legislator ideologies by their congressional voting record, we find strong evidence that congressional districts exposed to larger increases in import competition disproportionately removed moderate representatives from office in the 2000s. Trade-exposed districts initially in Republican hands become substantially more likely to elect a conservative Republican, while trade-exposed districts initially in Democratic hands become more likely to elect either a liberal Democrat or a conservative Republican. Polarization is also evident when breaking down districts by race: trade-exposed locations with a majority white population are disproportionately likely to replace moderate legislators with conservative Republicans, whereas locations with a majority non-white population tend to replace moderates with liberal Democrats. We further contrast the electoral impacts of trade exposure with shocks associated with generalized changes in labor demand and with the post-2006 U.S. housing market collapse.
    Keywords: Import competition; Political polarization; Congressional elections; Trade exposure; China
    JEL: D72 F14 H11
    Date: 2016–09–05
  2. By: Chen, Daniel L.; Michaeli, Moti; Spiro, Daniel
    Abstract: Studying a high-stakes field setting, we examine which individuals, on an ideological scale, conform more to the opinion of others. In the U.S. Courts of Appeals, legal precedents are set by ideologically diverse and randomly composed panels of judges. Using exogenous predictors of ideology and rich voting data we show that ideological disagreements drive dissents against the panel’s decision, but ideologically extreme judges are caving in: they are the least likely to dissent and their voting records are the least correlated with their predicted ideology. Meanwhile, moderately ideological judges are dissenting the most despite evidence that they are more often determining the opinion. Our theoretical analysis shows that these findings are most consistent with a model of decision making in the presence of peer pressure with a concave cost of deviating from one’s ideological convictions – perfectionism. This result presents a critique of a standard assumption in economics – that the cost of deviating from one’s bliss point is convex – with fundamental implications for decision making in social and political settings and for the empirical predictions of theoretical models in these domains.
    Keywords: Judicial decision making, group decision making, ideology, peer pressure.
    JEL: D7 K00 Z1
    Date: 2016–09
  3. By: Roberto Burguet; Ramon Caminal
    Abstract: We propose a new solution concept for TU cooperative games in characteristic function form, the SCOOP, that builds on the Nash Bargaining Solution (NBS ), adding to it a consistency requirement for negotiations inside every coalition. The SCOOP specifies the probability of success and payoffs of each coalition. Players share the surplus of a coalition according to the NBS, with disagreement payoffs that are computed as the expectation of payoffs in other coalitions, using some common probability distribution, which in turn is derived from the prior distribution. The predicted outcome can be probabilistic or deterministic, but only the efficient coalition can succeed with probability one. We discuss necessary and sufficient conditions for an efficient solution. In either case, the SCOOP always exists, is generically unique, easy to compute, and exhibits smooth comparative statics. We also discuss non-cooperative implementation of the SCOOP.
    Keywords: cooperative games, coalitional bargaining, endogenous disagree- ment payoffs, consistent beliefs
    JEL: C71 C78
    Date: 2016–09
  4. By: Brav, Alon; Dasgupta, Amil; Mathews, Richmond
    Abstract: Blockholder monitoring is key to corporate governance, but blockholders large enough to exercise significant unilateral influence are rare. Mechanisms that enable small blockholders to exert collective influence are therefore important. It is alleged that institutional blockholders sometimes implicitly coordinate their interventions, with one acting as "lead" activist and others as peripheral"wolf pack" members. We present a model of wolf pack activism. Our model formalizes a key source of complementarity across the engagement strategies of activists and highlights the catalytic role played by the leader. We also characterize share acquisition in pack formation, providing testable implications on ownership and price dynamics.
    JEL: G34
    Date: 2016–09
  5. By: Liza Charroin (Univ Lyon, ENS de Lyon, GATE L-SE UMR 5824, F-69342 Lyon, France)
    Abstract: In the benchmark model of Bala and Goyal (2000) on network formation, the equilibrium network is asymmetric and unfair as agents have different payoffs. While they are prominent in reality, asymmetric networks do not emerge in the lab mainly because of fairness concerns. We extend this model with a sequential linking decision process to ease coordination and with heterogeneous agents. Heterogeneity is introduced with the presence of a special agent who has either a higher monetary value or a different status. The equilibrium is asymmetric and unfair. Our experimental results show that thanks to sequentiality and fairness concerns, individuals coordinate on fair and efficient networks in homogeneous settings. Heterogeneity impacts the network formation process by increasing the asymmetry of networks but does not decrease the level of fairness nor efficiency
    Keywords: Network formation, sequentiality, heterogeneity, fairness, asymmetry
    JEL: C72 C92 D85 Z13
    Date: 2016
  6. By: Abigail Barr (School of Economics, University of Nottingham); Georgia Michailidou (University of Nottingham, School of Economics)
    Abstract: We use a novel experiment to investigate whether people aim to coordinate when, to do so, they have to lie; and are more willing to lie when, in doing so, they are aiming to coordinate with a potential accomplice, i.e., another with whom coordination would be beneficial and who is facing the same individual and mutual incentives and the same moral dilemma. We find that people often aim to coordinate when they have to lie to do so and that having a potential accomplice increases willingness to lie even when that potential accomplice is a stranger and communication is not possible.
    Keywords: complicity, lying, coordination, die rolling task
    Date: 2016
  7. By: Stéphane Jaumier (Grenoble École de Management (GEM))
    Abstract: Knowledge of how democracy and equality are practically achieved within member-based organisations such as cooperatives remains underdeveloped in the literature. In order to investigate this question, the present study is based on a piece of ethnographic work, namely one year of participant observation as a factory worker, which I conducted within a French cooperative sheet-metal factory. Pondering the presence within the cooperative of seemingly powerless chiefs, I draw on the works of French anthropologist Pierre Clastres (1934–1977) on stateless societies in order to study co-operators in their 'continual effort to prevent chiefs from being chiefs' (Clastres, 1987: 218). Three types of day-today practices appear to be central for members of the cooperative in circumventing the coalescence of power in the hands of their chiefs: a relentlessly voiced refusal of the divide between chiefs and lay members; a permanent requirement for accountability, and endless overt critique towards chiefs; and the use of schoolboy humour. The case, as analysed through a Clastrian lens, evidences a novel avenue that is conducive to avoiding the fate of oligarchisation within democratic organisations. Indeed, it shows how power can be kept at bay by being named and then embodied in a figure, who is eventually – through mostly informal practices – stripped of all authority. In addition, it suggests that our understanding of cooperation could be greatly improved if researchers' dominant focus on governance was complemented by studies anchored in the everyday experience of co-operators.
    Keywords: ethnography,hierarchy,worker co-operatives,Pierre Clastres,organisational democracy
    Date: 2016–08–19

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