nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒10‒02
fourteen papers chosen by
Stan C. Weeber, McNeese State University

  1. The Welfare Economics of Tactical Voting in Democracies: A Partial Identification Equilibrium Analysis By Herman Demeze; Issofa Moyouwou; Roland Pongou
  2. Opportunistic candidates and knowledgeable voters: A recipe for extreme views By Benček, David
  3. The third vote experiment: VAA-based election to enhance policy representation of the KIT student parliament By Tangian, Andranik S.
  4. Valence influence in electoral competition with rank objectives By Alexander, Shapoval; Alexei, Zakharov; Weber, Shlomo
  5. Local elections, political fragmentation, and service delivery in Indonesia By Blane Lewis
  6. Patience and time consistency in collective decisions By Laurent Denant-Boemont; Enrico Diecidue; Olivier L'Haridon
  7. Legislative Cycles in Semipresidential Systems By Nicolas GAVOILLE; Fabio PADOVANO
  8. Allocation rules for coalitional network games By Jean-François Caulier; Ana Mauleon; Vincent Vannetelbosch
  9. Collective Action in an Asymmetric World By Chen, Cuicui; Zeckhauser, Richard
  10. Electoral competition and political selection: An analysis of the activity of French deputies, 1958-2012 By Nicolas GAVOILLE; Marijn VERSCHELDE
  11. Social Identity and Group Contests By Zaunbrecher, Henrik; Riedl, Arno
  12. A Theory of Community Formation and Social Hierarchy By Athey, Susan; Calvano, Emilio; Jha, Saumitra
  13. Valuing Peace: The Effects of Financial Market Exposure on Votes and Political Attitudes By Jha, Saumitra; Shayo, Moses
  14. Decentralized rationing problems By Josep Maria Izquierdo Aznar; Pere Timoner Lledó

  1. By: Herman Demeze (Department of Economics, University of Bielefeld); Issofa Moyouwou (École Normale Supérieure (UYI) and THEMA, Department of Economics of Université de Cergy Pontoise); Roland Pongou (Department of Economics, University of Ottawa)
    Abstract: The fact that voters can manipulate election outcomes by misrepresenting their true preferences over competing political parties or candidates is commonly viewed as a major law of democratic voting systems. It is argued that insincere voting typically leads to suboptimal voting outcomes. However, it is also understood that insincere voting is rational behavior as it may result in the election of a candidate preferred by the voter to the candidate who would otherwise be selected. The relative magnitude of the welfare gains and losses of those who benefit from and those adversely affected by insincere voting behavior is consequently an important empirical issue. We address this question by providing exact asymptotic bounds on the welfare effects, in equilibrium, of insincere voting for an infinite class of democratic rules. We find, for instance, that preference manipulation benefits one-half to two-thirds of the population in three-candidate elections held under first-past-the-post, and one-third to one-hundred percent of the population in antiplurality elections. These bounds differ from those obtained under out-of-equilibrium manipulation. Our partial identification analysis provides a novel approach to evaluating mechanisms as a function of attitude towards risk, and it has practical implications for the choice of election rules by a mechanism designer facing a worst-case or a best-case objective. It also provides a new answer to the longstanding question of why certain rules, such as first-past-the-post, are more common in practice.
    Keywords: Democracy, tactical voting, political equilibrium, social welfare, mechanism design, worst-case-scenario, best-case-scenario, partial identification
    JEL: D60 D72 D81 H41 P48
    Date: 2016
  2. By: Benček, David
    Abstract: In recent years, a number of Western industrialized nations have experienced a notable polarization of political ideologies, and growing numbers of individuals seemingly support extreme positions. As a result, established political parties have moved to the left or right and new parties have appeared on the fringes. But why are people with extreme political views this visible in the public debate, and how are they able to move party positions further to the margins when they should be outnumbered by a moderate majority? Contradictory to the classic literature that focuses on collective action problems, this paper studies emerging effects from informational asymmetries. It extends a spatial voting model to include incompletely informed candidates and knowledgeable voters. Agent-based simulations suggest that only fringe voters benefit from distorting their opinions and dominating political discourse. At the same time, better informed candidates have a competitive advantage in elections no matter how strongly voters distort their positions.
    Keywords: spatial voting,heterogeneous actors,extreme opinions,agent-based modelling
    JEL: C63 D02 D72
    Date: 2016
  3. By: Tangian, Andranik S.
    Abstract: Since voters are often swayed more by the personal image of politicians than by party manifestos, they may cast votes that are in opposition to their policy preferences. This results in the election of representatives who do not correspond exactly to the voters' own views. An alternative voting procedure to avoid this type of election failure is proposed in [Tangian 2016a, Tangian 2016b]. It is based on the approach implemented in internet voting advice applications, like the German Wahl-O-Mat, which asks the user a number of questions on topical policy issues; the computer program, drawing on all the parties' answers, finds for the user the best-matching party, the second-best-matching party, etc. Under the proposed alternative election method, the voters cast no direct votes. Rather, they are asked about their preferences on the policy issues as declared in the party manifestos (Introduce nationwide minimum wage? Yes/No; Introduce a speed limit on the motorways? Yes/No, etc.), which reveals the balance of public opinion on each issue. These embedded referenda measure the degree to which the parties' policies match the preferences of the electorate. The parliament seats are then distributed among the parties in proportion to their indices of popularity (the average percentage of the population represented on all the issues) and universality (frequency in representing a majority). This paper reports on an experimental application of this method during the election of the Karlsruhe Institute of Technology Student Parliament on July 4-8, 2016. The experiment shows that the alternative election method can increase the representativeness of the Student Parliament. We also discuss some traits and bottlenecks of the method that should be taken into account when preparing elections.
    Keywords: policy representation,representative democracy,direct democracy,elections,coalitions,theory of voting
    JEL: D71
    Date: 2016
  4. By: Alexander, Shapoval; Alexei, Zakharov; Weber, Shlomo
    Abstract: In this paper we examine the effects of valence in a continuous spatial voting model between two incumbent parties and one potential entrant. All parties are rank-motivated and are driven by their place in the electoral competition. One of our main results is that a sufficiently wide valence gap between the incumbents yields an equilibrium in which no entry will occur. We also show that an increase in valence shifts the high-valence incumbent party closer to the median voter, while the low-valence incumbent selects a more extreme platform.
    Keywords: Candidates; Distribution of Ideal Points.; Electoral equilibrium; Electoral Game; Rank Objectives; Valence
    JEL: C72 D72
    Date: 2016–09
  5. By: Blane Lewis
    Abstract: This study examines the impact of local elections on public service delivery in Indonesia, focusing particular attention on the interaction between directly elected executives and politically fragmented parliaments. The investigation considers two common measures of political fragmentation: the number of parliament seats and the number of political parties in parliament. The analysis finds that the impact of direct elections on service access is not conditional on parliament size but that it is significantly dependent on the number of political parties represented in parliament. When parliaments comprise a small number of political parties the impact of direct elections on service delivery is positive; as the number of parties grows election benefits decline; and when the proliferation of political parties becomes particularly pronounced the influence of direct elections on service outcomes turns negative. Evidence suggests that the adverse impact of direct elections at high levels of party proliferation may be due to increased difficulties in achieving government-wide consensus on planning and executing expenditure budgets and an associated decline in spending.
    Keywords: local government, elections, political fragmentation, public service delivery, regression discontinuity, Indonesia
    JEL: H72 H75 H76
    Date: 2016
  6. By: Laurent Denant-Boemont (CREM - Centre de Recherche en Economie et Management - UR1 - Université de Rennes 1 - Université de Caen Basse-Normandie - CNRS - Centre National de la Recherche Scientifique); Enrico Diecidue (INSEAD - INSEAD); Olivier L'Haridon (CREM - Centre de Recherche en Economie et Management - UR1 - Université de Rennes 1 - Université de Caen Basse-Normandie - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We present experimental evidence regarding individual and group decisions over time. Static and longitudinal methods are combined to test four conditions on time preferences: impatience, stationarity, age independence, and dynamic consistency. Decision making in groups should favor coordination via communication about voting intentions. We find that individuals are neither patient nor consistent, that groups are both patient and highly consistent, and that information exchange between participants helps groups converge to stable decisions. Finally we provide additional evidence showing that our results are driven by the specific role of groups and not by either repeated choices or individual preferences when choosing for other subjects.
    Keywords: Time Preferences,Dynamic Consistency,present-bias,Group Decisions
    Date: 2016
  7. By: Nicolas GAVOILLE (Stockholm School of Economics in Riga, Latvia - Condorcet Center, University Rennes 1, France); Fabio PADOVANO (CREM-CNRS and Condorcet Center, University Rennes 1, France - Department of Political Sciences, University Roma Tre, Italy)
    Abstract: The Political Legislation Cycle theory predicts a peak of legislative production in the pre-electoral period, when the legislator focuses on voters’ welfare to be reelected. This paper tests the theory on the French semipresidential system, characterized by direct election of both the executive and the legislature. We use a dataset that encompasses all the approved voted legis-lation in France from 1959 to 2012 at a monthly rate, and find a dual cycle of the production of laws, connected to both the presidential and the legislative elections.
    Keywords: Political Legislation Cycle - Legislative production - Economic theory of legislation -Semipresidential government system - Hierarchical Poisson regression
    JEL: D72 C49 H61 H62
    Date: 2016–05
  8. 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
  9. By: Chen, Cuicui (Harvard University); Zeckhauser, Richard (Harvard University)
    Abstract: A central authority possessing tax and expenditure responsibilities can readily provide an efficient level of a public good. Absent a central authority, the case with climate change mitigation, voluntary arrangements must replace coercive arrangements; significant under-provision must be expected. Potential contributors have strong incentives to free ride, or to ride cheaply. International public goods are particularly challenging. The players--the nations of the world--are many and they start in quite different circumstances. Voluntary arrangements that might emerge from negotiations fall short for two reasons: First, players frame negotiations from their own standpoint, making stalemate likely. Second, the focal-point solution where contributions are proportional to benefits clashes with the disproportionate incentives little players have to ride cheaply. We identify a solution, the Cheap-Riding Efficient Equilibrium, which defines the relative contributions of players of differing size (or preference intensity) to reflect cheap riding incentives, yet still achieves Pareto optimality. Players start by establishing the Alliance/Nash Equilibrium as a base point. From that point they apply either the principles of the Lindahl Equilibrium or the Nash Bargaining Solution to proceed to the Pareto frontier. The former benefits from its focal-point properties; the latter is a standard analytic tool addressing bargaining. We apply our theory to climate change by first examining the Nordhaus Climate Club proposal. We then test the Alliance Equilibrium model using individual nations' Intended Nationally Determined Contributions pledged at the Paris Climate Change Conference. As hypothesized, larger nations made much larger pledges in proportion to their Gross National Incomes.
    JEL: C72 F53 H87
    Date: 2016–04
  10. By: Nicolas GAVOILLE (Stockholm School of Economics in Riga, Latvia - Condorcet Center, University Rennes 1, France); Marijn VERSCHELDE (EISEG School of Management, Department of Economics and Quantitative Methods, France, and Center for Economic Studies, Katholieke Universiteit Leuven, Belgium)
    Abstract: In this paper, we study the relation between electoral competition and po-litical selection, using a unique dataset containing detailed yearly information about members of the French National Assembly from 1958 to 2012. First, we innovate by using activity as a proxy for politicians’ quality. As we gathered information on the many aspects of deputies’ individual work, we use a non-parametric composite indicator of deputy activity that fully acknowledges the multidimensional nature of parliamentary work. Second, we do not impose any assumption about the relationship between electoral competition and political selection by using a fully nonparametric framework. Third, this method allows studying the evolution of the relationship between electoral competition and political selection over time. Overall, our results show that deputies elected in apriori contested districts have a higher overall activity, with the intensity of this relationship reaching its peak in the 80’s but constantly decreasing since then.
    Keywords: Competition, Election, Political Selection, Kernel Regression, Nonparametric Econometrics
    JEL: D72 J45 C14
    Date: 2016–09
  11. By: Zaunbrecher, Henrik (General Economics 1 (Micro)); Riedl, Arno (General Economics 1 (Micro))
    Abstract: Social identity has been shown to successfully enhance cooperation and effort in cooperation and coordination games. Little is known about the causal effect of social identity on the propensity to engage in group conflict. In this paper we explore theoretically and experimentally whether social identity increases investments in group contests. We show theoretically that increased social identity with the own group implies higher investments in Tullock contests. Empirically we find that induced social identity does increase group closeness but does not increase conflict investments.
    Keywords: social identity, group, contest, experiment
    JEL: C92 D03 D71 D74
    Date: 2016
  12. By: Athey, Susan (Stanford University); Calvano, Emilio (Bologna University); Jha, Saumitra (Stanford University)
    Abstract: We analyze the classic problem of sustaining trust when cheating and leaving trading partners is easy, and outside enforcement is difficult. We construct equilibria where individuals are loyal to smaller groups--communities--that allow repeated interaction. Hierarchies provide incentives for loyalty and allow individuals to trust agents to extent that the agents are actually trustworthy. We contrast these with other plausible institutions for engendering loyalty that require inefficient withholding of trust to support group norms, and are not robust to coalitional deviations. In communities whose members randomly match, we show that social mobility within hierarchies falls as temptations to cheat rise. In communities where individuals can concentrate their trading with pre-selected members, hierarchies where senior members are favored for trade sustain trust even in the presence of proximate nonhierarchical communities. We link these results to the emergence of trust in new market environments and early human societies.
    Date: 2016–08
  13. By: Jha, Saumitra (Stanford University); Shayo, Moses (Hebrew University of Jerusalem)
    Abstract: Financial markets expose individuals to the broader economy. Does participation in financial markets also lead citizens to re-evaluate the costs of conflict, their views on politics and even their voting decisions? Prior to the 2015 Israeli elections, we randomly assigned financial assets from Israeli and Palestinian companies to likely voters and gave them incentives to actively trade for up to seven weeks. Exposure to financial markets systematically shifted vote choices and increased support for peace initiatives. We delineate the mechanisms for this change and show that financial market exposure led to learning and reevaluation of the economic costs of conflict.
    JEL: C93 D72 D74 N20 O12
    Date: 2016–08
  14. By: Josep Maria Izquierdo Aznar (Universitat de Barcelona); Pere Timoner Lledó (Universitat de Barcelona)
    Abstract: Decentralized rationing problems are those in which the resource is not directly assigned to agents, but first allocated to groups of agents and then divided among their members. Within this framework, we define extensions of the constrained equal awards, the constrained equal losses and the proportional rules. We show that the first two rules do not preserve certain essential properties and prove the conditions under which both rules do preserve those properties. We characterize the extension of the proportional rule as the only solution that satisfies individual equal treatment of equals. We prove that the proportional rule is the only solution that assigns the same allocation regardless of whether the resource is distributed directly to agents or in a decentralized manner (with agents grouped). Finally, we analyse a strategic game based on decentralized rationing problems in which agents can move freely across groups to submit their claims.
    Keywords: Strategic rationing, decentralized rationing, equal awards rule, equallosses rule, proportional rule, a priori unions.
    JEL: D63
    Date: 2016

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