nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒10‒09
fifteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Teams contribute more and punish less By Auerswald, Heike; Schmidt, Carsten; Thum, Marcel; Torsvik, Gaute
  2. What makes voters turn out: The effects of polls and beliefs By Agranov, Marina; Goeree, Jacob K.; Romero, Julian; Yariv, Leeat
  3. Simple Sufficient Conditions for Weak Reciprocal Upper Semi-Continuity in Extended Games By Blake Allison; Adib Bagh; Jason Lepore
  4. Gender and Agency within the Household: Experimental Evidence from Pakistan By Farah Said; Giovanna d'Adda; Marcel Fafchamps; Uzma Afzal
  5. Dynamic Coalitions and Communication: Public versus Private Negotations By Baron, David P.; Bowen, Renee; Nunnari, Salvatore
  6. Shapley Allocation — the effect of Services on Diversification By Peter Mitic; Bertrand K. Hassani
  7. Autonomous coalitions By Stéphane Gonzalez; Michel Grabisch
  8. Electoral Incentives and Firm Behavior: Evidence from U.S. Power Plant Pollution Abatement By Matthew Doyle; Corrado Di Maria; Ian Lange; Emiliya Lazarova
  9. Snap Judgments: Candidate Likeability or Productivity? By Casey, Katherine
  10. Veto Players and Policy Entrepreneurship By Hirsch, Alexander V.; Shotts, Kenneth W.
  11. Imagined vs. Actual "Others": An Experiment on Interethnic Giving Afghanistan By Luke Condra; Mohammad Isaqzadeh; Sera Linardi
  12. Domestic politics and the formation of international environmental agreements By Carmen Marchiori; Simon Dietz; Alessandro Tavoni
  13. Housing Supply Elasticity and Rent Extraction by State and Local Governments By Diamond, Rebecca
  14. Collective Choice in Dynamic Public Good Provision: Real versus Formal Authority By Bowen, T. Renee; Georgiadis, George; Lambert, Nicolas S.
  15. Democratic reform and opposition to government expenditure : evidence from nineteenth-century Britain By Chapman, Jonathan

  1. By: Auerswald, Heike; Schmidt, Carsten; Thum, Marcel; Torsvik, Gaute
    Abstract: Challenges in global politics like climate change, maritime piracy and fighting highly contagious diseases concern global public goods. The related policy decisions are mostly made by teams. In contrast, economic models of global public goods typically assume a single rational decision-maker. We use a laboratory experiment to compare team decisions to decisions of individuals in a finitely repeated public good game with and without a costly punishment option. Teams of three participants coordinate on decisions either by majority or unanimity rule. We find that in absence of a punishment option teams contribute more to the public good than individuals. With a punishment option subsequently to the contribution decision team treatments exhibit a less frequent use of anti-social punishment and lower levels of social as well as anti-social punishment. Extreme preferences for punishment are eliminated by the majority decision rule. Overall, team decisions are closer to the social optimum and teams yield higher net payoffs when compared to individuals.
    Keywords: Public Good,Group Decision-Making,Punishment,Experiment,Öffentliche Güter,Entscheidungsverhalten in Gruppen,Bestrafung,Experiment
    JEL: C72 C92 H41
    Date: 2016
  2. By: Agranov, Marina; Goeree, Jacob K.; Romero, Julian; Yariv, Leeat
    Abstract: We use laboratory experiments to test for one of the foundations of the rational voter paradigm - that voters respond to probabilities of being pivotal. We exploit a setup that entails stark theoretical effects of information concerning the preference distribution (as revealed through polls) on costly participation decisions. We find that voting propensity increases systematically with subjects' predictions of their preferred alternative's advantage. Consequently, pre-election polls do not exhibit the detrimental welfare effects that extant theoretical work predicts. They lead to more participation by the expected majority and generate more landslide elections.
    Keywords: Collective Choice,Polls,Strategic Voting
    JEL: C92 D02 D72
    Date: 2016
  3. By: Blake Allison (Department of Economics, Emory University); Adib Bagh (Department of Economics and Mathematics, University of Kentucky); Jason Lepore (Department of Economics, California Polytechnic State University)
    Abstract: We provide a sufficient condition for a game with discontinuous payoffs to be weakly reciprocally upper semi-continuous in mixed strategies. This condition is imposed on the individual payoffs and not on their sum, and it can be readily verified in a large class of games even when the sum of payoffs in such games is not upper semi-continuous. We apply our result to establish the existence of mixed strategy equilibria in probabilistic voting competitions when candidates have heterogenous beliefs about the distribution of the voters.
    Keywords: Better reply security, extended games, Weak reciprocal upper semi-continuity, Nash equilibria, Probabilistic voting models.
    JEL: C63 C72 D72
    Date: 2016
  4. By: Farah Said; Giovanna d'Adda; Marcel Fafchamps; Uzma Afzal
    Abstract: Theoretical and empirical work on intra-household decision making capture empowerment through bargaining weights given to individual preferences, and infer such weights from household consumption allocations. In this paper we test two key hypotheses underlying this work: first, that spousal influence is the same for all private consumption goods; and second, that women have pent up demand for pure agency. We use data from a survey and a novel laboratory experiment implemented with adult couples in Pakistan. We find that women's influence on household decisions is decreasing in the importance of the decision. We find no evidence that women have pent up demand for agency. Instead, women are less willing to pay for agency when facing an unknown man. We interpret this evidence as suggesting that women in our study population have internalized gender norms, and that these norms regulate interactions between genders most strongly outside of the household. We also find little evidence, within our experimental setting, that willingness to pay for agency is affected by the instrumental value of agency.
    Date: 2016
  5. By: Baron, David P. (Stanford University); Bowen, Renee (Stanford University); Nunnari, Salvatore (Bocconi University)
    Abstract: We present a laboratory experiment to study the formation of dynamic coalitions in a bargaining setting where the current status quo policy is determined by the policy implemented in the previous period. Our main experimental treatment is the ability of subjects to negotiate with one another through unrestricted cheap-talk communication before a proposal comes to a vote. We compare committees with no communication, committees where communication is public and messages are observed by all committee members, and committees where communication is private and any committee member can send private messages to any other committee member. We find that the ability to communicate has a significant impact on outcomes and coalitions. When communication is public, committees more frequently agree on outcomes which give a significant fraction of the resources to every member. With private communication, we observe a significant increase in the share of allocations that give a positive amount to a minimal winning coalition. When either type of communication is allowed, dynamic coalitions emerge more frequently and majoritarian coalitions last longer. The content of communication is correlated with outcomes and with the persistence of a dynamic coalition. These findings suggest a coordination role for communication that varies with the mode of communication.
    Date: 2015–12
  6. By: Peter Mitic (Santander UK); Bertrand K. Hassani (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, Santander UK)
    Abstract: The Shapley method is applied to capital allocation in the context of a simple business model, where many business units supported by services. In this model the services are capable of either reducing the capital payable by the business units, or the opposite. A simple model of evaluating the value of coalitions is proposed, with a modification if a service is a member of the coalition. A closed form formula for the Shapley allocation to all players is derived, thus eliminating combinatorial problems.
    Keywords: Capital value,Game theory,Service,Diversification,Allocation,Shapley,Operational Risk
    Date: 2015–06
  7. By: Stéphane Gonzalez (Université Jean Monnet - Saint-Etienne, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Michel Grabisch (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics)
    Abstract: We consider in this paper solutions for TU-games where it is not assumed that the grand coalition is necessarily the final state of cooperation. Partitions of the grand coalition, or balanced collections together with a system of balancing weights interpreted as a time allocation vector are considered as possible states of cooperation. The former case corresponds to the c-core, while the latter corresponds to the aspiration core or d-core, where in both case, the best configuration (called a maximising collection) is sought. We study maximising collections and characterize them with autonomous coalitions, that is, coalitions for which any solution of the d-core yields a payment for that coalition equal to its worth. In particular we show that the collection of autonomous coalitions is balanced, and that one cannot have at the same time a single possible payment (core element) and a single possible configuration. We also introduce the notion of inescapable coalitions, that is, those present in every maximising collection. We characterize the class of games for which the sets of autonomous coalitions, vital coalitions (in the sense of Shellshear and Sudhölter), and inescapable coalitions coincide, and prove that the set of games having a unique maximising coalition is dense in the set of games.
    Keywords: cooperative game,core,balancedness,c-core,aspiration core,coalition formation,autonomous coalitions JEL Classification: C71
    Date: 2015
  8. By: Matthew Doyle (Division of Economics and Business, Colorado School of Mines); Corrado Di Maria (School of Economics, University of East Anglia); Ian Lange (Division of Economics and Business, Colorado School of Mines); Emiliya Lazarova (School of Economics, University of East Anglia)
    Abstract: Researchers have utilized the fact that many states have term limits (as opposed to being eligible for re-election) for governors to determine how changes in electoral incentives alter state regulatory agency behavior. This paper asks whether these impacts spill over into private sector decision-making. Using data from gubernatorial elections in the U.S., we find strong evidence that power plants spend less in water pollution abatement if the governor of the state where the plant is located is a term-limited democrat. We show that this evidence is consistent with compliance cost minimization by power plants reacting to changes in the regulatory enforcement. Finally, we show that the decrease in spending has environmental impacts as it leads to increased pollution.
    Keywords: Political Economy, Electoral Incentives, Term Limits, Environmental Policy, Pollution Abatement, Compliance Costs, Power Plants, Water Pollution, Regression Discontinuity
    JEL: H32 H76 Q25 Q53 Q58
    Date: 2016–10
  9. By: Casey, Katherine (Stanford University)
    Abstract: Individuals draw inferences from thin slices of information--a glance at a photo, a twenty second audio clip--that have been shown to predict real world outcomes of interest in a variety of markets. This paper presents results from a series of lab-in-the-field experiments that elicit these inferences in political labor markets by asking voters to evaluate candidates based on short exposure to photos and video clips. Participants were registered voters in a low income, limited information environment, where ballot photos may be both the first and last visual impression many voters have of candidates. I find that these snap judgments predict election outcomes with accuracy greater than chance, reproducing results from leading studies of American elections in a markedly different empirical context. I then test whether these judgments predict differences in the professional qualifications of candidates and the performance of elected politicians. I find little evidence that snap judgments discriminate along measures of politician productivity.
    Date: 2015–11
  10. By: Hirsch, Alexander V. (CA Institute of Technology); Shotts, Kenneth W. (Stanford University)
    Abstract: Political institutions often use decision making procedures that create veto players--individuals or groups who, despite lacking direct decision making authority, nevertheless have the power to block policy change. In this paper we use the competitive policy development model of Hirsch and Shotts (2015) to examine how the presence of veto players effects outcomes when policies are developed endogenously. Consistent with spatial models of pivotal politics, veto players can induce gridlock, which is harmful to a centrist decisionmaker. But they can also have more subtle effects. Some of the effects are negative--for example, when the status quo is centrist, veto players dampen productive policy competition because of their resistance to change. But some of the effects are surprisingly positive. In particular, when the status quo benefits a veto player and there is a skilled policy entrepreneur who is highly motivated change it, the veto player forces the entrepreneur to develop a much higher quality proposal. This effect yields substantial benefits for a centrist decisionmaker. We also show that veto players can induce asymmetric patterns of policy development, with much greater activity by the faction that is more dissatisfied with the status quo.
    Date: 2015–10
  11. By: Luke Condra; Mohammad Isaqzadeh; Sera Linardi
    Abstract: Does willingness to aid "others" change when in their physical presence? We argue that studies cueing non-coethnics through names and photos may underestimate discrimination resulting from actual interethnic interaction. In an experiment in Kabul, Afghanistan, Dari-speaking day-laborers contribute their earnings to a hospital under one of three randomly-assigned experimental conditions. In In-group, the hospital is in a Dari-speaking province; in Out-group-Abstract and Out-group-Real, it is in a Pashto-speaking (Pashtun) province. While subjects in In-group and Outgroup- Abstract wait for the experiment with only Dari-speakers present, subjects in Out-group-Real wait among both Dari-speakers and Pashto-speakers. When Pashtuns are absent, the findings accord with other experiments that find little to no out-group discrimination. However, the physical presence of Pashtuns (Out-group-Real) decreases contributions by 25%. Consistent with the threat hypothesis, contributions decrease the longer Dari-speakers wait with Pashtuns, though subjects' youth and ability to speak Pashto mediate this effect.
    Date: 2016
  12. By: Carmen Marchiori; Simon Dietz; Alessandro Tavoni
    Abstract: We investigate the effect of domestic politics on international environmental policy by incorporating into a classic stage game of coalition formation the phenomenon of lobbying by special-interest groups. In doing so, we contribute to the theory of international environmental agreements, which has overwhelmingly assumed that governments make decisions based on a single set of public-interest motivations. Our results suggest that lobbying on emissions may affect the size of the stable coalition in counterintuitive ways. In particular, a powerful business lobby may increase the government's incentives to sign an agreement, by providing it with strong bargaining power with respect to that lobby at the emission stage. This would result in lower total emissions when the number of countries involved is not too large. We also show that things change radically when lobbying bears directly on the membership decisions, suggesting that both the object and timing of lobbying matter for the way in which membership decisions, emissions and welfare are affected.
    Keywords: game theory; international environmental agreements; lobbying; special interest groups; strategic cooperation
    JEL: C7 H41 K33 Q2 Q54
    Date: 2016–09–25
  13. By: Diamond, Rebecca (Stanford University)
    Abstract: Governments may extract rent from private citizens by inflating taxes and spending on projects which benefit special interests. Using a spatial equilibrium model, I show that less elastic housing supplies increase governments' abilities to extract rents. Inelastic housing supply elasticity, driven by exogenous variation in local topography, raises local governments' tax revenue. I find that public sector workers, one of the largest government special interests, capture a share of these rents either through increased compensation when formal collective bargaining is legal or by increased corruption when collective bargaining is outlawed.
    Date: 2015–07
  14. By: Bowen, T. Renee (Stanford University); Georgiadis, George (Northwestern University); Lambert, Nicolas S. (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 effcient agent obtains his ideal project scope with either agent as dictator and under unanimity. In this sense, the efficient agent always has real authority.
    JEL: C73 D70 D78 H41
    Date: 2015–12
  15. By: Chapman, Jonathan
    Abstract: Several theories have argued that democratic reform will lead to higher government spending. However, these theories have generally focused on expenditure on redistribution rather than expenditure on public goods. This paper argues that poorer citizens may desire relatively low levels of public goods provision and so democratization may lead to lower government expenditure on items such as public infrastructure. This hypothesis is tested using a new panel dataset of town council infrastructure spending and revenue in nineteenth-century Britain. An 1894 national reform implementing a system of “one-household-one-vote” and the secret ballot is used as the treatment event in a difference-in-difference analysis. The results show that democratic reform slowed the growth of town council spending on public goods, including water supply and other public infrastructure. Further analysis suggests that government spending was highest when the balance of political power was held by the middle class, rather than the poor.
    Keywords: Democratization, Elites, Secret ballot, Infrastructure, Public goods
    Date: 2016

This nep-cdm issue is ©2016 by Stan C. Weeber. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.