nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒10‒23
ten papers chosen by
Stan C. Weeber, McNeese State University

  1. Strategic Voting in Multi-Winner Elections with Approval Balloting: A Theory for Large Electorates By Jean-François Laslier; Karine Van Der Straeten
  2. Democracy for Polarized Committees: The Tale of Blotto's Lieutenants By Alessandra Casella; Jean-François Laslier; Antonin Macé
  3. Who Runs? Honesty and Self-Selection into Politics By Fehrler, Sebastian; Fischbacher, Urs; Schneider, Maik T.
  4. Influencing Connected Legislators By Battaglini, Marco; Patacchini, Eleonora
  5. The political economy of interregional competition for firms By Daniel Hopp; Michael Kriebel
  6. Procedural Justice and Political Risk By Salil Benegal; Mikhael Shor
  7. Majority Judgment vs Majority Rule By Michel Balinski; Rida Laraki
  8. Games on concept lattices: Shapley value and core By Ulrich Faigle; Michel Grabisch; Andres Jiménez-Losada; Manuel Ordóñez
  9. Collective commitment By Christian Roessler; Sandro Shelegia; Bruno Strulovici
  10. Fragile Financial Coalitions: the interaction between real returns and social capital By Yena Park; George Mailath; Dirk Krueger; Harold Cole

  1. By: Jean-François Laslier (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics); Karine Van Der Straeten (TSE - Toulouse School of Economics - Toulouse School of Economics, Institute advanced for advanced studies in Toulouse - Institute advanced for advanced studies in Toulouse)
    Abstract: We propose a theory of strategic voting in multi-winner elections with approval balloting: A fixed number M of candidates are to be elected; each voter votes for as many candidates as she wants; the M candidates with the most votes are elected. We assume that voter preferences are separable and that there exists a tiny probability that any vote might be misrecorded. Best responses involve voting by pairwise comparisons. Two candidates play a critical role: the weakest expected winner and the strongest expected loser. Expected winners are approved if and only if they are preferred to the strongest expected loser and expected losers are approved if and only if they are preferred to the weakest expected winner. At equilibrium, if any, a candidate is elected if and only if he is approved by at least half of the voters. With single-peaked preferences, an equilibrium always exists, in which the first M candidates according to the majority tournament relation are elected. The theory is tested on individual data from the 2011 Regional Government election in Zurich.
    Keywords: Approval Voting,Elections,Voting behavior
    Date: 2016–04
  2. By: Alessandra Casella (CEPR - Center for Economic Policy Research - CEPR, Columbia University [New York], NBER - National Bureau of Economic Research - National Bureau of Economic Research); Jean-François Laslier (PSE - Paris-Jourdan Sciences Economiques - CNRS - Centre National de la Recherche Scientifique - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), PSE - Paris School of Economics); Antonin Macé (AMSE - Aix-Marseille School of Economics - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - EHESS - École des hautes études en sciences sociales)
    Abstract: In a polarized committee, majority voting disenfranchises the minority. By allowing voters to spend freely a fixed budget of votes over multiple issues, Storable Votes restores some minority power. We study a model of Storable Votes that highlights the hide-and-seek nature of the strategic game. With communication, the game replicates a classic Colonel Blotto game with asymmetric forces. We call the game without communication a decentralized Blotto game. We characterize theoretical results for this case and test both versions of the game in the laboratory. We find that, despite subjects deviating from equilibrium strategies, the minority wins as frequently as theory predicts. Because subjects understand the logic of the game – minority voters must concentrate votes unpredictably – the exact choices are of secondary importance. The result is an endorsement of the robustness of the voting rule.
    Keywords: committees,Storable Votes,polarization,Colonel Blotto,tyranny of the majority
    Date: 2016–03
  3. By: Fehrler, Sebastian (University of Konstanz); Fischbacher, Urs (University of Konstanz); Schneider, Maik T. (University of Bath)
    Abstract: We examine the incentives to self-select into politics and how they depend on the transparency of the entry process. To this end, we set up a two-stage political competition model and test its key mechanisms in the lab. At the entry stage, potential candidates compete in a contest to become their party's nominee. At the election stage, the nominated candidates campaign by making non-binding promises to voters. Confirming the model's key predictions, we find in the experiment that dishonest people over-proportionally self-select into the political race; and that this adverse selection effect can be prevented if the entry stage is made transparent to voters.
    Keywords: candidates, elections, campaigns, primaries, contest, voting, political economy, experiment, lying aversion, self-selection, cheap talk
    JEL: C92 D71 D83
    Date: 2016–10
  4. By: Battaglini, Marco; Patacchini, Eleonora
    Abstract: This paper studies how interest groups allocate campaign contributions when congressmen are connected by social ties. We establish conditions for the existence of a unique Nash equilibrium in pure strategies for the contribution game and characterize the associated allocation of the interest groups' moneys. While the allocations are generally complex functions of the environment (the voting function, the legislators' preferences and the social network topology), they are simple, monotonically increasing functions of the respective legislators' Bonacich centralities when the legislators are office motivated or the number of legislators is large. Using data on the 109th-113th Congresses and on congressmen's alumni connections, we estimate the model and find evidence supporting its predictions.
    Keywords: economics of networks; interest groups
    JEL: D72 D78
    Date: 2016–10
  5. By: Daniel Hopp; Michael Kriebel
    Abstract: This paper studies interregional competition for firms when the bidding is decided upon majority voting. We model the competition as an auction under full information between two asymmetric regions inhabited by low- and high-skilled individuals. We derive two results: First, the location decision is inefficient in most cases, especially when the median voter is high-skilled. Second, winning the auction is harmful for the region if the political process and a strong competition lead to subsidies which exceed the surplus created by a firm's location. This implies that restricting interregional competition for firms, e.g. regulating subsidies, may enhance welfare. Furthermore, our model shows that countries with high redistributive taxes and a low-skilled majority have an advantage to attract foreign firms.
    Keywords: median voter, political economy, subsidy competition, spillover
    JEL: H23 H25 H31 P16 R11
    Date: 2016–10
  6. By: Salil Benegal (University of Connecticut); Mikhael Shor (University of Connecticut)
    Abstract: We examine how ideological affiliations affect individuals’ perceptions of fairness in scenarios where they control an allocation of money for themselves and another, unknown person. Are notions of equity guided by the fairness of distribution, or is the overall outcome less important than having democratic procedures that allow individuals a voice in the allocation process? We design an experimental bargaining game in which subjects have the ability to allocate both money and power between themselves and another unknown individual. We find that liberals are more likely to enact fair outcomes, but conservatives are more likely to share decision-making rights while being less financially generous. However, we find that the tendency to select one form of fairness over another is not only driven by the type of ideology, but also by perceived spatial distance from others’ ideology: respondents with the greatest perceived ideological distance from others were significantly less likely to concede power and preferred to dictate allocations. JEL Classification: Key words:
    Date: 2016–10
  7. By: Michel Balinski (CNRS - Centre National de la Recherche Scientifique, Ecole Polytechnique [Palaiseau] - Ecole Polytechnique); Rida Laraki (Université Paris IX - Paris Dauphine, LAMSADE - Laboratoire d'analyse et modélisation de systèmes pour l'aide à la décision - Université Paris IX - Paris Dauphine - CNRS - Centre National de la Recherche Scientifique, CNRS - Centre National de la Recherche Scientifique, Ecole Polytechnique [Palaiseau] - Ecole Polytechnique)
    Abstract: The validity of majority rule in an election with but two candidates—and so also of Condorcet consistency—is challenged. Axioms based on measures—paralleling those of K. O. May characterizing majority rule for two candidates based on comparisons—lead to another method that is unique in agreeing with the majority rule on pairs of “polarized” candidates. The method—majority judgment—meets R. A. Dahl’s requirement that an apathetic majority does not always defeat an intense minority. It is a practical method that accommodates any number of candidates, avoids both the Condorcet and Arrow paradoxes, and best resists strategic manipulation.
    Keywords: measuring, ranking, electing, majority rule, Condorcet consistency, tyranny of majority, intensity problem, majority-gauge, strategy-proofness, polarization
    Date: 2016–03–29
  8. By: Ulrich Faigle (Universität zu Köln - Mathematisches Institut); Michel Grabisch (PSE - Paris School of Economics, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Andres Jiménez-Losada (University of Seville Escuela Técnica Superior de Ingenieros de Sevilla); Manuel Ordóñez (University of Seville Escuela Técnica Superior de Ingenieros de Sevilla)
    Abstract: We introduce cooperative TU-games on concept lattices, where a concept is a pair (S, S ′) with S being a subset of players or objects, and S ′ a subset of attributes. Any such game induces a game on the set of players/objects, which appears to be a TU-game whose collection of feasible coalitions is a lattice closed under intersection, and a game on the set of attributes. We propose a Shapley value for each type of game, axiomatize it, and investigate the geometrical properties of the core (non-emptiness, boundedness, pointedness, extremal rays). In particular, we derive the equivalence of the intent and extent core for the class of distributive concepts.
    Keywords: Shapley value,cooperative game,restricted cooperation,core,concept lattice
    Date: 2016
  9. By: Christian Roessler; Sandro Shelegia; Bruno Strulovici
    Abstract: We consider collective decisions made by agents whose preferences and power depend on past events and decisions. Faced with an inecient equilibrium and an opportunity to commit to a policy, can the agents reach an agreement on such a policy? We provide a consistency condition linking power structures in the dynamic setting and at the commitment stage. When the condition holds, commitment has no value: any agreement that may be reached at the outset coincides with the equilibrium without commitment. When the condition fails, as in the case of time-inconsistent preferences, commitment can improve outcomes. We discuss several applications.
    JEL: D70 H41 C70
    Date: 2016–07
  10. By: Yena Park (University of Rochester); George Mailath (University of Pennsylvania); Dirk Krueger (University of Pennsylvania); Harold Cole (University of Pennsylvania)
    Abstract: We analyze efficient arrangement of financial coalitions under incomplete enforcement, which are endogenously formed to undertake consumption smoothing and joint investment. We explicitly consider the symmetric contracting conditions of the individuals who seek to deviate from the contract with the initial contracting conditions, by considering the possibility that they can construct deviating coalitions. The self-enforcing contracts for both the original coalition and any deviating coalition rely on the belief in future cooperation and thus we investigate the role of belief coordination on endogenous formation and activities of financial institutions to show both beneficial and harmful effects. The real return on the joint investment can also play both positive and negative role in these symmetric contracting environments. We examine the extent to which the belief coordination and real returns are substitutes or complements, and their implications about self-enforcing arrangements.
    Date: 2016

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