nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2016‒11‒06
fifteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Elite Identity and Political Accountability: A Tale of Ten Islands By Jean-Paul Carvalho; Christian Dippel
  2. The illicit beneficts of local party alignment in national elections By Oana Borcan
  3. Solving intergenerational sustainability dilemma through imaginary future generations: A qualitative-deliberative approach By Yoshinori Nakagawa; Koji Kotani; Yoshio Kamijo; Tatsuyoshi Saijo
  4. Sovereign Debt - Election Concerns and the Democratic Disadvantage By Amrita Dhillon; Andrew Pickering; Tomas Sjöström
  5. Collective Choice in Dynamic Public Good Provision By T. Renee Bowen; George Georgiadis; Nicolas S. Lambert
  6. A Representative Committee by Approval Balloting By Subiza, Begoña; Peris, Josep E.
  8. Determining models of influence By Michel Grabisch; Agnieszka Rusinowska
  9. Electoral competition with primaries and quality asymmetries By Orestis Troumpounis; Dimitrios Xefteris; Bernard Grofman
  10. Did Johnson affect Trump or Clinton? A note on the Libertarian vote in the 2016 presidential election By Kurrild-Klitgaard, Peter
  11. Financial Literacy and Political Orientation in Great Britain By Montagnoli, Alberto; Moro, Mirko; Panos, Georgios A.; Wright, Robert E.
  12. Beyond equal rights: Equality of opportunity in political participation By Hufe, Paul; Peichl, Andreas
  13. Lattices in social networks with influence By Michel Grabisch; Agnieszka Rusinowska
  14. Information acquisition, signaling and learning in duopoly By Jeitschko, Thomas D.; Liu, Ting; Wang, Tao
  15. Voting and Popularity By Gebhard Kirchgässner

  1. By: Jean-Paul Carvalho; Christian Dippel
    Abstract: This paper examines the relationship between elite identity and political outcomes from a theoretical and empirical perspective. Elite members with distinct economic and social identities vote for or against an extractive policy, which benefits them at the expense of the citizenry. Voting is disciplined by the threat of citizen revolt, with some elite members being more accountable than others. The relationship between elite identity and political accountability is complex and non-monotonic. As their share in the elite grows, accountable elite members are more likely to vote for extractive policies. When the elite becomes too accountable as a whole, elite members may pursue extractive policies by altering the institutional framework. The model is grounded in an empirical exploration of ten British Caribbean sugar colonies where the emancipation of slaves in 1838 created a mixed local and British elite and for which we have unique data on elite composition and voting. Voting behavior depends on an individual's identity and the overall composition of the elite in a manner predicted by the theory. In all but one of the islands elites eventually dissolved their legislative assemblies, ceding their formal powers to the British Crown. Consistent with the theory, we find evidence linking this to rising accountability of the islands' elites.
    JEL: D71 N66 O43
    Date: 2016–10
  2. By: Oana Borcan (University of East Anglia)
    Abstract: How do central politicians in young democracies secure electoral support at grass-roots level? I show that alignment with local governments is instrumental in swaying national elections via electoral fraud. Using a regression discontinuity design with Romanian local elections and a president impeachment referendum in 2012, I find higher referendum turnouts in localities aligned with the government coalition - the impeachment initiators. A variety of electoral forensics tests uncover abnormal vote count distributions across polling stations, consistent with null ballot stuffing and possibly vote buying. The alignment effect is driven by rural localities, those with weaker opposition party presence, and higher vote buying incidence in past elections. This illicit transfer from local to national government may explain the reverse clientelistic grants found in the intergovernmental transfers literature.
    Keywords: political economy, elections, electoral fraud, partisan alignment
    JEL: D72 D73 H7 K42
    Date: 2016–10–18
  3. By: Yoshinori Nakagawa (School of Economics and Management, Kochi University of Technology); Koji Kotani (School of Economics and Management, Kochi University of Technology); Yoshio Kamijo (School of Economics and Management, Kochi University of Technology); Tatsuyoshi Saijo (School of Economics and Management, Kochi University of Technology)
    Abstract: The current generation affects future generations, but not vice versa. This one-way nature of dependence over generations is known to be a main cause for many important problems such as climate change and accumulation of government debts. The occurrence of these problems is characterized by the fact that the current generation tends to choose an action in favor of their benefit without considering future generations, which we call "intergenerational sustainability dilemma (ISD)." This paper designs and implements deliberation experiments of the ISD with a single generation of three people, and examine how the dilemma can be solved. A treatment, "cap of future generations" (capped player), is suggested in which one person in the current generation is asked to be a representative from future without any obligation. We conduct a novel qualitative-deliberative analysis of recorded discussions for 10 minutes of each generation’s decision, contributing to the two points. First, we find the conditions under which intergenerational sustainability is enhanced through deliberations. That is, one member in a group voluntarily plays a role of icebreakers for deliberation and/or a capped player is present in a group. We demonstrate that when an icebreaker and/or a capped player are present during deliberation, the group brings more varieties of ideas and viewpoints for the ISD, leading to higher intergenerational sustainability. Second, this research illustrates how a qualitative-deliberative analysis can be usefully amalgamated with economic experiments as a new methodology to reveal human behaviors and preferences in collective-decision making.
    Keywords: Intergenerational sustainability, cap of future generations, qualitative-deliberative approach, economic experiments
    Date: 2016–10
  4. By: Amrita Dhillon; Andrew Pickering; Tomas Sjöström
    Abstract: We examine default decisions under different political systems. If democratically elected politicians are unable to make credible commitments to repay externally held debt, default rates are inefficiently high because politicians internalize voter utility loss from repayment. Politicians who are motivated by electoral concerns are more likely to default in order to avoid voter utility losses, and, since lenders recognize this, interest rates and risk premiarise. Therefore, democracy potentially confers a credit market disadvantage. However, farsighted institutions that take into account how interest rates respond to default risk can ameliorate the disadvantage. Using a numerical measure of institutional farsightedness obtained from the Government Insight Business Risk and Conditions database, we …find that the observed relationship between credit-ratings and democratic status is indeed strongly conditional on farsightedness. With myopic institutions, democracy is estimated to cost on average about 2.5 investment grades. With farsighte institutions there is, if anything, a democratic advantage.
    Keywords: Sovereign debt, Default, Risk premia, Autocracy, Democracy, Institutions
    JEL: H63 F55 D72 D82 H75 O43 C72
    Date: 2016–11
  5. By: T. Renee Bowen; George Georgiadis; Nicolas S. Lambert
    Abstract: Two heterogeneous agents contribute over time to a joint project, and collectively decide its scope. A larger scope requires greater cumulative effort and delivers higher benefits upon completion. We show that the efficient agent prefers a smaller scope, and preferences are time-inconsistent: as the project progresses, the efficient (inefficient) agent’s preferred scope shrinks (expands). We characterize the equilibrium outcomes under dictatorship and unanimity, with and without commitment. We find that an agent’s degree of efficiency is a key determinant of control over project scopes. From a welfare perspective, it may be desirable to allocate decision rights to the inefficient agent.
    JEL: C73 D70 D78 H41
    Date: 2016–10
  6. By: Subiza, Begoña (University of Alicante, D. Quantitative Methods and Economic Theory); Peris, Josep E. (University of Alicante, D. Quantitative Methods and Economic Theory)
    Abstract: A new voting rule for electing committees is described. Specifically, we use approval balloting and propose a new voting procedure that guarantees that if there is a committee that represents (with a given proportion of representatives) all of the existing voters, then the selected committee has to represent all of voters in at least the same proportion. This property is a way of selecting a committee that represents completely all of voters when such a committee exists. The usual voting rules in this context do not satisfy this condition.
    Keywords: Approval balloting; committee election; unanimity; justified representation; representativeness
    JEL: D71 D72
    Date: 2016–10–25
  7. By: YARON AZRIELI (The Ohio State University); SEMIN KIM (Yonsei University)
    Abstract: A voting rule f is self-stable (Barber`a and Jackson [4]) if any alternative rule g does not have sufficient support in the society to replace f, where the decision between f and g is based on the rule f itself. While Barber`a and Jackson focused on anonymous rules in which all agents have the same voting power, we consider here the larger class of weighted majority rules. Our main result is a characterization of self-stability in this setup, which shows that only few rules of a very particular form satisfy this criterion. This result provides a possible explanation for the tendency of societies to use more conservative rules when it comes to changing the voting rule. We discuss self-stability in this latter case, where a different rule F may be used to decide between f and g.
    Keywords: Voting rules, weighted majority rules, self-stability.
    JEL: D72
    Date: 2016–11
  8. By: 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); Agnieszka Rusinowska (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 a model of opinion formation based on aggregation functions. Each player modifies his opinion by arbitrarily aggregating the current opinion of all players. A player is influential on another player if the opinion of the first one matters to the latter. A generalization of an influential player to a coalition whose opinion matters to a player is called an influential coalition. Influential players (coalitions) can be graphically represented by the graph (hypergraph) of influence, and convergence analysis is based on properties of the hypergraphs of influence. In the paper, we focus on the practical issues of applicability of the model w.r.t. a standard framework for opinion formation driven by Markov chain theory. For a qualitative analysis of convergence, knowing the aggregation functions of the players is not required, one only needs to know the set of influential coalitions for each player. We propose simple algorithms that permit us to fully determine the influential coalitions. We distinguish three cases: the symmetric decomposable model, the anonymous model, and the general model. JEL Classification: C7, D7, D85
    Keywords: social network,opinion formation,aggregation function,influential coalition,algorithm
    Date: 2016
  9. By: Orestis Troumpounis; Dimitrios Xefteris; Bernard Grofman
    Abstract: In two-dimensional two-party electoral competition under plurality rule, there are typically no equilibria, even when one of the dimensions refers to valence. The good news is that the introduction of either closed or open primaries acts as a stabilizing force since equilibria exist quite generally, serves as an arena for policy debates since all candidates propose differentiated platforms, and guarantees that each party's nominee is of higher quality than its primary opponent. Moreover, primaries tend to benefit the party whose median voter is closer to the overall median. The bad news is that the winner of the general election need not be the candidate with the highest overall quality since too competitive primaries can prove harmful. Given the differences between open and closed primaries, we show that the choice of primary type is particularly important and may determine the winner of the general election.
    Keywords: Downsian model, primaries, valence
    JEL: C62 C72 D72
    Date: 2016
  10. By: Kurrild-Klitgaard, Peter
    Abstract: It is widely suspected that the candidates of the US Libertarian Party usually take votes almost exclusively or at least predominantly from Republican Party candidates. A look at almost 200 published 3- and 4-way polls (March-October) in the 2016 US presidential election indicates that Gary Johnson’s candidacy affected both Hillary Clinton and Donald Trump, did so moderately, and none in particular. When controlling for other factors Clinton’s lead seems to have been negatively affected. This suggests that Libertarian support in 2016 to a large degree has come from voters who otherwise would have split more or less equally between Democrats and Republicans or not have voted at all.
    Keywords: Donald Trump; Gary Johnson; Hillary Clinton; Jill Stein; 2016 US presidential election; polls; USA
    JEL: D72
    Date: 2016–10–30
  11. By: Montagnoli, Alberto (University of Sheffield); Moro, Mirko (University of Stirling); Panos, Georgios A. (University of Glasgow); Wright, Robert E. (University of Strathclyde)
    Abstract: This study examines the relationship between financial literacy and political orientation in Great Britain. Using novel data from the British Election Survey in 2014, we employ two distinct measures of political orientation, capturing individual self-assessment on a left-right axis and party preferences. We find that financially-literate individuals are some 11-19 percent more likely to orientate at the centre-left or the centre-right. Moreover, they are some 30 percent less likely not to know their political orientation. The results are robust when rich sets of public-attitude and public-value variables are accounted for. Financially-literate individuals are also more likely to have a stable political orientation over time and they are some 15-23 percent less likely to change attitudes radically towards the left or the right across different waves of the study. We interpret our findings as indicative that greater financial literacy is conducive to greater stability of moderate political views and orientation.
    Keywords: financial literacy, political orientation, attitudes, polarization, Great Britain
    JEL: D14 D63 D72 I24
    Date: 2016–10
  12. By: Hufe, Paul; Peichl, Andreas
    Abstract: It is well understood that political participation is stratified by socio-economic characteristics. Yet it is an open question how this finding bears on the normative evaluation of the democratic process. In this paper we argue that the equality of opportunity (EOp) concept furnishes an attractive framework to answer this question. Drawing on the analytical tools developed by an expanding empirical literature on EOp we investigate to what extent political participation is determined by factors that lie beyond individual control (circumstances) and thus is unfairly distributed. Using rich panel data from the US, we find that a lack of political opportunity is particularly pronounced for contacts with officials, participation in rallies and marches, and membership in political organizations. These opportunity shortages tend to complement each other across activities and persist over time. While family characteristics and psychological dispositions during childhood emanate as the strongest determinants, genetic variation is a small yet significant contributor to unequal political opportunities in the US.
    Keywords: Equality of Opportunity,Political Participation,Genes
    JEL: D39 D63 D72
    Date: 2016
  13. By: 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); Agnieszka Rusinowska (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 present an application of lattice theory to the framework of influence in social networks. The contribution of the paper is not to derive new results, but to synthesize our existing results on lattices and influence. We consider a two-action model of influence in a social network in which agents have to make their yes-no decision on a certain issue. Every agent is preliminarily inclined to say either 'yes' or 'no', but due to influence by others, the agent's decision may be different from his original inclination. We discuss the relation between two central concepts of this model: influence function and follower function. The structure of the set of all influence functions that lead to a given follower function appears to be a distributive lattice. We also consider a dynamic model of influence based on aggregation functions and present a general analysis of convergence in the model. Possible terminal classes to which the process of influence may converge are terminal states (the consensus states and non trivial states), cyclic terminal classes and unions of Boolean lattices.
    Keywords: convergence,terminal class,aggregation function,Influence function,follower function,distributive lattice
    Date: 2015–03
  14. By: Jeitschko, Thomas D.; Liu, Ting; Wang, Tao
    Abstract: We study firms' incentives to acquire private information in a setting where subsequent competition leads to firms' later signaling their private information to rivals. Due to signaling, equilibrium prices are distorted, and so while firms benefit from obtaining more precise private information, the value of information is reduced by the price distortion. Thus, compared with firms that do not attempt to manipulate rivals' beliefs, signaling firms acquire less precise information. An industry-wide trade-association acquiring information increases firm profit and may also increase consumer surplus, so allowing such collective action may be in the interest of regulatory authorities.
    Keywords: information acquisition,signaling,product differentiation
    JEL: D4 D8 L1
    Date: 2016
  15. By: Gebhard Kirchgässner
    Abstract: For about 45 years, vote and popularity functions have been estimated for many countries indi- cating that voting intentions as well as actual votes are influenced by economic development. The economy is, of course, not the only and probably not always the most important factor, but there is no doubt anymore that it is an important factor. The most relevant variables are still unemployment, and/or real growth, and inflation. The estimated coefficients vary considerably between countries and time periods. In papers, retrospective sociotropic voting dominates. However, the evidence is not so univocal; it rath er tells that voting has egotropic as well as sociotropic aspects, and it is prospective as well as retrospective. It is still open what roles self- interest and altruism play in voting.
    Keywords: Vote; Popularity Function; Egotropic; Sociotropic Voting; Retrospective; Prospective Voting; Rational Voters Behavior
    JEL: H39
    Date: 2016–11

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