nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2017‒02‒12
fifteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Are Protests Games of Strategic Complements or Substitutes? Experimental Evidence from Hong Kong's Democracy Movement By Davide Cantoni; David Y. Yang; Noam Yuchtman; Y. Jane Zhang
  2. The Swing Voter's Curse in Social Networks By Berno Buechel; Lydia Mechtenberg
  3. Exposure to Refugees and Voting for the Far-Right. (Unexpected) Results from Austria By Steinmayr, Andreas
  4. Image concerns and the political economy of publicly provided private goods By König, Tobias; Lausen, Tobias; Wagener, Andreas
  5. Cooperation, Competition and Entry in a Tullock Contest By GRANDJEAN, G.; TELLONE, D.; VERGOTE, W.
  6. Deflecting my burden, hindering redistribution: How elites influence tax legislation in Latin America By Juan A. Bogliaccini; Juan Pablo Luna
  7. Formation of Coalition Structures as a Non-Cooperative Game By Dmitry Levando
  8. Altruistic Norm Enforcement and Decision-Making Format in a Dilemma: Experimental Evidence By Kamei, Kenju
  9. It's your turn: experiments with three-player public good games By Riyanto, Yohanes E.; Roy, Nilanjan
  10. On the Effectiveness of Elected Male and Female Leaders and Team Coordination By Reuben, Ernesto; Timko, Krisztina
  11. Neighbors and Friends: The Effect of Globalization on Party Positions By Ftergioti, Stamatia
  12. Policy Democracy? Social and Material Participation in Biodiesel Policy-Making Processes in India By Evelien de Hoop; Saurabh Arora
  13. JRC Insights - Social Policy Innovation Series - Leveraging Digital Social Innovation: Perspectives from the IESI Knowledge Map By Gianluca Misuraca; Giulio Pasi; Dimitri Gagliardi; Fabienne Abadie
  14. An online experiment on cooperation and groupishness across urban districts By Kesternich, Martin; Goeschl, Timo; Lohse, Johannes; Römer, Daniel; Reif, Christiane
  15. Bargaining over Natural Resources: Governments between Environmental Organizations and Extraction Firms By Schopf, Mark; Voss, Achim

  1. By: Davide Cantoni; David Y. Yang; Noam Yuchtman; Y. Jane Zhang
    Abstract: The decision to protest is strategic: an individual's participation is a function of her beliefs about others' turnout. Models of protest often assume strategic complementarity; however, the challenge of collective action suggests strategic substitutability. We conduct the first field experiment directly manipulating individuals' beliefs about others' protest participation, in the context of Hong Kong's pro-democracy movement. We elicit university students' planned participation in an upcoming protest and their prior beliefs about others' participation, in an incentivized manner. One day before the protest, we randomly provide a subset of subjects with truthful information about others' protest plans, and elicit posterior beliefs about protest turnout, again in an incentivized manner. This allows us to identify the causal effects of positively and negatively updated beliefs about others' protest participation on subjects' turnout. We consistently find evidence of strategic substitutes. Analysis of control group subjects and survey evidence reinforce our experimental findings.
    JEL: D74 D8 P0
    Date: 2017–01
  2. By: Berno Buechel (University of St. Gallen and Liechtenstein-Institute); Lydia Mechtenberg (University of Hamburg)
    Abstract: We study private communication in social networks prior to a majority vote on two alternative policies. Some (or all) agents receive a private imperfect signal about which policy is correct. They can, but need not, recommend a policy to their neighbors in the social network prior to the vote. We show theoretically and empirically that communication can undermine efficiency of the vote and hence reduce welfare in a common interest setting. Both efficiency and existence of fully informative equilibria in which vote recommendations are always truthfully given and followed hinge on the structure of the communication network. If some voters have distinctly larger audiences than others, their neighbors should not follow their vote recommendation; however, they may do so in equilibrium. We test the model in a lab experiment and strong support for the comparative-statics and, more generally, for the importance of the network structure for voting behavior.
    Keywords: Strategic Voting, Social Networks, Swing Voter's Curse, Information Aggregation
    JEL: D72 D83 D85 C91
    Date: 2017–01
  3. By: Steinmayr, Andreas
    Abstract: The massive increase in the number of arriving refugees in Europe in 2015 creates enormous economic and political challenges in the receiving countries. An important concern is that the inflow of refugees increases the support for far-right, nationalist, anti-immigration parties. This paper studies a natural experiment in an Austrian state to identify the causal effect of exposure to refugees in the neighborhood on the support for the far-right Freedom Party of Austria (FPÖ). Before the local and state elections in September 2015 the inflow of refugees dominated the entire pre-electoral discussion and the FPÖ - with a fierce anti-asylum campaign - doubled its vote share in this election. At the time of the election, 42 percent of Upper Austrian communities hosted refugees, which provides variation in the exposure to refugees at the community level. To account for the potential endogeneity in the distribution of refugees, I use the availability of existing group accommodations as instrumental variable. To cope with the sudden inflow of large number of refugees, these buildings were used as accommodation and their existence strongly increases the probability of refugee presence. In line with the contact hypothesis I find that hosting refugees in the community decreases the support for the FPÖ by 4.42 percentage points in state elections and increases the optimism in the population that the integration of refugees can be managed. The effects are robust to a series of sensitivity and placebo checks.
    JEL: D72 J15 P16
    Date: 2016
  4. By: König, Tobias; Lausen, Tobias; Wagener, Andreas
    Abstract: Governments often provide their citizens with goods and services that are also supplied in markets: education, housing, nutritional assistance, etc. We analyze the political economy of the public provision of private goods when individuals care about their social image. We show that image concerns motivate richer individuals to vote for the public provision of goods they themselves buy in markets, the reason being that a higher provision level attracts more individuals to the public system, enhancing the social exclusivity of market purchases. In effect, majority voting may lead to a public provision that only a minority of citizens use. Users in the public system may enjoy better provision than users in the private system. We characterize the coalition structures across voters that can prevail in a political equilibrium.
    Keywords: [Dual provision] In-kind provision,Status preferences,Majority voting
    JEL: H42 D72 D63
    Date: 2016
  5. By: GRANDJEAN, G.; TELLONE, D.; VERGOTE, W. (Université catholique de Louvain, CORE, Belgium)
    Abstract: We propose a model of network formation in a Tullock contest. Agents first form their partnerships and then choose their investment in the contest. While a link improves the strength of an agent, it also improves the position of her rival. It is thus not obvious that they decide to cooperate. We characterize all pairwise equilibrium networks and find that the network formation process can act as a barrier to entry to the contest. We then analyze the impact of network formation on total surplus and find that a social planner can increase total surplus by creating more asymmetry between agents, as long as this does not reduce the number of participating agents. We show that barriers to entry may either hurt total surplus, as the winner of the prize does not exploit all the possible network benefits, or improve total surplus since less rent is dissipated when competition becomes less fierce. Finally, when networking acts as an endogenous barrier to entry, no pairwise equilibrium network is efficient.
    Keywords: Network Formation, Tullock Contest, Participation Constraints, Efficiency
    JEL: D72 D85
    Date: 2016–07–31
  6. By: Juan A. Bogliaccini; Juan Pablo Luna
    Abstract: This paper proposes to understand a singular but salient factor that enables the wealthy to deflect their tax burden downwards: elites. political leverage to shape legislation via their capacity to influence political actors and policy outcomes. The analysis sheds light on alternative mechanisms used by economic elites over time and space. Our analysis of the political economy of taxing upper-income groups in Chile and Uruguay reveals the importance of continuous political agency on the part of organized elite interest groups. Our results show how even centre-left parties competing on a redistributive programmatic platform confront and concede to the interests of wealthy elites, especially when sustained interaction between political leaders and economic elites becomes routinized in the long run.
    Keywords: tax policy, Latin America, elites, tax avoidance, redistribution, case study
    Date: 2016
  7. By: Dmitry Levando (National Research University Higher School of Economics)
    Abstract: The paper defines a family of nested non-cooperative simultaneous finite games to study coalition structure formation with intra and inter-coalition externalities. The novelties of the paper are: a definition of every games embeds a coalition structure formation mechanism. Every game has two outcomes - an allocation of players over coalitions and a payoff profile for every player. The family is parametrized by a maximum coalition size in every coalition structure (a partition) in a game. For every partition a player has a partition-specific set of strategies. The mechanism portions a set of strategies of the game (a Cartesian product) into partition-specific strategy domains, what makes every partition to be itself a non-cooperative game with partition-specific payoffs for every player. Payoffs are assigned separately for every partition and are independent from the mechanism. Every game in the family has an equilibrium in mixed strategies. The equilibrium can generate more than one coalition and encompasses intra and inter group externalities, what makes it different from the Shapley value. Presence of individual payoff allocation makes it different from a strong Nash, coalition-proof equilibrium, and some other equilibrium concepts. The paper demonstrate some applications of the proposed toolkit: for non-cooperative fundamentals of cooperation in a coalition, Bayesian game, stochastic games and construction of a non-cooperative criterium of coalition structure stability.
    Keywords: noncooperative Games
    JEL: C72
    Date: 2017
  8. By: Kamei, Kenju
    Abstract: Past research has shown that people often take punitive actions towards norm violators even when they are not directly involved in transactions. However, it at the same time suggests that such third-party punishment may not be strong enough to enforce cooperation norms in dilemma situations. This paper experimentally compares the effectiveness of third-party punishment between different enforcement formats. Consistent with past studies, our data shows that having an individual third-party punisher in a group does not make one’s defection materially unbeneficial because of the weak punishment intensity. It also shows that third-party punishment is not effective when two individuals form a pair as a punisher and jointly decide how strong third-party punishment they impose. However, third-party punishment can be sufficiently strong to enforce cooperation norms when a third-party punisher’s action choice is made known to another individual third-party punisher in a different group, or when there are two independent individual third-party players in a group.
    Keywords: experiment, cooperation, dilemma, third-party punishment, social norms
    JEL: C92 D79 H41
    Date: 2017–02–06
  9. By: Riyanto, Yohanes E.; Roy, Nilanjan
    Abstract: We report results from experiments designed to investigate the prevalence of turn-taking in three-person finitely repeated threshold public good games without communication. Individuals can each make a discrete contribution. If the number of contributors is at least equal to the threshold, a public benefit accrues to all group members. Players take turns to provide the public good each round when the endowments are homogeneous. When the turn-taking path is at odds with efficiency or under private information of endowments, players seldom engage in taking turns. An endogenous-move protocol limits the frequency of mis-coordinated outcomes every round.
    Keywords: Public good provision, Turn-taking, Repeated game, Endogenous move, Experiment
    JEL: C72 C92 D03 D82 H41
    Date: 2017–02–03
  10. By: Reuben, Ernesto (New York University, Abu Dhabi); Timko, Krisztina (University of Helsinki)
    Abstract: We study the effect on coordination in a minimum-effort game of a leader's gender depending on whether the leader is democratically elected or is randomly-selected. Leaders use non-binding messages to try to convince followers to coordinate on the Pareto-efficient equilibrium. We find that teams with elected leaders coordinate on higher effort levels. Initially, the benefits of being elected are enjoyed solely by male leaders. However, this gender difference disappears with repeated interaction as unsuccessful male leaders are reelected more often than unsuccessful female leaders.
    Keywords: gender differences, leadership, democracy effect, leader effectiveness, coordination
    JEL: M14 M54 J16 C92
    Date: 2017–01
  11. By: Ftergioti, Stamatia
    Abstract: This paper seeks to examine the effect of economic, social and political globalization on parties’ overall positions. Our empirical analysis is based on a panel model of 34 political parties in 17 west European countries between 1970 and 2010. We find that both economic and social globalization have a significant effect on parties’ positions, whereas political globalization seems to have less of an influence. However, the effect of globalization varies depending on the type of political party. Right-wing parties move leftward in response to all types of globalization while left-wing parties do not alter their position, or move rightward. Moreover, we find strong evidence about party’s influence of the positions that parties in other countries take. These findings give support for the existence of parties’ convergence in the face of globalization with right-wing parties coming closer to left-wing parties, rejecting the established in the literature argument of the so-called “neoliberal convergence”.
    Keywords: party’s position; globalization; partisan politics; panel data
    JEL: F15 H5
    Date: 2017–01–01
  12. By: Evelien de Hoop (Utrecht University - Copernicus Institute of Sustainable Development); Saurabh Arora (University of Sussex - Science and Technology Policy Research Unit (SPRU))
    Abstract: Following its 2003 biodiesel mission, the Indian national government released its policy on biodiesel in December 2009. We study the making of this policy, viewing it as a set of propositions that have been progressively assembled, constituted by many voices. This policy-making process is considered democratic if the propositions were well-articulated. Such a proposition, following Isabelle Stengers and Bruno Latour, is one that has registered the voices of many different entities, human and nonhuman, including those which were hitherto mute. In addition, the process of making a well-articulated proposition must have allowed the registered entities to challenge and recompose the proposition; must not have turned the entities’ actions and voices into a repetitive singularity; and resulted in propositions that are not easily transferrable between different socio-ecological situations. Based on 72 qualitative interviews combined with ethnographic fieldwork, we provide a thick description of the engagements of multiple human and nonhuman entities with the policy-making process. We conclude that while the Indian government’s policy-making may be viewed as an attempt to perform ‘policy democracy’, which partially responded to some entities’ recalcitrance, it failed to register crucial voices associated with biodiesel production such as water and CO2. It also turned many voices into repetitive singularities, discounting the different articulations through which an entity may speak in multiple voices and be enacted in different socio-ecological settings. In this way, the policy’s propositions have remained easily transferrable between diverse socio-ecological situations, ignoring how the immense diversity of India’s lands, their inhabitants and their practices, matters in biodiesel production. Finally, many entities’ voices that were relevant for the entire policy, such as ‘environmentally sustainable development’ were only articulated in relation to one proposition. The latter may therefore be viewed as a lack of overall consistency.
    Keywords: Actor-network theory, policy analysis, India, biodiesel, practice, articulation
    Date: 2017–01
  13. By: Gianluca Misuraca (European Commission – JRC); Giulio Pasi (European Commission – JRC); Dimitri Gagliardi; Fabienne Abadie (European Commission – JRC)
    Abstract: This issue of the ‘JRC Insights’ discusses how ICT-enabled social innovation initiatives that promote social investment through integrated approaches to social services delivery can contribute to the policy objectives of the EU Social Investment Package. Digitally-enhanced social service delivery can promote social investment. ICTs often play a game-changing role in the development of platforms that support innovative partnerships. Here, social challenges can be addressed by focusing on two objectives: (i) the modernisation of social protection systems in the EU Member States and, (ii) promoting experimental approaches to innovation-driven social investments. Modernisation and experimentation in social protection systems has been revived by the emergence of a new type of business, private or not for profit, in the field of social services. These businesses explore or even co-create innovative financial instruments. In particular, evidence gathered shows that ICT-enabled social innovation initiatives respond to the social needs of society or specific groups in society by facilitating co-creation and co-production processes. These processes enrich policy design with stakeholders' specific knowledge and competencies. ICT-enabled social innovation initiatives have the capacity to identify emerging or unmet needs, engage stakeholders and turn their governance models into sustainable production processes. This aspect makes their contributions to social investment approaches particularly apt.
    Keywords: Social investment, social policy innovation, SIP, Social Investment Package, social economy, social enterprise, ICT enabled social innovation, ICT, services, social protection, social welfare
    Date: 2017–01
  14. By: Kesternich, Martin; Goeschl, Timo; Lohse, Johannes; Römer, Daniel; Reif, Christiane
    Abstract: We present experimental evidence that illuminates the trade-off between efficiency considerations and social identity concerns in an inter-city multilevel public goods game. In total, 616 inhabitants of Heidelberg and Mannheim take part in an online experiment in which they can allocate an initial endowment between a private account, an excludable (local) public good, and a non-excludable (regional) public good. We vary the efficiency of the two public goods and find that participants substitute contributions away from the local to the regional public good if the latter is more efficient. To investigate the role of social identity considerations we compare a condition in which the group composition in unknown to a decision in which participants are informed that they share the local public good with three other participants from their own neighborhood. We do not find that a salient common social affiliation affects participants’ behavior per se. If the common local affiliation is revealed through a label, only citizens perceiving a strong local identification adjust their contribution behavior and contribute more to the excludable local public good. Revealing the local affiliation becomes even more effective in a priming condition when participants are remembered of their common local affiliation before they indicate their contribution decision.
    JEL: C90 D70 H41
    Date: 2016
  15. By: Schopf, Mark; Voss, Achim
    Abstract: In this article, we propose a sequential Nash bargaining solution and apply it to a dynamic bargaining game on exhaustible-resource extraction. The government and two agents bargain via the asymmetric Nash bargaining solution. Should the trilateral negotiation fail, the government chooses one agent for a bilateral negotiation. In this negotiation, the disagreement point is to bargain with the other agent. Finally, should this second bilateral negotiation break down, the government chooses the welfare maximizing policy. In our dynamic bargaining game, the environmental organization is willing to pay for less extraction, because of stock-pollution effects, while the extraction firm is willing to pay for extraction per se. The government dislikes extraction, because of flow-pollution effects, but is willing to accept some if it is paid for it. It turns out that the disagreement point in the trilateral negotiation is always to bargain with the environmental organization. This is because there is no conflict of interest between the government and the environmental organization concerning extraction. However, as long as stock pollution is still low, it might be optimal for the environmental organization to let this bilateral negotiation break down. We demonstrate how these considerations shape the payments in case of agreement and disagreement, in total and over time.
    JEL: C71 D72 Q58
    Date: 2016

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