nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2017‒02‒19
thirteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Political Competition with Endogenous Party Formation and Citizen Activists By Hansen, Emanuel
  2. Vetoing and Inaugurating Policy Like Others Do: Evidence on Spatial Interactions in Voter Initiatives By Streif, Frank; Asatryan, Zareh; Havlik, Annika
  3. The Swing Voter's Curse in Social Networks By Buechel, Berno; Mechtenberg, Lydia
  4. Collective Memories, Propaganda and Authoritarian Political Support By Alessandro Belmonte; Michael Rochlitz
  5. Electoral Choices and Basic Values of Russians By Alexander Tatarko; Anna Mironova
  6. Politicization, party politics and military missions deployment votes in France, Germany, Spain, and the United Kingdom By Wagner, Wolfgang; Herranz-Surrallés, Anna; Kaarbo, Juliet; Ostermann, Falk
  7. Cooperation in a differentiated duopoly when information is dispersed: A beauty contest game with endogenous concern for coordination By Camille Cornand; Rodolphe Dos Santos Ferreira
  8. Postliberation Politics: Evidence from Demographic Determinants of South Africa Voting Behaviour in the 2009 National Election By Johannes W. Fedderke; Margaux Giannaros
  9. Emission taxes, lobbying, and incomplete enforcement By Gerigk, Joschka
  10. How do inventor networks affect urban invention? By Laurent BERGÉ; Pascale ROUX; Nicolas CARAYOL
  11. Evidence of Conditional and Unconditional Cooperation in a Public Goods Game: Experimental Evidence from Mali By Lopera Baena, Maria Adelaida
  12. Centralizing information improves market efficiency more than increasing information: Results from experimental asset markets By Barreda Tarrazona, Iván J.; Grimalda, Gianluca; Morone, Andrea; Nuzzo, Simone; Teglio, Andrea
  13. A hybrid approach for risk assessment of loan guarantee network By Zhibin Niu; Dawei Cheng; Junchi Yan; Jiawan Zhang; Liqing Zhang; Hongyuan Zha

  1. By: Hansen, Emanuel
    Abstract: The paper studies political competition between endogenously formed parties instead of independent candidates. Party formation allows policy-motivated citizens to nominate one of their fellow party members as their candidate for a general election and to share the cost of running in this election. Thus, like-minded citizens are able to coordinate their political behavior in order to improve the policy outcome. The paper focuses on political equilibria with two active parties, and investigates the properties of stable parties and the policy platforms offered in equilibrium. The platforms of both parties can neither be fully convergent as in the median voter model (Downs 1957) nor extremely polarized as in the citizen candidate model (Besley & Coate 1997). In the benchmark case of full electoral certainty, a unique political equilibrium with positive platform distance exists. Endogenous party formation thus eliminates a major weakness of the citizen candidate model, the extreme multiplicity of equilibria. The model remains tractable, and the qualitative results are shown to be robust under the assumption of electoral uncertainty, where vote results cannot be perfectly predicted.
    JEL: D72 D78 C72
    Date: 2016
  2. By: Streif, Frank; Asatryan, Zareh; Havlik, Annika
    Abstract: A sizeable literature studies whether governments strategically interact with each other through policy-diffusion, learning, fiscal and yardstick competition. This paper asks whether, in the presence of direct democratic institutions, spatial interactions additionally result from voters' direct actions. The proposed mechanism is that the voters' actions in vetoing a decision or inaugurating a preferred policy by a binding initiative in their jurisdiction can potentially have spillover effects on the actions of voters and special interest groups of neighboring jurisdictions. Utilizing data on around 1,800 voter-petitions across over 12,000 German municipalities in 2002-09, we find that a jurisdiction's probability of hosting a petition is positively driven by the neighbors' direct democratic activity. These effects are persistent, and are stronger for more visible instruments of direct democracy. The interactions are also mostly driven by petitions in same or similar policy areas, and are stronger in towns with relatively more per capita newspapers.
    JEL: D72 D78 R50
    Date: 2016
  3. By: Buechel, Berno; Mechtenberg, Lydia
    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, Research Methods/ Statistical Methods, D72, D83, D85, C91,
    Date: 2017–02–08
  4. By: Alessandro Belmonte (IMT Alti Studi Lucca); Michael Rochlitz (National Research University Higher School of Economics)
    Abstract: To what extent does the degree of authoritarian political support depend on collective memories of a past experience with democracy? And how costly is it for a dictator to manipulate such memories with the help of propaganda? In this paper, we develop a political economy model with endogenous reference points, where a dictator strategically recalls traumatic collective memories of past political instability with the help of propaganda, to convince the population that an autocratic status quo is superior to a potential democratic alternative. In our model, both the optimal level of propaganda and collective memories are jointly determined. We show how the marginal bene t of propaganda is positively correlated both with the amount of rent distribution within the elite, and the intensity of a past traumatic experience with democracy. We illustrate our theoretical findings with case-studies of two authoritarian regimes that were preceded by periods of political instability|the Russian Federation under Vladimir Putin, and Chile under Augusto Pinochet. We then also provide cross-country empirical evidence in support of our argument.
    Keywords: collective memory, propaganda, political support, rebellion, private investment
    JEL: D74 D83 P16 Z13
    Date: 2017
  5. By: Alexander Tatarko (National Research University Higher School of Economics); Anna Mironova (National Research University Higher School of Economics)
    Abstract: This research assesses which values were related to the voting results of the Russian presidential election in March 2012. This empirical study was based on the results of a representative poll conducted in two federal districts of Russia (N=2058), which was held shortly after the elections. Participants were given Schwartz’s values questionnaire and were asked which of the five Russian presidency candidates they voted for. Empirical analysis showed that the respondents’ values were related to their political preferences. The study showed that the conservation–openness to change values were related to participants’ voting choices. The conservation values were related to four of the five candidates, which suggest an absence of key differences in the values represented by these politicians
    Keywords: basic values, political behaviour, voting, elections.
    JEL: Z
    Date: 2017
  6. By: Wagner, Wolfgang; Herranz-Surrallés, Anna; Kaarbo, Juliet; Ostermann, Falk
    Abstract: This paper examines whether decisions at the core of international security politics, namely decisions on the deployment of military forces, have undergone a process of politicization. It is guided by two interrelated questions, namely a) whether deployment decisions have been politically contested and b) what kind of party-political cleavage has emerged in this process. We examine data from the Chapel Hill Expert Survey (CHES) as well as data that we gathered on parliamentary votes on deployment decisions in France, Germany, Spain and the United Kingdom. We find that military deployments have indeed been contested amongst political parties. Further and notwithstanding country-specific peculiarities, we find that the partypolitical cleavage is by and large captured by the left/right-axis.
    Keywords: party-political contestation,parliamentary vote,foreign policy,Militäreinsätze,politische Parteien,Politisierung,Parlamentee
    Date: 2017
  7. By: Camille Cornand; Rodolphe Dos Santos Ferreira
    Abstract: The paper provides a micra-founded differentiated duopoly illustration of a beauty contest, in which the weight put on the strategic vs. the fundamental motive of the pay­ offs is not exogenous but may be manipulated by the players. We emphasize the role of the competition component of the strategic motive as a source of conflict with the fun­ damental motive. This conflict, already present in an oligopolistic setting under perfect information, is only exacerbated when information is imperfect and dispersed. We show how firm owners ease such conflict by opting for sorne cooperation, thus moderating the competitive toughness displayed by their managers. By doing so, they also influence the managers' strategic concern for coordination and consequently the weight put on public relative to private information.
    Keywords: beauty contest, competition, cooperation, coordination, differentiated duopoly, dispersed information, public information.
    JEL: D43 D82 L13 L21
    Date: 2017
  8. By: Johannes W. Fedderke; Margaux Giannaros
    Abstract: In this paper we examine demographic drivers of South African voting behavior in the 2009 national election. We use a novel data set, which combines census and voting data at the ward level, representing the highest level of disaggregation of South African elections to date. Unsurprisingly, blacks are more likely to vote for the ANC, whites more likely to vote for the DA, and rising incomes and greater security in the labor market predict a switch in allegiance from the ANC to the DA. Allowing for an interaction between income and race, reduces the impact of racial identity for the major parties. A striking finding is that DA voter support is disproportionately strong amongst poor black (and other race group) voters - a result that is present for every province. The result is consistent for the findings we report for the impact of income and the nature of labor force participation.
    Date: 2017–01
  9. By: Gerigk, Joschka
    Abstract: In this paper, I analyze incomplete enforcement in a political economy model. I use a contest framework to explain changes in lobbying behavior when special interest groups anticipate the incomplete enforceability of environmental regulation. In this setting, I compare two instruments, namely an abatement standard and an emission tax. Regulation of a polluting output is proposed and two lobby groups - representing the interests of producers and environmentalists, respectively - seek to influence the government in order to prevent or support the implementation of the regulation. I develop a general framework to demonstrate that the lobbying efforts are determined not only by the stringency of the proposed policy - as determined by the level of the tax or abatement standard - but, importantly, also by its enforceability. Using common functional specifications, I then show that, when an emission tax is proposed, incomplete enforcement may not only reduce the industry's opposition to regulation compared to a situation with full enforcement, but it may, despite the possibility of untruthful reporting, also reduce expected environmental damage. When instead an abatement standard is proposed, however, the effects of regulatory stringency and enforceability are ambiguous, rendering unequivocal policy recommendations for this case impossible.
    JEL: D72 L51 Q58
    Date: 2016
  10. By: Laurent BERGÉ; Pascale ROUX; Nicolas CARAYOL
    Abstract: Social networks are expected to matter for invention in cities, but empirical evidence is still puzzling. In this paper, we provide new results on urban patenting covering more than twenty years of European patents invented by nearly one hundred thousand inventors located in France. Elaborating on the recent economic literatures on peer effects and on games in social networks, we assume that the productivity of an inventor\'s efforts is positively affected by the efforts of his or her partners and negatively by the number of these partners\' connections. In this framework, inventors\' equilibrium outcomes are proportional to the square of their network centrality, which encompasses, as special cases, several well-known forms of centrality (Degree, Katz-Bonacich, Page-Rank). Our empirical results show that urban inventors benefit from their collaboration network. Their productivity increases when they collaborate with more central agents and when they have more collaborations. Our estimations suggest that inventors\' productivity grows sublinearly with the efforts of direct partners, and that they incur no negative externality from them having many partners. Overall, we estimate that a one standard deviation increase in local inventors\' centrality raises future urban patenting by 13%.
    Keywords: invention, cities, network centrality, co-invention network, patent data
    JEL: O31 R11 D85
    Date: 2017
  11. By: Lopera Baena, Maria Adelaida
    Abstract: This paper measures the relative importance of "conditional cooperation" and "unconditional cooperation" in a large public goods experiment conducted in Mali. We use expectations about total public goods provision to estimate a structural choice model with heterogeneous preferences. While unconditional cooperation can be captured by common preferences shared by all participants, conditional cooperation is much more heterogeneous and depends on unobserved individual factors. This structural model, in combination with two experimental treatments, suggests that leadership and group communication incentivize public goods provision through different channels. First, We find that participation of local leaders effectively changes individual choices through unconditional cooperation. A simulation exercise predicts that even in the most pessimistic scenario in which all participants expect zero public good provision, 60% would still choose to cooperate. Second, allowing participants to communicate fosters conditional cooperation. The simulations suggest that expectations are responsible for around 24% of the observed public good provision and that group communication does not necessarily ameliorate public good provision. In fact, communication may even worsen the outcome when expectations are low.
    JEL: C93 D03 H41
    Date: 2016
  12. By: Barreda Tarrazona, Iván J.; Grimalda, Gianluca; Morone, Andrea; Nuzzo, Simone; Teglio, Andrea
    Abstract: We study the relationship between market efficiency and the distribution of private information in experimental financial asset markets. Traders receive imperfect signals over the real value of an asset. Agents can share their information within a relatively small - compared to market size - group of agents. Both the number of signals and the way these are allocated among agents are manipulated in four experimental treatments. In two treatments signals are evenly distributed among agents. In two other treatments one group of 'quasi-insider' agents receives more signals than all other groups. In the baseline condition no signal is distributed. We show that centralizing information unambiguously achieves higher market efficiency than spreading information evenly. Furthermore, increasing the amount of information has no effect on efficiency either when information is symmetric or when it is asymmetric. We argue that two complementary mechanisms drive these results. First, having more private information ex ante induces traders to rely on their own signals, reducing the expected benefits of sharing information. Second, the presence of quasi-insider being common knowledge prompts agents to extract more information from market prices rather than their own private signals. This leads to swift information aggregation.
    Keywords: Experimental Markets,Information Aggregation,Market Cooperation
    Date: 2017
  13. By: Zhibin Niu; Dawei Cheng; Junchi Yan; Jiawan Zhang; Liqing Zhang; Hongyuan Zha
    Abstract: Groups of Small and Medium Enterprises (SME) back each other and form guarantee network to obtain loan from banks. The risk over the networked enterprises may cause significant contagious damage. To dissolve such risks, we propose a hybrid feature representation, which is feeded into a gradient boosting model for credit risk assessment of guarantee network. Empirical study is performed on a ten-year guarantee loan record from commercial banks. We find that often hundreds or thousands of enterprises back each other and constitute a sparse complex network. We study the risk of various structures of loan guarantee network, and observe the high correlation between defaults with centrality, and with the communities of the network. In particular, our quantitative risk evaluation model shows promising prediction performance on real-world data, which can be useful to both regulators and stakeholders.
    Date: 2017–02

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