nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2017‒03‒12
thirteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Endogenous Sanctioning Institutions and Migration Patterns: Experimental Evidence By Ramon Cobo-Reyes; Gabriel Katz; Simone Meraglia?
  2. Historical Roots of Political Extremism: The Effects of Nazi Occupation of Italy By Fontana, Nicola; Nannicini, Tommaso; Tabellini, Guido
  3. Leveling up? An inter-neighborhood experiment on parochialism and the efficiency of multi-level public goods provision By Gallier, Carlo; Goeschl, Timo; Kesternich, Martin; Lohse, Johannes; Reif, Christiane; Römer, Daniel
  4. A composition-consistency characterization of the plurality rule By Z. Emel Ozturk
  5. Housing booms and busts and local fiscal policy By Albert Solé-Ollé; Elisabet Viladecans-Marsal
  6. Flip a coin or vote: An Experiment on Choosing Group Decision Rules By Hoffmann, Timo; Renes, Sander
  7. Community through digital connectivity? Communication infrastructure in multicultural London: final report By Myria Georgiou; Wallis Motta; Sonia Livingstone
  8. Cooperation, Framing and Political Attitudes By Fosgaard, Toke R.; Hansen, Lars G.; Wengström, Erik
  9. Demand and Supply of Populism By Guiso, Luigi; Herrera, Helios; Morelli, Massimo; Sonno, Tommaso
  10. Jati, local public goods and village governence: private actions and public outcomes By Raghbendra Jha; Hari K. Nagarajan; Anirudh Tagat
  11. Is Adversity a School of Wisdom? Experimental Evidence on Cooperative Protection Against Stochastic Losses By Nicklisch, Andreas; Köke, Sonja; Lange, Andreas
  12. The accidental Trojan horse: Plea bargaining as an anticorruption tool in Brazil By Fausto de Assis Ribeiro
  13. Gender, Communication Styles, and Leader Effectiveness By Timko, Krisztina

  1. By: Ramon Cobo-Reyes (Department of Economics, University of Exeter); Gabriel Katz (Department of Politics, University of Exeter); Simone Meraglia? (Department of Economics, University of Exeter)
    Abstract: We experimentally analyze the effect of the endogenous choice of sanctioning institutions on cooperation and migration patterns across societies. In our experiment, subjects are allocated to one of two groups, are endowed with group-specific preferences, and play a public goods game for 30 periods. Each period, subjects can move between groups and, at fixed intervals, can vote on whether to implement formal (centralized) sanctioning institutions in their group. We compare this environment to one in which only one group is exogenously endowed with sanctioning institutions. We find that subjects' ability to vote on institutions leads to (i) a more efficient partition of subjects between groups, (ii) a lower migration rate, (iii) an increase in overall payoffs, and (iv) a decrease in both inter- and intra-groups (payoff) inequality. Over time, subjects tend to vote for sanctioning institutions and contribute to the public good.
    Keywords: Formal Sanctions, Cooperation, Migration, Voting, Experiment.
    JEL: C73 C91 C92 D72 H41 H73
    Date: 2017
  2. By: Fontana, Nicola (London School of Economics); Nannicini, Tommaso (Bocconi University); Tabellini, Guido (Bocconi University)
    Abstract: The Italian civil war and the Nazi occupation of Italy occurred at a critical juncture, just before the birth of a new democracy and when, for the first time in a generation, Italians were choosing political affiliations and forming political identities. In this paper we study how these traumatic events shaped the new political system. We exploit geographic heterogeneity in the intensity and duration of the civil war, and the persistence of the battlefront along the "Gothic line" cutting through Northern-Central Italy. We find that the Communist Party gained votes in the post-war elections where the Nazi occupation and the civil war lasted longer, mainly at the expense of the centrist and catholic parties. This effect persists until the early 1990s. Evidence also suggests that this is due to an effect on political attitudes. Thus, the foreign occupation and the civil war left a lasting legacy of political extremism and polarization on the newborn Italian democracy.
    Keywords: political extremism, path dependence, regression discontinuity design
    JEL: D72 C21
    Date: 2017–02
  3. By: Gallier, Carlo; Goeschl, Timo; Kesternich, Martin; Lohse, Johannes; Reif, Christiane; Römer, Daniel
    Abstract: Many public goods can be provided at different spatial levels. Evidence from social identity theory and in-group favoritism raises the possibility that where higher-level provision is more efficient, subjects' narrow concern for local outcomes (parochialism) could harm efficiency. Building on the experimental paradigm of multi-level public good games and the 'neighborhood attachment' concept, we conduct an artefactual field experiment with 600 participants in a setting conducive to parochial behavior. In an inter-neighborhood intra-region design, subjects allocate an endowment between a personal account, a local, and a regional public good account. The between-subjects design varies across two dimensions: One informs subjects that the smaller local group consists of members from their own neighborhood ('neighbors'). The other varies the relative productivity at the two public goods provision levels. We find evidence for parochialism, but contrary to our hypothesis, parochialism does not interfere with efficiency: The average subject responds to a change in relative productivities at the local and regional level in the same way, whether aware of their neighbors' presence in the small group or not. The results even hold for subjects with above-median neighborhood attachment and subjects primed on neighborhood attachment.
    Keywords: social identity,parochialism,multi-level public goods,artefactual field experiment
    JEL: C9 D7 H4
    Date: 2017
  4. By: Z. Emel Ozturk
    Abstract: We consider a collective choice problem in which the number of alternatives and the number of voters may vary. The two fundamental axioms in such a setting are reinforcement and composition-consistency. The former guarantees that the social choice rule cannot be manipulated by partitioning the electorate into sub-electorates. The latter guarantees that the rule cannot be manipulated by altering the set of alternatives entering an election via a procedure called cloning. Brandl et al. (2016) show that reinforcement and composition-consistency are incompatible. We propose a plausible weakening of composition-consistency called composition-consistency for dominated clones. We show that there is only one social choice rule that satisfies reinforcement, unanimity and composition- consistency for dominated clones. The rule is the well-known plurality rule which selects the alternatives top-ranked by the largest number of voters.
    Keywords: Plurality rule, cloning-consistency, composition-consistency, reinforcement
    JEL: D70 D71 D72
    Date: 2017–03
  5. By: Albert Solé-Ollé (Universitat de Barcelona & IEB); Elisabet Viladecans-Marsal (Universitat de Barcelona & IEB & CEPR)
    Abstract: This paper examines how local governments adjust their spending, savings and taxes in response to a temporary revenue windfall generated by a housing boom and how they cope with the inevitable shortfall that appears during the bust. We focus on Spanish local governments given the intensity of the last housing boom-bust experienced there and the large share of construction-related revenues they obtain. We find, first, that just a small share of the boom windfall was saved, with revenues being used primarily to increase spending (above all, current spending) and (to a lesser extent) cut taxes. Second, we find that the failure to save during the boom is higher in places with less informed voters and more contested elections. Third, we also examine what happens during the bust, and find that these governments had to cut abruptly their spending (above all, capital), raise taxes, and allow deficits to grow. Finally, in places wit less informed voters and more contested elections local governments had more trouble in adjusting during the bust, and they tend to rely more on spending cuts than on tax increases.
    Keywords: Tax volatility, forward-looking behavior, policy myopia
    JEL: E62 H72 R5
    Date: 2017
  6. By: Hoffmann, Timo; Renes, Sander
    Abstract: Before a group can take a decision, its members must agree on a mechanism to aggregate individual preferences. In this paper we present the results of an experiment on the influence of private payoff information and the role of the available alternatives on individuals’ mechanism choices in such group choice situations. While efficient mechanisms are desirable, we experimentally show that participation constraints can prevent their implementation. We find strong indications that individual preferences for choice rules are sensitive to individual expected payoffs. Our results highlight the importance of considering participation constraints when designing choice institutions.
    JEL: C91 D70 D82
    Date: 2016
  7. By: Myria Georgiou; Wallis Motta; Sonia Livingstone
    Abstract: This project, supported by an LSE Seed grant, examines the role that communication plays in promoting and hindering community among London’s diverse populations. While symbolic and structural resources such as education, local institutions and property have been systematically studied as community-building resources, communication infrastructures are little studied and their potential as a community asset largely unrecognised. Yet with over half of the world population now inhabiting cities (UN 2010), how people communicate across or withdraw from difference in urban societies matters greatly. For London, the most culturally diverse city in the world and one of the most connected (Massey 2005), these questions are pressing. How does London’s rich communication infrastructure enable Londoners to communicate with each other? Does this in turn contribute to social capital and building community? Or does it segregate people across cultural and generational lines? By focusing on a highly culturally diverse part of London – Harringay, North London – this study examines the role of communication infrastructure in bridging, bonding and separating the different groups occupying the same locale. It focuses on communication assets – the resources that enhance urban dwellers’ social capital, sense of belonging and mutual understanding. Its main research question is: In what ways does communication infrastructure mobilise Haringey’s diverse population in building social capital and community? Conceptually, we juxtapose the original theory of communication infrastructure developed by Ball-Rokeach and her research team under the Metamorphosis project with Bourdieu’s social capital. The communication infrastructure theory takes an ecological approach to understanding the role of communication of all kinds in promoting or undermining belonging, civic engagement and collective efficacy (Ball-Rokeach, Kim and Matei, 2001; Kim and Ball-Rokeach, 2006). We explore this theory alongside and vis-à-vis Bourdieu’s (1985, 1992) conception of social capital as the sum of resources that accrue to the possession of durable networks of sustained (institutionalised) relations and recognition. These approaches provide interesting parallels in how practices of communication and sociability support groups’ efforts to gain access to resources that will advance their symbolic and material power. Our particular focus is on how different local groups mobilise knowledge and information resources for work, education, health and leisure. The project adopts a multi-method approach, which includes creative and participatory tools for data collection, locale mapping and community sharing alongside established methods in social sciences.
    JEL: L91 L96
    Date: 2016
  8. By: Fosgaard, Toke R. (Department of Food and Resource Economics, University of Copenhagen); Hansen, Lars G. (Department of Food and Resource Economics, University of Copenhagen); Wengström, Erik (Department of Economics, Lund University)
    Abstract: This paper shows that political attitudes are linked to cooperative behavior in an incentivized experiment with a large sample randomly drawn from the Danish population. However, this relationship depends on the way the experiment is framed. In the standard game in which subjects give to a public good, contributions are the same regardless of political attitudes. In an economically equivalent version, in which subjects take from a public good, left-wingers cooperate significantly more than subjects in the middle or to the right of the political spectrum. Through simulation techniques we find that this difference in the framing effect across political point of views is to some extent explained by differences in beliefs and basic cooperation preferences.
    Keywords: Cooperation; Social Dilemma; Political Ideology; Experiment; Simulation
    JEL: C90 D03 H41
    Date: 2017–03–02
  9. By: Guiso, Luigi; Herrera, Helios; Morelli, Massimo; Sonno, Tommaso
    Abstract: We defi ne as populist a party that champions short-term protection policies without regard for their long-term costs. First, we study the demand for populism: we analyse the drivers of the populist vote using individual level data from multiple waves of surveys in Europe. Individual voting preferences are influenced directly by different measures of economic insecurity and by the decline in trust in traditional parties. However, economic shocks that undermine voters' security and trust in parties also discourage voter turnout, thus mitigating the estimated demand of populism when ignoring this turnout selection. Economic insecurity affects intentions to vote for populist parties and turnout incentives also indirectly because it causes trust in parties to fall. Second, we study the supply side: we find that populist parties are more likely to appear when the drivers of demand for populism accumulate, and more so in countries with weak checks and balances and with higher political fragmentation. The non-populist parties' policy response is to reduce the distance of their platform from that of new populist entrants, thereby magnifying the aggregate supply of populist policies.
    Keywords: anti-elite rhetoric; short term protection; Voter participation
    Date: 2017–02
  10. By: Raghbendra Jha; Hari K. Nagarajan; Anirudh Tagat
    Abstract: This paper purports to understand whether voting along narrow parochial lines in socially and ethnically fragmented societies has measurable gains. Using data from rural India, we establish that identity based voting, driven by membership in social and informal networks, will lead to enhanced participation in welfare programs, which in turn leads to increased consumption growth. We also show that reducing agency costs does not necessarily remove the need for identity-based voting, and that such voting behaviour is a means for engaging in capture of public and private benefits by these groups. Some policy recommendations are also advanced.
    Keywords: economic development; voting behavior; decentralization; parochial politics
    JEL: D71 D72 H41 O12
    Date: 2017
  11. By: Nicklisch, Andreas; Köke, Sonja; Lange, Andreas
    Abstract: We investigate the dynamics of voluntary cooperation to either reduce the size or the probability of stochastic losses. For variants of a repeated four person prisoner’s dilemma game, we show that cooperation is larger and more stable when it affects the probability rather than the size of the adverse event. We provide crucial insights on behavioral adaptation: defecting players are more likely to switch to cooperation after experiencing an adverse event, while existing cooperation is reinforced when the losses do not occur. This behavior is consistent with simple learning dynamics based on ex post evaluations of the chosen strategy.
    JEL: Q54 H41 C92
    Date: 2016
  12. By: Fausto de Assis Ribeiro
    Abstract: This paper employs the Advocacy Coalition Framework (ACF) as a model to understand the legislative process that led to the implementation of plea bargaining as an anticorruption tool in Brazil. Through the analysis of primary qualitative data, it assesses the political and social forces that formed a coalition and propelled this legislative process forward, thus allowing the posterior emergence of the largest anticorruption judicial action in the history of Brazil. In doing so, it elucidates the reasons that led a systemically corrupt legislative to enact a remarkably effective anticorruption policy, often to the detriment of lawmakers themselves. This paper’s contribution to the literature about the anticorruption framework in Brazil lies in its critical interpretation of the interplay of political forces involved in the early stages of policy formulation. It adds empirical elements to a modern institutional approach to the study of corruption, which derives from classical theories about the formation of Brazilian society. Finally, the paper serves as an illustration of the difficulties inherent to applying the ACF in dysfunctional contexts, such as those marked by systemic corruption.
    Keywords: plea bargaining, corruption, Lava Jato, Advocacy Coalition Framework
    Date: 2017–02–23
  13. By: Timko, Krisztina
    Abstract: We study gender differences in the behavior, communication, and effectiveness of randomly selected leaders in a laboratory experiment using the turnaround game. Leaders can send nonbinding pre‐play text messages to try to convince followers to coordinate on the Pareto‐efficient equilibrium. The treatment variations consist of the gender of the leader, and whether the communication is one‐way (only leaders send messages) or two‐way (first followers send messages to their leader, and subsequently the leader sends messages to the group). We find that male leaders communicate more assertively. Communication with the followers induces female leaders to express significantly more often that they are part of the group, rather than standing above the group. Despite the different paths in communication, both men and women are equally likely to request the highest effort contribution. Men and women are equally effective leaders.
    Keywords: gender differences; leadership; leader effectiveness; coordination
    JEL: C92 J16 M14 M54
    Date: 2017–02–16

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