nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2017‒03‒26
twelve papers chosen by
Stan C. Weeber, McNeese State University

  1. Targeted campaign competition, loyal voters, and supermajorities By Pierre C. Boyer; Kai A. Konrad; Brian Roberson
  2. Procedural Fairness and Economic Voting By Pedro C. Magalhães; Luís Aguiar-Conraria
  3. Exposing corruption: Can electoral competition discipline politicians? By Afridi, Farzana; Dhillon, Amrita; Solan, Eilon
  4. Formation of coalition structures as a non-cooperative game By Dmitry Levando
  5. Constrained Allocation of Projects to Heterogenous Workers with Preferences over Peers By Flip Klijn
  6. Changed Regimes, Changed Priorities? Economic and Social Policies after the 2011 Elections in Tunisia and Egypt By Eberhard Kienle
  7. How economic, humanitarian, and religious concerns shape European attitudes toward asylum seekers By Kirk Bansak; Jens Hainmueller; Dominik Hangartner
  8. It's a matter of confidence: Institutions, government stability and economic outcomes By Bettareli, Luca; Cella, Michela; Iannantuoni, Giovanna; Manzoni, Elena
  9. The Economic Determinants of Political Islam: an Empirical Investigation of the Arab Spring in Egypt By May Attallah
  10. Innovation and Regional Specialisation in Latin America By Belen Barroeta; Javier Gomez Prieto; Jonatan Paton; Manuel Palazuelos Martinez; Marcelino Cabrera Giraldez
  11. Homophily and the Persistence of Disagreement By Melguizo, Isabel
  12. Direct democracy and government size: evidence from Spain By Carlos Sanz

  1. By: Pierre C. Boyer (CREST, Ecole Polytechnique, Universit´e Paris-Saclay, Route de Saclay, 91128 Palaiseau, France); Kai A. Konrad (Max Planck Institute for Tax Law and Public Finance); Brian Roberson (Purdue University, Department of Economics, Krannert School of Management)
    Abstract: We consider campaign competition in which candidates compete for votes among a continuum of voters by engaging in persuasive efforts that are targetable. Each individual voter is persuaded by campaign effort and votes for the candidate who targets more persuasive effort to this voter. Each candidate chooses a level of total campaign effort and allocates their effort among the set of voters. We completely characterize equilibrium for the majoritarian objective game and compare that to the vote-share maximizing game. If the candidates are symmetric ex ante, both types of electoral competition dissipate the rents from office in expectation. However, the equilibria arising under the two electoral objectives qualitatively differ. In majoritarian elections, candidates randomize over their level of total campaign effort, which provides support for the puzzling phenomenon of the emergence of supermajorities in majoritarian systems. Vote-share maximization leads to an equilibrium in which both candidates make deterministic budget choices and reach a precise fifty-fifty split of vote shares. We also study how asymmetry between the candidates affects the equilibrium. If some share of the voters is loyal to one of the candidates, then both candidates expend the same expected efforts in equilibrium, but the advantaged candidate wins with higher probability for majoritarian voting or a higher share of voters for vote-share maximization.
    Keywords: Campaign competition; continuous General Lotto game; vote buying; flexible budgets; supermajorities, loyal voters.
    JEL: D72 D78 D82
    Date: 2017
  2. By: Pedro C. Magalhães (ICS-University of Lisbon); Luís Aguiar-Conraria (Department of Economics/NIPE, University of Minho)
    Abstract: What accounts for the instability of economic voting? Contextual factors assumed so far to affect this relationship include the degree of control over the economy exerted by governments, their partisan-ideological composition, or even voters’ experience with democratic elections. In this paper, we provide an alternative account. Based on a vast literature originating in social and organizational psychology, we propose the existence of a process-outcome interaction: short-term outcomes matter, but the weight voters assign to them depends on the extent to which governance is perceived to adhere to principles of procedural fairness. Based on data on twenty years of elections in the OECD countries, we show that the strength of the relationship between GDP growth and the share of the vote for the incumbent parties does depends on the perceived procedural fairness in governance. We conduct extensive robustness tests, including the use of alternative indicators of fairness and survey data.
    Date: 2017
  3. By: Afridi, Farzana (Economics and Planning Unit, Indian Statistical Institute, Delhi and IZA, Bonn); Dhillon, Amrita (Department of Political Economy, Kings College, London, and CAGE, University of Warwick.); Solan, Eilon (School of Mathematical Sciences, Tel Aviv University)
    Abstract: In developing countries with weak institutions, there is implicitly a large reliance on elections to instil norms of accountability and reduce corruption. In this paper we show that electoral discipline may be ineffective in reducing corruption when political competition is too high or too low. We first build a simple game theoretic model to capture the effect of electoral competition on corruption. We show that in equilibrium, corruption has a U-shaped relationship with electoral competition. If the election is safe for the incumbent (low competition) or if it is extremely fragile (high competition) then corruption is higher, and for intermediate levels of competition, corruption is lower. We also predict that when there are different types of corruption, then incumbents increase corruption in the components that voters care less about regardless of competition. We test the model’s predictions using data gathered on audit findings of leakages from a large public program in Indian villages belonging to the state of Andhra Pradesh during 2006-10 and on elections to the village council headship in 2006. Our results largely confirm the theoretical results that competition has a non-linear effect on corruption, and that the impact of electoral competition varies by whether theft is from the public or private component of the service delivery. Overall, our results suggest that over-reliance on elections to discipline politicians is misplaced.
    Keywords: Corruption, Electoral Competition, Audit, Social Acountability. JEL Classification: D72, D82, H75, O43, C72
    Date: 2016
  4. 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. Every game has two outcomes - an allocation of players over coalitions and a payoff profile for every player. Every game in the family has an equilibrium in mixed strategies. The equilibrium can generate more than one coalition with a presence of intra and inter group externalities. These properties make it different from the Shapley value, strong Nash, coalition-proof equilibrium, core, kernel, nucleolus. The paper demonstrates some applications: non-cooperative cooperation, Bayesian game, stochastic games and construction of a non-cooperative criterion of coalition structure stability for studying focal points. An example demonstrates that a payoff profile in the Prisoners' Dilemma is non-informative to deduce a cooperation of players
    Keywords: Non-cooperative Games
    JEL: C71 C72 C73
    Date: 2017–02
  5. By: Flip Klijn
    Abstract: We study the problem of allocating projects to heterogenous workers. The simultaneous execution of multiple projects imposes constraints across project teams. Each worker has preferences over the combinations of projects in which he can potentially participate and his team members in any of these projects. We propose a revelation mechanism that is Pareto-efficient and group strategy-proof (Theorem 1). We also identify two preference domains on which the mechanism is strongly group strategy-proof (Theorem 2). Our results subsume results by Monte and Tumennasan (2013) and Kamiyama (2013).
    Keywords: matching; allocation; heterogenous agents; preferences over peers; efficiency; (group) strategy-proofness
    JEL: C78 D61 D78 I20
    Date: 2017–03
  6. By: Eberhard Kienle (CNRS Paris/ Ifpo Beirut)
    Abstract: This paper seeks to examine the economic and social policies that key political actors in Tunisia and Egypt advocated and partly implemented after the departure of the former authoritarian rulers, Zin al-Abdin Bin Ali and Husni Mubarak. The paper focuses on actors strong enough to directly influence policy choices: parties that were part of however informal parliamentary majorities, governments, and, in the case of Egypt, the president of the republic, who in line with constitutional arrangements, wielded important powers. The paper first summarizes the economic and social policies publicly advocated by the parties and individuals who dominated elected assemblies and executives after the fall of former autocrats. It then discusses the policies that the new Islamist rulers implemented from their election in late 2011 until the summer of 2013 (subsequent publications will cover longer periods of time). In a third step, both policy statements and decisions are examined in the light of assumptions about the origins of the Arab Spring and compared with policies under the old regimes and their effects.
    Date: 2015–07
  7. By: Kirk Bansak; Jens Hainmueller; Dominik Hangartner
    Abstract: What types of asylum seekers are Europeans willing to accept? We conducted a conjoint experiment asking 18,000 eligible voters in 15 European countries to evaluate 180,000 profiles of asylum seekers that randomly varied on nine attributes. Asylum seekers who have higher employability, have more consistent asylum testimonies and severe vulnerabilities, and are Christian rather than Muslim received the greatest public support. These results suggest that public preferences over asylum seekers are shaped by sociotropic evaluations of their potential economic contributions, humanitarian concerns about the deservingness of their claims, and anti-Muslim bias. These preferences are similar across respondents of different age, education, income, and political ideology, as well as across the surveyed countries. This public consensus on what types of asylum seekers to accept has important implications for theory and policy.
    JEL: N0
    Date: 2016–10–14
  8. By: Bettareli, Luca; Cella, Michela; Iannantuoni, Giovanna; Manzoni, Elena
    Abstract: In this paper, we analyse the effect of constitutional structures on policy outcomes. In particular, we exploit heterogeneity in parliamentary systems deriving from the presence and the use of the confidence vote to investigate whether stable and unstable parliamentary systems behave differently in terms of the policy they implement. This finer partition of parliamentary systems allows us to identify effects that are more robust than those in the literature. We show that the difference between presidential and parliamentary systems documented in previous works is driven by a difference between presidential and stable parliamentary systems. We suggest that possible transmission channels are legislative cohesion and (the absence of) selection.
    Keywords: presidential system, parliamentary system, confidence vote, government stability
    JEL: C72 D72 H11
    Date: 2017–03–08
  9. By: May Attallah (CREM-University of Rennes 1)
    Abstract: This paper empirically studies the voting outcomes of the first post-revolution presidential elections in Egypt. In light of the strong success of Islamist candidate Mohamed Morsi, I identify three dimensions which can affect voting outcomes: human capital stock, wealth and employment structure. I find that less educated, poorer and more unequal districts support more Islamists. I also find an effect of the employment structure of a district on voting. I test the results by comparing the voting outcomes of the presidential elections to those of the 2011 and 2012 constitutional referendum.
    Date: 2015–09
  10. By: Belen Barroeta; Javier Gomez Prieto (European Commission - JRC); Jonatan Paton; Manuel Palazuelos Martinez (European Commission - JRC); Marcelino Cabrera Giraldez (European Commission - JRC)
    Abstract: The Smart Specialisation concept, currently implemented in the European Union, is being widely considered by several countries and regions of Latin-America. The interest towards this approach, highly based on the enhancement of regional innovation capacities, is motivating territorial dialogues, participatory processes and collective vision related to the innovation perspectives of Latin-American regions. This article highlights how policy makers of Mexico, Brazil, Colombia, Peru, Chile and Argentina are considering the smart specialisation concept as an inspirational driver of regional innovation and specialisation. Understanding the socio-economic and contextual differences between EU and Latin-America, this working paper does not seek to elaborate value judgements on the way in which smart specialisation is being (or should be) adapted beyond the EU. Instead, the analysis seeks to emphasise the common tendencies of the concept implementation as a way to frame cooperation between regions of the EU and Latin-America.
    Keywords: Smart Specialisation, Regional Innovation, Cooperation, European Union, Latin America
    Date: 2017–03
  11. By: Melguizo, Isabel
    Abstract: We study a dynamic model of attitude formation in which individuals average others' attitudes to develop their own. We assume that individuals exhibit homophily in sociodemographic exogenous attributes, that is, the attention they pay to each other is based on whether they possess similar attributes. We also assume that individuals exhibit homophily in attitudes, at the group level. Specifically, attributes that are salient, that is, that exhibit a substantial difference in attitudes between the groups of individuals possessing and lacking them, deserve high attention. Since we allow attention to evolve over time we prove that when there is, initially, a unique most salient attribute, it deserves growing attention overtime in detriment of the remaining ones. As a result, individuals eventually interact only with others similar to them across this attribute and disagreement persists. It materializes in two groups of thinking defined according to this attribute.
    Keywords: disagreement, homophily, average-based updating
    JEL: D83 D85 Z13
    Date: 2017–01
  12. By: Carlos Sanz (Banco de España)
    Abstract: Direct democracy is spreading across the world, but little is known about its effects on policy. I provide evidence from a unique scenario. In Spain, national law determines that municipalities follow either direct or representative democracy, depending on their population. Regression discontinuity estimates indicate that direct democracy leads to smaller government, reducing public spending by around 8%. Public revenue decreases by a similar amount and, therefore, there is no effect on budget defi cits. These fi ndings can be explained by a model in which direct democracy allows voters to enforce lower specialinterest spending.
    Keywords: public finance, political economy, direct democracy, government spending,deficits, budget, regression discontinuity
    JEL: D7 H
    Date: 2017–03

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