nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2017‒04‒02
eight papers chosen by
Stan C. Weeber, McNeese State University

  1. Choosing a Public-Spirited Leader. An experimental investigation of political selection By Thomas Markussen; Jean-Robert Tyran
  2. Time to go beyond interstate federalism - or something different? The response of new pro-European think tanks to the EU integration crisis By Plehwe, Dieter; Krämer, Werner; Neujeffski, Moritz; Meland, Alexander; Guérot, Ulrike
  3. Decentralized Despotism? Indirect Colonial Rule Undermines Contemporary Democratic Attitudes By Lechler, Marie; McNamee, Lachlan
  4. Transition from civil war to peace: The role of the United Nations and international community in Mozambique By Adedokun, Ayokunu
  5. Cooperation, framing and political attitudes By Toke R. Fosgaard; Lars G. Hansen; Erik Wengström
  6. Humans’ (incorrect) distrust of reflective decisions By Antonio Cabrales; Antonio M. Espín; Praveen Kujal; Stephen Rassenti
  7. Formation of coalition structures as a non-cooperative game By Dmitry Levando
  8. The Inner Working of the Board : Evidence from the Emerging Markets By de Haas, Ralph; Ferreira, Daniel; Kirchmaier, Tom

  1. By: Thomas Markussen (epartment of Economics, University of Copenhagen); Jean-Robert Tyran (Department of Economics, University of Copenhagen)
    Abstract: In this experiment, voters select a leader who can either act in the public interest, i.e. make efficient and equitable policy choices, or act in a corrupt way, i.e. use public funds for private gain. Voters can observe candidates’ pro-social behavior and their score in a cognitive ability test prior to the election, and this fact is known to candidates. Therefore, self-interested candidates have incentives to act in a pro-social manner, i.e. to pretend to be public-spirited leaders. We find that both truly pro-social and egoistic leaders co-exist, but that political selection is ineffective in choosing public-spirited leaders. The main reason is that egoistic candidates strategically pretend to be pro-social to increase their chances of winning the election.
    Keywords: political selection, pro-social behavior, social dilemma, corruption, voting
    JEL: C92 C91 D03 D72 H41
    Date: 2017–03–24
  2. By: Plehwe, Dieter; Krämer, Werner; Neujeffski, Moritz; Meland, Alexander; Guérot, Ulrike
    Abstract: The European financial and economic crisis has shaken traditional beliefs and confidence in a one-directional move towards an ever closer union. Discussions regarding "Grexit" and the public vote in favor of "Brexit" have signaled strong anti-EU sentiment far beyond previous instances of dissatisfaction expressed by popular votes in France and the Netherlands opposing the European constitution, for example. Mainstream European integration scholars have started to seriously address disintegration theory; once a preserve of Marxist critiques of mainstream integration scholarship. European right-wing parties, foundations and think tanks openly advocate (partial) disintegration and, in particular, aim to interrupt centrist Social Democratic, Green, Liberal and Conservative cooperation in the European Parliament. What has been the response to these conceptual and political challenges from the pro-European political forces in European politics? In the shadow of Syriza's anti-austerity campaign from Greece and Podemos' grassroots mobilization in Spain, a range of new pro-European think tanks of different political-philosophical leanings have been founded after the crisis, or developed new activities in response to the crisis. The paper will examine the publications of organizations like European Alternatives, Project for a Democratic Europe and EuropaNova in order to observe if and how a new cross-cutting network of pro-European intellectuals, think tanks and ideas address the present crisis, and if and in which ways we can speak of new conceptual and political approaches to European integration that promise innovation and progressive (in the sense of pro-European integration) learning. Do they look beyond neoliberal restrictions to Europe's "sui generis" Union (Hayek's version of interstate federalism), something closer to real (fiscal) federalism - or something different? We will also examine if and how they differ from more centrist institutional efforts to envision the future, such as those uttered by Commission officials, MEPs of the Spinelli-Group, or experts like those assembled in the Glienicker Group. Last, but not least, we will try to establish if and to what extent new conceptual efforts reverberate in pro-European integration debating platforms like Publixphere, OneEurope or Krytyka Polityczna (Political Critique), which are considered more likely echo chambers for pro-European integration think tanks than mainstream media.
    Date: 2016
  3. By: Lechler, Marie; McNamee, Lachlan
    Abstract: This paper identifies indirect and direct colonial rule as causal factors in shaping support for democracy by exploiting a within-country natural experiment in Namibia. Throughout the colonial era, northern Namibia was indirectly ruled through a system of appointed indigenous traditional elites whereas colonial authorities directly ruled southern Namibia. This variation originally stems from where the progressive extension of direct German control was stopped after a rinderpest epidemic in the 1890s, and thus constitutes plausibly exogenous within-country variation in the form of colonial rule. Using this spatial discontinuity, we find that individuals in indirectly ruled areas are less likely to support democracy and turnout at elections. We explore potential mechanisms and find suggestive evidence that the greater influence of traditional leaders in indirectly ruled areas has socialized individuals to accept non-electoral bases of political authority.
    Keywords: Indirect Colonial Rule; Decentralized Despotism; Political Attitudes; Namibia; Democratic Institutions; Spatial RDD
    JEL: F54 N27 N47 P16
    Date: 2017–03–08
  4. By: Adedokun, Ayokunu (UNU-MERIT, and Maastricht University)
    Abstract: With the heavy involvement of the United Nations (UN) and the international community, the Rome General Peace Agreement (GPA) of 1992 ended more than 16 years of civil war in Mozambique. The peace agreement and post-conflict initiatives by the international community was successful in transforming the Mozambique National Resistance?(Renamo) from a rebel group into a viable political party. Key components of Mozambique's success in negotiating peace and creating conditions for political stability and democracy were the provision of demobilisation before democratisation, decentralisation of humanitarian and relief efforts to provincial and district levels, financial support directly for the development of political parties and budget support to sectors relevant to peacebuilding. Though imperfect, Mozambique remains an important case study in how the UN and international community can help in post-conflict environments. Thus, the paper argues (both theoretically and empirically) that success in peacebuilding operations depends on credible and impartial international support through the UN, as opposed to 'unilateral' peacebuilding operation through a 'powerful state'.
    Keywords: Civil war, Peacebuilding, United Nations, Mozambique
    JEL: D74 F53 F54 N47 O55
    Date: 2017–03–10
  5. By: Toke R. Fosgaard (Department of Food and Resource Economics, University of Copenhagen); Lars G. Hansen (Department of Food and Resource Economics, University of Copenhagen); Erik Wengström (Department of Economics, Lund University; Department of Economics, University of Copenhagen)
    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: H41 C90 D03
    Date: 2017–03
  6. By: Antonio Cabrales (Department of Economics, University College London); Antonio M. Espín (Department of Economics, Middlesex University Business School); Praveen Kujal (Department of Economics, Middlesex University and Economic Science Institute, Chapman University); Stephen Rassenti (Economic Science Institute, Chapman University)
    Abstract: Recent experiments suggest that social behavior may be shaped by the time available for decision making. It is known that fast decision making relies more on intuition whereas slow decision making is affected by reflective processes. Little is known, however, about whether people correctly anticipate the effect of intuition vs. reflection on others’ decision making. This is important in everyday situations where anticipating others’ behavior is often essential. A good example of this is the extensively studied Trust Game where the trustor, by sending an amount of money to the trustee, runs the risk of being exploited by the trustee’s subsequent action. We use this game to study how trustors’ choices are affected by whether trustees are externally forced to respond quickly or slowly. We also examine whether trustors’ own tendency to stop and reflect on their intuitions (as measured by the Cognitive Reflection Test) moderates how they anticipate the effect of reflection on the behavior of trustees. We find that the least reflective trustors send less money when trustees are forced to respond “reflectively” rather than “intuitively”, but we also argue that this is a wrong choice. In general, no group, including the ones with the largest number of reflective individuals, is good at anticipating the (positive) effect of forced delay on others’ trustworthiness
    Keywords: trust, trustworthiness, beliefs, reflection, dual-process, intuition
    Date: 2017
  7. By: Dmitry Levando (National Research University Higher School of Economics [Moscow], CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    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: Noncooperative games
    Date: 2017–02
  8. By: de Haas, Ralph (Tilburg University, Center For Economic Research); Ferreira, Daniel; Kirchmaier, Tom
    Abstract: We survey non-executive directors in emerging markets to obtain detailed information about the inner workings of corporate boards across a variety of institutional settings. We document substantial variation in the structure and conduct of boards as well as in directors’ perceptions about the local legal environment. Further analysis indicates that directors who feel adequately empowered by local legislation are less likely to actively vote against board proposals. They also form boards that play a stronger role in the company’s strategic decision-making. This suggests that a supportive legal environment allows directors to focus more on their advisory, as opposed to their monitoring, role.
    Keywords: boards of directors; corporate governance; emerging markets
    JEL: G30 G38 K22
    Date: 2017

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