nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2017‒06‒04
ten papers chosen by
Stan C. Weeber, McNeese State University

  1. Do some electoral systems select better politicians than others? Single- vs dual-ballot elections By Menezes, Aline
  2. “Negative Political Advertising: It’s All in the Timing” By Davis, Brent
  3. Homophily in Entrepreneurial Team Formation By Paul A. Gompers; Kevin Huang; Sophie Q. Wang
  4. Disentangling the effect of private and public cash flows on firm value By Scherrer, Cristina Mabel; Fernandes, Marcelo
  5. How Bureaucratic Capacity Shapes Policy Outcomes: Partisan Politics and Affluent Citizens' Incomes in the American States By Daniel Berkowitz
  6. Integration and Segregation By Goyal, S.; Hernández, P.; Martínez-Cánovasz, G.; Moisan, F.; Muñoz-Herrera, M.; Sánchez, A.
  7. Investments, positive externalities and majority bargaining By Daniel Cardona; Antoni Rubí-Barceló
  8. Cooperative games and network structures By Musegaas, Marieke
  9. Effective anti-corruption policy-making: What can we learn from experimental economics? By Boly, Amadou; Gillanders, Robert
  10. Open source projects as incubators of innovation: From niche phenomenon to integral part of the software industry By Schrape, Jan-Felix

  1. By: Menezes, Aline
    Abstract: I use the discontinuous allocation of single and dual-ballot rules across mayoral elections in Brazil to compare politicians fielded and elected in these systems. Dual-ballot candidates in general are not statistically different from their single-ballot counterparts in terms of age, education and occupational skill. Parties field female candidates at the same rate in both systems, but dual-ballot elections have less women in the top two and three positions, on average. These candidates raise and spend, on average, the same amount of resources in the electoral campaign and the rate at which they win and/or run for reelection is also similar. Interestingly, the only difference in performance found between the two types of mayors is in the attraction of discretionary transfers, which is larger in dual-ballot municipalities, but only in election years when mayors are eligible for reelection. Taken together, these results indicate that the experience demanded from candidates in major parties entering dual-ballot elections may translate into unobserved political skills that are required to deal with the electoral process in dual-ballot. That, by itself, punishes female candidates to the extent to which women's participation in politics has been historically low.
    Keywords: electoral rules, candidacy, regression discontinuity design
    JEL: D72 P16
    Date: 2017
  2. By: Davis, Brent
    Abstract: Negative political advertising is a common feature of election campaigns in liberal democracies, whether in the milder form of ‘contrast ads’ or the more aggressive form of ‘attack ads’. Despite a substantial volume of scholarship, whether such advertisements generate persuasion effects (persuading voters of the deficiencies in the subject of the ads) or backlash effects (diminishing the standing of the candidate/party promulgating the ads) remains a still-unresolved question. This ‘persuasion or backlash’ question may well reflect the implicit assumption in many of the research designs, and their associated (and consequently mis-specified) models: that causality runs from negative political advertising to vote intention. This article tests that assumption, and finds it wanting. Testing for endogeneity indicates a bi-directional causality between negative political advertising and vote intention; each causes the other, but with differential temporal profiles. For electoral scholars (and campaign strategists) this means the decision(s) to engage in negative political advertising is not just if, by whom or how, but also when.
    Keywords: election campaigns; political advertising; voter behavior; politico-econometric modelling; endogeneity; election forecasting
    JEL: C53 C54 D72
    Date: 2017–05–30
  3. By: Paul A. Gompers; Kevin Huang; Sophie Q. Wang
    Abstract: We study the role of homophily in group formation. Using a unique dataset of MBA students, we observe homophily in ethnicity and gender increases the probability of forming teams by 25%. Homophily in education and past working experience increases the probability of forming teams by 17% and 11 % respectively. Homophily in education and working experience is stronger among males than females. Further, we examine the causal impact of homophily on team performance. Homophily in ethnicity increases team performance by lifting teams in bottom quantiles to median performance quantiles, but it does not increase the chance of being top performers. Our findings have implications for understanding the lack of diversity in entrepreneurship and venture capital industry.
    JEL: J15 J16
    Date: 2017–05
  4. By: Scherrer, Cristina Mabel; Fernandes, Marcelo
    Abstract: This paper presents a simple model for dual-class stock shares, in which common shareholders receive both public and private cash flows (i.e. dividends and any private benefit of holding voting rights) and preferred shareholders only receive public cash flows (i.e. dividends). The dual-class premium is driven not only by the firm's ability to generate cash flows, but also by voting rights. We isolate these two effects in order to identify the role of voting rights on equity-holders' wealth. In particular, we employ a cointegrated VAR model to retrieve the impact of the voting rights value on cash flow rights. We finnd a negative relation between the value of the voting right and the preferred shareholders' wealth for Brazilian cross- listed firms. In addition, we examine the connection between the voting right value and market and firm specific risks.
    Date: 2017–03–07
  5. By: Daniel Berkowitz
    Abstract: We contend that political institutions require a high level of bureaucratic capacity, as measured by the caliber of agency heads, if they are to have their preferred policy outcomes attained. Moreover, their policy objectives can only be realized when unified partisan majorities both delegate authority and constrain its exercise by administrative institutions. Panel evidence from the American states reveals that during times of unified Republican partisan control of state executive and legislative institutions are associated with higher income gains for affluent citizens, but only when bureaucratic capacity is sufficiently high. However, rising bureaucratic capacity at its lower levels only notably reduces incomes for affluent citizens when unified Democratic party governments hold power in the American states. These findings both highlight the critical role that agency leadership exerts for attaining policy outcomes consistent with democratic preferences, and underscore the limits of electoral institutions to shape policy outcomes of their own accord.
    Date: 2017–01
  6. By: Goyal, S.; Hernández, P.; Martínez-Cánovasz, G.; Moisan, F.; Muñoz-Herrera, M.; Sánchez, A.
    Abstract: Individuals prefer to coordinate with others, but they differ on the preferred action. In theory, this can give rise to an integrated society with everyone conforming to the same action or a segregated society with members of different groups choosing diverse actions. Social welfare is maximum when society is integrated and everyone conforms on the majority's action. In laboratory experiments, subjects with different preferences segregate into distinct groups and choose diverse actions. To understand the role of partner choice, we then consider an exogenous network of partners. Subjects in the experiment now choose to conform on the action preferred by the majority. Thus, there exists a tension between two deeply held values: social cohesion and freedom of association.
    Date: 2017–05–29
  7. By: Daniel Cardona (Universitat de les Illes Balears); Antoni Rubí-Barceló (Universitat de les Illes Balears)
    Abstract: This paper analyzes the welfare implications of requiring either unanimity or simple majority in negotiations to distribute a budget among agents who previously can invest to generate positive consumption externalities to others. The present paper studies this setting with simple-majority bargaining, complementing Cardona and Rubí-Barceló (2014), that consider the unanimity case. It is shown that reducing the majority requirement reduces the profitability of investments and, as a consequence, alleviates over-investment, which is predominant under unanimous bargaining. Nevertheless, simple majority reduces the aggregate surplus attained at the bargaining stage. Therefore, the relative performance of the bargaining rules is uncertain. We show how it evolves with respect to the size of consumption externalities.
    Keywords: Investments, multilateral bargaining, efficiency, externalities
    JEL: C78 D72 D62
    Date: 2017
  8. By: Musegaas, Marieke (Tilburg University, School of Economics and Management)
    Abstract: This thesis covers various research topics involving cooperative game theory, a mathematical tool to analyze the cooperative behavior within a group of players. The focus is mainly on interrelations between operations research and cooperative game theory by analyzing specific types of cooperative joint optimization problems induced by network structures. In particular, this thesis considers minimum coloring problems and one-machine sequencing situations together with its related games. Further, it studies the problem of computing the influence of a neuronal structure in a brain network.
    Date: 2017
  9. By: Boly, Amadou; Gillanders, Robert
    Abstract: Experimental studies have shown that deterrence (monitoring and punishment) can be an effective anti-corruption policy. Even when they themselves stand to lose, policymakers may enact deterrence policies with real teeth ... However, policymakers' legitimacy is crucial: a given deterrence policy is more effective when chosen by an honest policymaker as opposed to a corrupt one.
    Date: 2017
  10. By: Schrape, Jan-Felix
    Abstract: Over the last 20 years, open source development has become an integral part of the software industry and a key component of the innovation strategies of all major IT providers. Against this backdrop, this paper seeks to develop a systematic overview of open source communities and their socio-economic contexts. I begin with a reconstruction of the genesis of open source software projects and their changing relationships to established IT companies. This is followed by the identification of four ideal- typical variants of current open source projects that differ significantly in their modes of coordination and the degree of corporate involvement. Further, I examine why open source projects have mainly lost their subversive potential while, in contrast to former cases of collective invention, remaining viable beyond the emergence of predominant solutions and their commercial exploitation: In an industry that is characterized by very short innovation cycles, open source projects have proven to be important incubators for new product lines and branch-defining infrastructures. They do not compete against classical forms of production but instead complement and expand these.
    Date: 2017

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