nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2017‒06‒11
eight papers chosen by
Stan C. Weeber, McNeese State University

  1. Spillover Effects of Institutions on Cooperative Behavior, Preferences and Beliefs By Engl, Florian; Riedl, Arno; Weber, Roberto A.
  2. The utopia of cooperation: does intra-group competition drive out free riding? By Annarita Colasante; Aurora García-Gallego; Andrea Morone; Tiziana Temerario
  3. Collective action when public good returns are heterogeneous By Abigail Barr; Trudy Owens; Ashira Perera
  4. Activism, Costly Participation, and Polarization By Venkatesh, Raghul S
  5. The Reach of Radio: Defection Messaging and Armed Group Behavior By Alex Armand; Paul Atwell; Joseph Gomes
  6. Risk taking and sharing when risk exposure is interdependent By Abigail Barr; Trudy Owens; Ashira Perera
  7. #GE2017Economists: The Research Evidence on Key Issues for Voters in the 2017 UK General Election By Stephen Machin; Romesh Vaitilingam
  8. A Notion of Prominence for Strategic Games By Alessandro Sontuoso; Sudeep Bhatia

  1. By: Engl, Florian (University of Cologne); Riedl, Arno (Maastricht University); Weber, Roberto A. (University of Zurich)
    Abstract: Institutions are an important means for fostering prosocial behaviors, but in many contexts their scope is limited and they govern only a subset of all socially desirable acts. We use a laboratory experiment to study how the presence and nature of an institution that enforces prosocial behavior in one domain affects behavior in another domain and whether it also alters prosocial preferences and beliefs about others' behavior. Groups play two identical public good games. We vary whether, for only one game, there is an institution enforcing cooperation and vary also whether the institution is imposed exogenously or arises endogenously through voting. Our results show that the presence of an institution in one game generally enhances cooperation in the other game thus documenting a positive spillover effect. These spillover effects are economically substantial amounting up to 30 to 40 percent of the direct effect of institutions. When the institution is determined endogenously spillover effects get stronger over time, whereas they do not show a trend when it is imposed exogenously. Additional treatments indicate that the main driver of this result is not the endogeneity but the temporal trend of the implemented institution. We also find that institutions of either type enhance prosocial preferences and beliefs about others' prosocial behavior, even toward strangers, suggesting that both factors are drivers of the observed spillover effects.
    Keywords: public goods, institutions, spillover effect, social preferences, beliefs
    JEL: C92 D02 D72 H41
    Date: 2017–05
  2. By: Annarita Colasante (LEE and Department of Economics, Universitat Jaume I, Castellón, Spain); Aurora García-Gallego (LEE and Department of Economics, Universitat Jaume I, Castellón, Spain); Andrea Morone (LEE and Department of Economics, Universitat Jaume I, Castellón, Spain); Tiziana Temerario (IVIE and Department of Economics, Universitat Jaume I, Castellón, Spain)
    Abstract: We study whether intra-group competition fosters cooperation even when cooperate is not a dominant strategy. We arranged an experimental Public Good Game comparing contributions in a risky treatment with contributions in a baseline standard treatment. The intra-group competition was induced by assigning different marginal per capita return (MPCR) in accordance to the size of the contribution itself. Results show that risky MPCR are detrimental for cooperation, while intra-group competition significantly reduces free riding.
    Keywords: cooperation; public good; intra-group competition; uncertainty
    JEL: C72 C92 D80 H41
    Date: 2017
  3. By: Abigail Barr; Trudy Owens; Ashira Perera
    Abstract: We adopt a mixed methods approach to investigate whether and how heterogeneity in individual returns to a public good affects contributions. We engage smallholder farmers in Sri Lanka in: a one-shot, framed, lab-in-the-field experiment, within which the farmers’ rates of return to the public good are exogenously varied; and a survey including a question about their willingness to contribute time to the construction of a specific, relevant to them public good. In the former, we find weak evidence that heterogeneity in individual returns increases contributions. In the latter we find that those facing higher returns contribute more. We conclude that heterogeneity in returns does not explain why collective action remains a challenge in farming communities in developing countries.
    Keywords: lab-type behavioural experiment, collective action, heterogeneity, public goods JEL Classification: C93, D81, O12
    Date: 2017
  4. By: Venkatesh, Raghul S (Department of Economics, University of Warwick)
    Abstract: I develop a model of activism and polarization in the context of electoral competition. Two candidates simultaneously announce policy platforms and seek the support of ideologically inclined activists. Activists compete to influence electoral outcomes by expending costly support for their respective candidates. The presence of activists always moderates the platform choice of candidates, compared to the case of no activism. The main finding is to provide conditions under which as activists’ ideological partisanship increases (decreases), polarization of candidate platforms reduces (widens) - meaning candidates may compromise even though their supporters become more extreme. I precisely characterize the conditions under which the presence of activism and increasing partisanship among activists are both welfare-improving for voters. Finally, I identify a novel crowding out effect of big money on the demand for activism. My analysis suggests public funding of elections as an important institutional reform that could mitigate the pernicious effects of high polarization.
    Keywords: activism ; electoral participation ; downsian competition ; influence seeking ; public funding
    Date: 2017
  5. By: Alex Armand; Paul Atwell; Joseph Gomes
    Abstract: We study the role of FM radio messaging in discouraging violent conflict by armed groups. Focusing on the Lord’s Resistance Army (LRA), we collected unique information about defection messaging by radio stations in the four countries (DR Congo, Central African Republic, South Sudan and Uganda) where the LRA has operated. We exploit time and geographical variation, along with the randomness of topography that influences radio coverage, to capture the causal effect of the intensity of messaging on violence, and on the LRA’s strategic behavior. Higher intensity of defection messages leads to a decrease in violence, measured in both number of events and fatalities. We show that this outcome is mainly explained by an increase in defections among LRA members. In areas with higher intensity of messaging, we observe a strategic shift as the LRA tries to compensate these membership losses with increased abductions to recruit new members, and increased looting to reward members.
    Keywords: Conflict; LRA; Radio; Defection; Mass Media
    JEL: D74 N47 D89
    Date: 2017–05
  6. By: Abigail Barr (School of Economics, University of Nottingham); Trudy Owens (School of Economics, University of Nottingham); Ashira Perera (School of Economics, University of Nottingham)
    Abstract: Using a specially designed experiment, we investigate whether and how interdependence in risk exposure i.e., risk taking by some members of a potential risk sharing group affecting not only their own but also their co-members risk exposure, affects both risk taking and ex post sharing. The experimental subjects were Sri Lankan small-holders who face interdependent risk and share when neighbors fall on hard times in everyday life. We find that the Sri Lankan farmers reward socially responsible risk taking and, under some circumstances, punish socially irresponsible risk taking. Their behaviour is consistent with socially responsible risk taking being cost dependent, although, here, the statistical evidence is inconclusive. Finally, social responsibility in risk taking and ex post sharing do not appear to be substitutes, rather, they appear to be co-determined.
    Keywords: behavioural experiment; risk-sharing; solidarity
    Date: 2017–08
  7. By: Stephen Machin; Romesh Vaitilingam
    Abstract: The unexpected UK general election of 2017 was intended to be all about Brexit, one that will give the incoming government a mandate to negotiate the terms of the UK's exit from the European Union (EU). But many other public policy issues have been at the forefront of political and public debate during the campaign. The Centre for Economic Performance (CEP) at the London School of Economics has focused on eight key areas, producing a series of briefings summarising the research evidence and evaluating relevant policy proposals in the party manifestos. This report brings together those briefings - which draw on the work of many CEP researchers and other economists - into one single Election Analysis.
    Keywords: UK 2017 General Election, Brexit, NHS, education, immigration, climate change, industrial strategy, regional development, real wages, living standards
    Date: 2017–06
  8. By: Alessandro Sontuoso (Philosophy, Politics and Economics, University of Pennsylvania); Sudeep Bhatia
    Abstract: Identifying the best course of action in games with multiple equilibria is a long-standing unresolved issue in strategic interaction. The concept of prominence as a criterion for equilibrium selection has been suggested, but has remained for the most part an informal notion, without a psychologically grounded characterization. In this paper we propose one such characterization: by drawing on existing theories of human memory, language, and decision making we define prominence in terms of frequency of exposure. In particular, we consider games where strategies are denoted by natural language labels, and we measure the prominence of each strategy by how often its label occurs in natural language corpora. Our specification of prominence yields sharp quantitative predictions about behavior in coordination and discoordination problems. Here we present three studies designed to test such predictions, and show that individuals do select strategies that fulfil our definition of prominence and they furthermore do so in a (boundedly) rational manner.
    Keywords: focal points, salience, accessibility, coordination, hide-and-seek, level-k
    JEL: C72 C91
    Date: 2017–05

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