nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2017‒07‒16
eight papers chosen by
Stan C. Weeber, McNeese State University

  1. The Political Cost of Being Soft on Crime: Evidence from a Natural Experiment By Drago, Francesco; Galbiati, Roberto; Sobbrio, Francesco
  2. Targeted campaign competition, loyal voters, and supermajorities By Pierre C. Boyer; Kai A. Konrad; Brian Roberson
  3. Votes at Work in Britain: Shareholder Monopolisation and the 'Single Channel' By Ewan McGaughey
  4. Do Refugees Impact Voting Behavior in the Host Country? Evidence from Syrian Refugee Inflows in Turkey By Altindag, Onur; Kaushal, Neeraj
  5. Cash for Votes: Evidence from India By Anirban Mitra; Shabana Mitra; Arnab Mukherji
  6. Warm-Glow Giving in Networks with Multiple Public Goods By Lionel Richefort
  7. Volunteering under Population Uncertainty By Adrian Hillenbrand; Fabian Winter
  8. Making exit costly but efficient: the political economy of exit clauses and secession By Martijn Huysmans; Christophe Crombez

  1. By: Drago, Francesco (University of Naples Federico II); Galbiati, Roberto (CNRS); Sobbrio, Francesco (European University Institute)
    Abstract: We provide evidence about voters' response to crime control policies. We exploit a natural experiment arising from the Italian 2006 collective pardon releasing about one third of the prison population. The pardon created idiosyncratic incentives to recidivate across released individuals and municipalities. We show that municipalities where resident pardoned individuals have a higher incentive to recidivate experienced higher recidivism. Moreover, in these municipalities: i) newspapers were more likely to report crime news involving pardoned individuals; ii) voters held worse beliefs on the incumbent governments ability to control crime and iii) with respect to the previous elections, the incumbent national government experienced a worse electoral performance in the April 2008 national elections relative to the opposition coalition. Overall, our findings indicate that voters keep incumbent politicians accountable by conditioning their vote on the observed effects of their policies.
    Keywords: accountability, voting, natural experiment, crime, recidivism
    JEL: D72 K42
    Date: 2017–06
  2. By: Pierre C. Boyer; Kai A. Konrad; Brian Roberson
    Abstract: We consider campaign competition in which candidates compete for votes among a continuum of voters by engaging in persuasive e orts that are targetable. Each individual voter is persuaded by campaign e ort and votes for the candidate who targets more persuasive e ort to this voter. Each candidate chooses a level of total campaign e ort and allocates their e ort 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 oce in expectation. However, the equilibria arising under the two electoral objectives qualitatively di er. In majoritarian elections, candidates randomize over their level of total campaign e ort, 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 fty- fty split of vote shares. We also study how asymmetry between the candidates a ects the equilibrium. If some share of the voters is loyal to one of the candidates, then both candidates expend the same expected e orts 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; exible budgets; supermajorities, loyal voters
    JEL: D72 D78 D82
    Date: 2017–03
  3. By: Ewan McGaughey
    Abstract: Why do shareholders monopolise voting rights in UK companies, and are trade unions the only way to get meaningful workplace representation? In 1967 a Labour Party policy document first coined the phrase that collective bargaining was – and should be – the 'single channel' of representation. Since then, it has been said the labour movement embraced an 'adversarial' rather than a 'constitutional' conception of corporations, neglecting legal rights to worker voice in enterprise governance. This article shows that matters were not so simple. It explains the substantial history of legal rights to vote in British workplaces, and the competition from the rival constitutional conception: employee share schemes. The UK has the oldest corporations – namely universities – which have consistently embedded worker participation rights in law. Britain has among the world's most sophisticated 'second channel' participation rights in pension board governance. Developing with collective bargaining, it had the world's first private corporations with legal participation rights. Although major plans in the 1920s for codetermination in rail and coal fell through, it maintained a 'third channel' of worker representatives on boards during the 20th century in numerous sectors, including ports, gas, post, steel, and buses. At different points every major political party had general proposals for votes at work. The narrative of the 'single channel' of workplace representation, and an 'adversarial' conception of the company contains some truth, but there has never been one size of regulation for all forms of enterprise.
    Keywords: Participation, labour law, corporate governance, codetermination, collective bargaining, labour law
    JEL: B15 J50 J58 K22 K31
    Date: 2017–03
  4. By: Altindag, Onur (National Bureau of Economic Research); Kaushal, Neeraj (Columbia University)
    Abstract: We study the effect of an influx of approximately three million Syrian refugees on voting behavior in Turkey. The analysis is based on data from three recent general elections, 54 waves of a monthly survey on voter preferences as well as a unique field survey that directly measures voter attitude towards refugees. We exploit the substantial variation in the inflow of refugees, both over time and across provinces, and use a difference-in-differences approach, comparing the political outcomes in geographic areas with high and low intensity of refugee presence before and after the beginning of Syrian civil war. To address the endogeneity in refugees' location choices, we adopt an instrumental variables approach that relies on the historic dispersion of Arabic speakers across Turkish provinces, taking advantage of the fact that Syrians are more likely to settle in locations where the host population speaks Arabic. Empirical analyses of survey data documents strong polarization in attitudes towards refugees between the supporters and opponents of the ruling Justice and Development party (AKP). Regression analyses of political preferences, however, suggest that the massive inflow of refugees induced a modest and statistically significant drop in support for the ruling AKP. Leavers did not swing to the other major political parties but were more likely to become indecisive or absentee. We show similarly small, but statistically insignificant impact on actual election outcomes during the study period. Based on other questions in the survey data, we interpret our findings as suggestive that while partisanship is highly correlated with public opinion towards refugees, exposure to refugee has little impact on electoral outcomes.
    Keywords: Syrian refugees, voting behavior in Turkey, attitudes towards refugees
    JEL: F22
    Date: 2017–06
  5. By: Anirban Mitra; Shabana Mitra; Arnab Mukherji
    Abstract: This paper investigates the prevalence of vote-buying in democratic elections where stringent restrictions on corporate donations to political parties exist. We combine data from state assembly elections in India with household-level consumer expenditure surveys (conducted by NSSO) over the period 2004-11. Exploiting a difference-in-differences methodology, we estimate the effects elections have on the consumption of various household items: food, clothes, education-related, etc. Moreover, there is heterogeneity in such consumption adjustments across households. Our estimates suggest that legal sources of funds are not sufficient for generating such "spikes" in consumption and indicate the role of the hidden economy in politics.
    Keywords: Political economy; election finance; black economy
    JEL: D12 D72 H40
    Date: 2017–06
  6. By: Lionel Richefort (Université de Nantes, LEMNA)
    Abstract: This paper explores a voluntary contribution game in the presence of warm-glow effects. There are many public goods and each public good benefits a different group of players. The structure of the game induces a bipartite network structure, where players are listed on one side and the public good groups they form are listed on the other side. The main result of the paper shows the existence and uniqueness of a Nash equilibrium. The unique Nash equilibrium is also shown to be locally asymptotically stable. Then the paper provides some comparative statics analysis regarding pure redistribution, taxation and subsidies. It appears that small redistributions of wealth may sometimes be neutral, but generally, the effects of redistributive policies depend on how public good groups are related in the contribution network structure.
    Keywords: Multiple Public Goods, Warm-glow Effects, Bipartite Contribution Structure, Nash Equilibrium, Comparative Statics
    JEL: C72 D64 H40
    Date: 2017–07
  7. By: Adrian Hillenbrand (Max Planck Institute for Research on Collective Goods); Fabian Winter (Max Planck Institute for Research on Collective Goods)
    Abstract: There is ample evidence that the number of players can have an important impact on the cooperation and coordination behavior of people facing social dilemmas. With extremely few exceptions, the literature on cooperation assumes common knowledge about who is a player and how many players are involved in a certain situation. In this paper, we argue that this assumption is overly restrictive, and not even very common in real-world cooperation problems. We show theoretically and experimentally that uncertainty about the number of players in a Volunteer's Dilemma increases cooperation compared to a situation with a certain number of players. We identify additional behavioral mechanisms amplifying and impairing the effect.
    Date: 2017–07
  8. By: Martijn Huysmans; Christophe Crombez
    Abstract: This article presents a political economic analysis of exit from federations. Over time, members’ benefits from being in a federation can fluctuate because of changes in the state of the world. If a member stops benefitting, it may wish to secede i.e. exit the federation. Based on a real options model, we show that state-contingent exit penalties can induce socially efficient exit decisions. In addition to the substantive implications, this represents a methodological contribution to real options theory. Even if ex-ante specified exit penalties cannot be made state-contingent, they may still enhance social welfare by preventing secession wars. This finding runs counter to the dominant view in the literature that exit clauses should be avoided in federations. As a first test of the model, we derive five hypotheses and show that they hold for the breakup of Yugoslavia and all cases known to us of federations with an exit clause.
    Keywords: Exit clauses, Secession, Federalism, Real options
    Date: 2017–06

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