nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2017‒08‒20
nine papers chosen by
Stan C. Weeber, McNeese State University

  1. A rationale for unanimity in committees By Breitmoser, Yves; Valasek, Justin
  2. Facts, Alternative Facts, and Fact Checking in Times of Post-Truth Politics By Barrera, Oscar; Guriev, Sergei; Henry, Emeric; Zhuravskaya, Ekaterina
  3. Evolution of Trust and Trustworthiness between Cooperators and Non-Cooperators in Public Goods : Evidence from Field Experiment: Ethiopia By Kitessa, Rahel Jigi
  4. Can Television Bring Down a Dictator? Evidence from Chile’s “No” Campaign By González, Felipe; Prem, Mounu
  5. Fundamental Errors in the Voting Booth By Glaeser, Edward L; Ponzetto, Giacomo AM
  6. Statistical Estimation of the Casual Effect of Scoial Economy on Subjective Well-Being By TAE-HWAN KIM; HOON HONG; JONGHYUN PARK; CHUNG SIK YOO; JONGICK JANG
  7. "Governing Collective Action in the Face of Observational Error" By Thomas Markussen; Louis Putterman; Liangjun Wang
  8. Surging Populism around the Globe: Do we see a reversal? By K M, SIBY
  9. The effects of punishment in dynamic public-good games By Bettina Rockenbach; Irenaeus Wolff

  1. By: Breitmoser, Yves; Valasek, Justin
    Abstract: Existing theoretical and experimental studies have established that unanimity is a poor decision rule for promoting information aggregation. Despite this, unanimity is frequently used in committees making decisions on behalf of society. This paper shows that when committee members are exposed to "idiosyncratic" payoffs that condition on their individual vote, unanimity can facilitate truthful communication and optimal information aggregation. Theoretically, we show that since agents" votes are not always pivotal, majority rule suffers from a free-rider problem. Unanimity mitigates free-riding since responsibility for the committee's decision is equally distributed across all agents. We test our predictions in a controlled laboratory experiment. As predicted, if unanimity is required, subjects are more truthful, respond more to others' messages, and are ultimately more likely to make the optimal decision. Idiosyncratic payoffs such as a moral bias thus present a rationale for the widespread use of unanimous voting.
    Keywords: committees,incomplete information,decision rules,cheap talk,information aggregation,laboratory experiment
    JEL: D71 D72 C90
    Date: 2017
  2. By: Barrera, Oscar; Guriev, Sergei; Henry, Emeric; Zhuravskaya, Ekaterina
    Abstract: How persuasive are "alternative facts" i.e., false statements by populist politicians, in convincing voters? How effective is fact checking in countervailing alternative facts? We conduct a randomized online experiment to evaluate the impact of alternative facts and fact checking on knowledge, beliefs, and political preferences of voters in the context of the 2017 French presidential election campaign. Marine Le Pen (MLP), the extreme-right candidate who reached the runoff, regularly used alternative facts in support of her policy proposals, to which mainstream media responded with systematic fact checking. We expose randomly selected subgroups of a sample of 2480 voting-age French to quotes from MLP and/or real facts. The results are as follows. First, alternative facts are highly persuasive. Second, fact checking improves factual knowledge of voters, but does not have an impact on voters' policy conclusions or support for MLP. Third, providing only the true facts backfires by increasing political support for MLP compared to a control group, although to a smaller extent than alternative facts. Finally, heterogeneity of voters with respect to prior voting choices and prior knowledge is important for the effect of treatments on political preferences.
    Keywords: alternative facts; elections; fact checking; fake news; voting
    Date: 2017–08
  3. By: Kitessa, Rahel Jigi (Tilburg University, Center For Economic Research)
    Abstract: The standard economic theory predicts that collective action problem arise because the selfish agents have no incentive to contribute to public goods. However, considerable shares of mankind, conditional cooperators, contribute to public goods as revealed by numerous empirical and experimental findings. Ostrom (2000) revised collective action problems predicts that as time passes with proper social norm institution in place, and information about the types of agent is known, the share of such cooperators will grow in population and the cooperative behavior will be a dominant economic decision. This is because, the conditional cooperators are in general more trusted, whereas, selfish agents are less trusted which enables the cooperators to drive higher payoff. I tested this hypothesis in a setting that let participants who are members of collaborative forest management group (CFM), and non- members (non-CFM) to play a trust game. Using this experiment, the finding in this study support the hypothesis that high trust is placed on the cooperators than non-cooperators. Therefore, the cooperator type receives more money, but send and return less to non-cooperators which allow them to receive consistently higher pay off.
    Keywords: collective action; trust and trustworthiness; field experiment; forestry; public goods
    JEL: C12 C93 D64 D71 H41 O31
    Date: 2017
  4. By: González, Felipe; Prem, Mounu
    Abstract: Can televised political advertising change voting behavior in elections held in authoritarian regimes? We study the case of Chile, where the opposition used television campaigns weeks before the election that ended the Pinochet regime. We show that after campaigns were launched, firms linked to Pinochet lost stock market value, confirming the contemporaneous importance of television. Using national surveys conducted before the election and administrative electoral data, we provide evidence of a positive effect of television exposure on opposition votes. These results suggest that televised political campaigns can help to defeat dictators at the polls.
    Keywords: Television, dictatorship, elections, transition
    JEL: D72 P26
    Date: 2017–08–08
  5. By: Glaeser, Edward L; Ponzetto, Giacomo AM
    Abstract: Psychologists have long documented that we over-attribute people's actions to innate characteristics, rather than to luck or circumstances. Similarly, economists have found that both politicians and businessmen are rewarded for luck. In this paper, we introduce this "Fundamental Attribution Error" into two benchmark political economy models. In both models, voter irrationality can improve politicians' behavior, because voters attribute good behavior to fixed attributes that merit reelection. This upside of irrationality is countered by suboptimal leader selection, including electing leaders who emphasize objectives that are beyond their control. The error has particularly adverse consequences for institutional choice, where it generates too little demand for a free press, too much demand for dictatorship, and responding to endemic corruption by electing new supposedly honest leaders, instead of investing in institutional reform.
    Keywords: Fundamental attribution error; political economy
    JEL: D72
    Date: 2017–08
  6. By: TAE-HWAN KIM (Yonsei University); HOON HONG (Yonsei University); JONGHYUN PARK (Gyeongnam National University of Science and Technology); CHUNG SIK YOO (Yonsei University); JONGICK JANG (Hanshin University)
    Abstract: It is well known that measuring the non-economic outcomes produced by social economy organizations is fairly difficult and complex. Usually, social economy organizations feature participatory and democratic decision-making processes that help create social capital and relational goods, and they are interested in social integration; accordingly, they tend to create an organizational culture that encourages their workers to contribute to local communities. Therefore, the hypothesis that increased activities of social economy organizations have a causal effect on the subjective well-being of people living near those organizations is highly plausible. In this paper, we estimate the causal effect and attempt to statistically test the hypothesis using a dataset called the ¡°Seoul Survey,¡± which provides observations on the level of subjective well-being of 45,496 citizens living in Seoul and the size of social economy organizations. Controlling for variables in district level and the appropriate socio-economic characteristics of each individual in the dataset, it is found that the size of social organizations is highly significant. This empirical result remains with a causality test using a dummy variable regarding recognition on social economy.
    Keywords: Social economy, Collective externalities effect, Subjective well-being, Happiness
    Date: 2017–07
  7. By: Thomas Markussen; Louis Putterman; Liangjun Wang
    Abstract: We present results from a repeated public goods experiment where subjects choose by vote one of two sanctioning schemes peer-to-peer (informal) or centralized (formal). We introduce, in some treatments, a moderate amount of noise (a 10 percent probability that a contribution is reported incorrectly) affecting either one or both sanctioning environments. We find that the institution with more accurate information is always by far the most popular, but noisy information undermines the popularity of peer-to-peer sanctions more strongly than that of centralized sanctions. This may contribute to explaining the greater reliance on centralized sanctioning institutions in complex environments.
    Date: 2017
  8. By: K M, SIBY
    Abstract: Populism has been a buzzword around the world today. Various recent elections in industrialized parts of the world turned out to be a hot arena of debate on surging populism and demagogues made the best use of their populist agenda to reap rich dividend in electoral mandates. Once they come into power, they retract on their populist rhetoric and act on ways that endanger the underpinnings of the very democracy that begets them. The present article tries to analyse the causes of surging populism around the world and examines a reversal trend in populism in the year 2017.
    Keywords: Populism,neoliberalism,globalisation,absolute and relative inequalities
    Date: 2017–08–07
  9. By: Bettina Rockenbach; Irenaeus Wolff
    Abstract: In the evolution of human cooperation, the enforcement of social norms was of vital importance. The punishment of norm violators has two aspects: to immediately harm the violator and to increase the violator’s future cooperativeness. Abundant experimental evidence has demonstrated the success of peer-to-peer punishment for the establishment of stable cooperation. Yet, these studies largely ignore the dynamic aspect: punishment not only destroys today’s resources or abilities, but also reduces the potential for future cooperativeness. If, for example, a hunter who stayed away from today’s hunt is punished physically, this is harmful not only today, but may also limit the physical strength available for tomorrow’s hunt. Thus, although the hunter may be more willing to cooperate in the future, his future potential for cooperation is reduced through the punishment. Here, we experimentally study the role of punishment for cooperation in dynamic public goods games, where past payoffs determine present contribution capabilities. We show that the beneficial role of punishment possibilities for cooperation success is highly fragile. Successful cooperation seems to hinge on the presence of a common understanding on how punishment should be used. If high-contributors punish too readily, the group likely gets on a wasteful path of punishment and retaliation. On the other hand, if punishment is administered more patiently, even initially uncooperative groups thrive. Hence, in dynamic contexts when today’s punishment also determines tomorrow’s cooperation abilities, it seems of crucial importance that groups agree on the right “dose†of sanctions for punishment to successfully support sustainable cooperation, e.g. by establishing a social norm of when and how to use punishment against free-riders .
    Keywords: Cooperation, Dynamic game, Punishment, Retaliation, Endowment endogeneity, Experiment
    Date: 2017

This nep-cdm issue is ©2017 by Stan C. Weeber. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.