nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2017‒10‒15
thirteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Trade Shocks and Far-Right Voting: Evidence from French Presidential Elections By Clément Malgouyres
  2. Who Runs? Honesty and Self-Selection into Politics By Fehrler, Sebastian; Fischbacher, Urs; Schneider, Maik
  3. Explaining a Paradox of Democracy: The Role of Institutions in Female Enfranchisement By Anna Maria Koukal; Reiner Eichenberger
  4. Power illusion in coalitional bargaining: An experimental analysis By Maaser, Nicola; Traub, Stefan; Paetzel, Fabian
  5. The Swing Voter's Curse in Social Networks By Mechtenberg, Lydia; Büchel, Berno
  6. Endogenously Emerging Gender Diversity in an Experimental Team Work Setting By Gürerk, Özgür; Irlenbusch, Bernd; Rockenbach, Bettina
  7. Taxation, redistribution and observability in social dilemmas By Daniel A. Brent; Lata Gangadharan; Anca Mihut; Marie Claire Villeval
  8. Political fragmentation and fiscal policy: Evidence from German municipalities By Bernard, René
  9. Organizational Refinements of Nash Equilibrium By Takashi Kamihigashi; Kerim Keskin; Cagri Saglam
  10. The patronage effect: a theoretical perspective of patronage and political selection By Federico Quaresima; Fabio Fiorillo
  11. Effect of Welfare and Economic Performance on Good Governance Outcomes in Pakistan By Mamoon, Dawood
  12. Internal conflict, market uniformity, and transparency in price competition between teams By Kurschilgen, Michael; Morell, Alexander; Weisel, Ori
  13. The Incentive Properties of Collective Reputation By Fleckinger, Pierre; Mimra, Wanda; Zago, Angelo

  1. By: Clément Malgouyres
    Abstract: The rise of radical right parties is a Europe-wide phenomenon. While many studies describe the individual or regional characteristics associated with high propensity to vote for the far-right, we know little about the causal impact of economic shocks on electoral support for the far-right. Over the period 1995-2012, we examine the impact of trade-shocks, measured as exposure to low-wage country import competition, on the local vote share of the National Front, the French main far-right party, during presidential elections. We use small communities (cantons) as units of observations and include province (département) fixed effects, so that the identifying variation comes from within-province change in imports exposure over time. We find evidence of a small but significantly positive impact of import competition exposure on votes for the far-right: a one standard-deviation increase in imports-per-worker causes the change in the far-right share to increase by 7 percent of a standard deviation. Further results suggest that this effect has been increasing over the time period considered. We conduct a simple sensitivity test supporting the notion that(i) omitting local share of immigrants is likely to bias our estimate downward, and that(ii) this bias is likely to negligible.
    Keywords: Far-Right, Voting Behavior, Local Labor Markets, Trade, import competition
    Date: 2017–03
  2. By: Fehrler, Sebastian; Fischbacher, Urs; Schneider, Maik
    Abstract: We examine the incentives to self-select into politics. To this end, we set up a two-stage political competition model and test its key mechanisms in the lab. At the entry stage, potential candidates compete in a contest to become their party’s nominee. At the election stage, the nominated candidates campaign by making non-binding promises to voters. Confirming the model’s key predictions, we find that dishonest people over-proportionally self-select into the political race.
    JEL: C92 D71 D83
    Date: 2017
  3. By: Anna Maria Koukal; Reiner Eichenberger
    Abstract: Switzerland is known for its highly developed direct democracy. However, Swiss women were enfranchised at the federal level only in 1971 and in many cantons even later. We analyze the role of direct democracy in the delayed Swiss enfranchising process by investigating a novel dataset covering referenda among males about enfranchising women. Applying a difference-in-differences approach, we shed light on the conditions under which strong local direct democracy becomes a barrier to women’s suffrage. Our results are consistent with direct democracy having two effects: it boosts men’s demand to enfranchise women, but it also increases the price for men to do so. Depending on the specific conditions of the vote, the former or the latter effect dominates.
    Keywords: women’s suffrage; municipal institutions; direct democracy
    JEL: D72 J16 N24 N44 P16
    Date: 2017–10
  4. By: Maaser, Nicola; Traub, Stefan; Paetzel, Fabian
    Abstract: In real world bargaining the distribution of seats or voting weights often does not accurately reflect real power. Game-theory predictions are insensitive to nominal differences. We refer to the converse idea that nominal differences matter as power illusion. We experimentally study the Baron-Ferejohn model with variation in nominal power. We find strong evidence for the existence of power illusion. Thus, attention needs to be paid to nominal power in the design of weighted voting systems.
    JEL: D72 C92 C7
    Date: 2017
  5. By: Mechtenberg, Lydia; Büchel, Berno
    Abstract: We study private communication in social networks prior to a majority vote on two alternative policies. Some (or all) agents receive a private imperfect signal about which policy is correct. They can, but need not, recommend a policy to their neighbors in the social network prior to the vote. We show that communication can undermine effciency of the vote and hence reduce welfare in a common interest setting. We test the model in a lab experiment and find strong support for the predicted effects.
    JEL: D72 D83 D85 C91
    Date: 2017
  6. By: Gürerk, Özgür; Irlenbusch, Bernd; Rockenbach, Bettina
    Abstract: We study gender diversity and performance in endogenously formed teams. Participants choose to either perform a cooperation task with members of the own gender only or in a mixed-gender team. We find that independent of the team choice, initially men cooperate significantly more than women. In subsequent periods, men prefer the successful men-only teams, resulting in significantly higher profits for men compared to women. Only over time, this endogenously emerged “gender profit gap” closes.
    JEL: C92 J71 M54
    Date: 2017
  7. By: Daniel A. Brent (Department of Economics, Louisiana State University, Business Education Complex, Baton Rouge, LA 70803-6306, U.S.A.); Lata Gangadharan (Department of Economics, Monash University, Clayton, Australia); Anca Mihut (Univ Lyon, CNRS, GATE L-SE UMR 5824, F-69130 Ecully, France); Marie Claire Villeval (Univ Lyon, CNRS, GATE L-SE UMR 5824, F-69130 Ecully, France)
    Abstract: In the presence of social dilemmas, cooperation is more difficult to achieve when populations are heterogeneous because of conflicting interests within groups. We examine cooperation in the context of a non-linear common pool resource game, in which individuals have unequal extraction capacities and have to decide on their extraction of resources from the common pool. We introduce monetary and nonmonetary policy instruments in this environment. One instrument is based on two variants of a mechanism that taxes extraction and redistributes the tax revenue. The other instrument varies the observability of individual decisions. We find that the two tax and redistribution mechanisms reduce extraction, increase efficiency and decrease inequality within groups. The scarcity pricing mechanism, which is a per-unit tax equal to the marginal extraction externality, is more effective at reducing extraction than an increasing block tax that only taxes units extracted above the social optimum. In contrast, observability impacts only the Baseline condition by encouraging free-riding instead of creating moral pressure to cooperate.
    Keywords: Common Pool Resource game, taxation mechanisms, observability, cooperation, heterogeneity, experiment
    JEL: C92 H23 D74
    Date: 2017
  8. By: Bernard, René
    Abstract: The government fragmentation hypothesis (GFH) states that coalition governments spend more than single-party governments due to an underlying common pool problem. Using a large panel data set on 604 local governments in the German state of Baden-Württemberg for the 1994-2014 period, I test the GFH for tax rates, the growth in government debt as well as expenditures and its sub-categories. Studies using standard regression methods fail to identify causal effect as the type of government is generally not random. I apply a RDD, that exploits quasi-random variation generated by close elections. I add external validity to the recent quasi-experimental literature by investigating the GFH for a mayor-council system. I find that contrary to the theoretical prediction, coalition governments do not increase taxes and government debt. There is a non-robust, negative effect on total expenditures, which is mainly driven by administrative expenditures and material expenditures.
    Keywords: government fragmentation,common pool problems,legislative policy-making,government spending,local fiscal policy,local taxation,local elections,municipality data,regression discontinuity design,Fragmentierung der Regierung,Common Pool Problem,Gesetzgebung und politische Entscheidungsfindung,Staatsausgaben,kommunale Finanzpolitik,kommunale Steuern,Kommunalwahlen,Gemeindedaten,Regressions-Diskontinuitäts-Design
    JEL: C21 D72 D78 H11 H71 H72
    Date: 2017
  9. By: Takashi Kamihigashi (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Kerim Keskin (Department of Economic, Kadir Has University, Turkey); Cagri Saglam (Department of Economics, Bilkent University, Turkey)
    Abstract: Strong Nash equilibrium (see Aumann, 1959) and coalition-proof Nash equilibrium (see Bernheim et al., 1987) rely on the idea that players are allowed to form coalitions and make joint deviations. They both consider a case in which any coalition can be formed. Yet there are many real-life examples where the players cannot form certain types of coalitions/subcoalitions. There may also be instances, when all coalitions are formed, where conflicts of interest arise and prevent a player from choosing an action that simultaneously meets the requirements of the two coalitions to which he or she belongs. Here we address these criticisms by studying an organizational framework where some coalitions/subcoalitions are not formed and where the coalitional structure is formulated in such a way that no conflicts of interest remain. We define an organization as a collection of partitions of a set of players ordered in such a way that any partition is coarser than the partitions that precede it. For a given organization, we introduce the notion of organizational Nash equilibrium. We analyze the existence of equilibrium in a subclass of games with strategic complementarities and illustrate how the proposed notion refines the set of Nash equilibria in some examples of normal form games.
    Keywords: Nash Equilibrium, Refinements, Coalitional Structure, Organizational Structure, Games with Strategic Complementarities
    JEL: C72
    Date: 2017–10
  10. By: Federico Quaresima (Università Politecnica delle Marche, Ancona); Fabio Fiorillo (Università Politecnica delle Marche, Ancona)
    Abstract: This article investigates the patronage phenomenon under a theoret- ical point of view. Legislative dissent could have damaging effects for both party and legislator, i.e., legislators depend on their party for re- election, which in turn partially depends on its reputation of cohesiveness. Nevetheless dissent allows the legislator to build a good reputation with local constituents for re-election sake. Then parties may sometimes bene- fit from tolerating some level of dissent. As a result the party has a double goal. It should require the maximum loyalty from legislators, not ignoring the legislators' reputation with the voters. In this paper we consider pa- tronage as an additional tool for the party to calibrate parlamentarians' loyalty towards the party itself and towards constituencies.
    Keywords: Patronage, political selection, exit strategy, bureaucracy
    JEL: D72 D73
    Date: 2017–09
  11. By: Mamoon, Dawood
    Abstract: The paper undertakes a detailed analysis of economic progress and welfare measures in determining good governance outcomes in Pakistan. There is evidence that inequality stifles the capacity of political, economic and social governance by creating an elite class that protect their economic and political interests and undertake legislation primarily to the benefit of ruling elites. Furthermore our results also suggest that economic development empower the economically and socially excluded groups of the society and give them more voice in favor of policies that are representative of the issues like accountability against corruption or favoritism.
    Keywords: Governance, Welfare, Economic Development
    JEL: E6 E61 P1 P11
    Date: 2017–10–06
  12. By: Kurschilgen, Michael; Morell, Alexander; Weisel, Ori
    Abstract: We experimentally examine how the level of internal conflict, and whether such conflict is transparent to other teams, affects teams' ability to compete vis-à-vis each other, and, consequently, market outcomes. We find that internal conflict leads to (tacit) coordination on high prices in uniform private-pay duopolies, but places private-pay teams at a competitive disadvantage in mixed duopolies. Competition is softened by transparency in uniform markets, but intensified in mixed markets.
    JEL: D43 L22 C92
    Date: 2017
  13. By: Fleckinger, Pierre; Mimra, Wanda; Zago, Angelo
    Abstract: We build a model of collective reputation under moral hazard to analyze incentives under collective reputation. Producers can produce high quality, but it is only imperfectly detected. Products not detected as of high quality are pooled by to the collective reputation structure. Collective reputation can yield higher quality and welfare than individual reputation. While groups unravel in absence of transfers even when efficient, simple collective reputation contracts implement the First Best.
    JEL: D82 D71 L15
    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.
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