nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2018‒01‒08
twenty papers chosen by
Stan C. Weeber, McNeese State University

  1. Compulsory Voting, Voter Turnout and Asymmetrical Habit-formation By Stefanie Gäbler; Niklas Potrafke; Felix Rösel
  2. Assessment Voting in Large Electorates By Hans Gersbach; Akaki Mamageishvili; Oriol Tejada
  3. Multiple-aggregate games By Alex Dickson
  4. Sitting on the fence: Pork - barrels and democratization under threat of conflict. The case of Ghana, 1996 - 2004 By Pierre André; Sandrine Mesplé-Somps
  5. The Social Dynamics of Collective Action: Evidence from the Captain Swing Riots, 1830-31 By Toke Aidt; Gabriel Leon; Max Satchell
  6. Austerity and the rise of the Nazi party By Gregori Galofré-Vilà; Christopher M. Meissner; Martin McKee; David Stuckler
  7. Similar or Different? Exploring the Gap between Federal and Regional Elections in Russia By Rostislav Turovsky; Marina Sukhova
  8. Cluster Dynamics: Learning from Competitiveness Cluster Policy. The Case of 'Secure Communicating Solutions' in the French Provence-Alpes-Côte d'Azur Region By Christian Longhi
  9. Creating an Efficient Culture of Cooperation By Fehr, Ernst; Williams, Tony
  10. Do Gender Preference Gaps Impact Policy Outcomes? By Eva Ranehill; Roberto A. Weber
  11. The German model of industrial relations: (Where) does it still exist? By Oberfichtner, Michael; Schnabel, Claus
  12. Collective bargaining through the magnifying glass: A comparison between the Netherlands and Portugal By Alexander Hijzen; Pedro S. Martins; Jante Parlevliet
  13. Friends and Foes at Work: Assigning Teams in a Social Network By Daske, Thomas
  14. The Determinants of Islamophobia - An Empirical Analysis of the Swiss Minaret Referendum By Olga Orlanski; Günther G. Schulze
  15. Politics, Hospital Behaviour and Health Care Spending By Zack Cooper; Amanda Kowalski; Eleanor Neff Powell; Jennifer Wu
  16. The Political Economy of Opposition Groups: Peace, Terrorism, or Civil Conflict By Michael Jetter; Bei Li
  17. Ecologies of ideologies : Explaining party entry and exit in European parliaments, 1945-2013 By van de Wardt, Marc; Berkhout, Joost; Vermeulen, Floris
  18. Exploring the Effects on the Electoral College of National and Regional Popular Vote Interstate Compact: An Electoral Engineering Perspective By Laurent, Thibault; Le Breton, Michel; Lepelley, Dominique; de Mouzon, Olivier
  19. Implications of multilateral tariff bindings on the formation of preferential trade agreements and quest for global free trade By Moise Nken; Halis Murat Yildiz;
  20. Assessing the 2016 U.S. Presidential Election Popular Vote Forecasts By Graefe, Andreas; Armstrong, J. Scott; Jones, Randall J.; Cuzan, Alfred G.

  1. By: Stefanie Gäbler; Niklas Potrafke; Felix Rösel
    Abstract: We examine whether compulsory voting influences habit-formation in voting. In Austria, some states temporarily introduced compulsory voting in national elections. We exploit border municipalities across two states that differ in compulsory voting legislation using a difference-in-differences and a difference-in-discontinuity approach. We investigate the long-term effects of compulsory voting on voter turnout, invalid votes and vote shares for left-wing and right-wing parties. The results show that compulsory voting increased voter turnout by 3.4 percentage points. When compulsory voting was abolished, voter turnout, however, returned to the pre-compulsory voting level. The results also do not suggest that compulsory voting influenced invalid votes and vote shares of left-wing and right-wing parties asymmetrically. We conclude that compulsory voting was not habit-forming.
    Keywords: compulsory voting, voter turnout, party vote shares, difference-in-discontinuity design, habit-formation, Austria
    JEL: D72 P10
    Date: 2017
  2. By: Hans Gersbach; Akaki Mamageishvili; Oriol Tejada
    Abstract: We analyze Assessment Voting, a new two-round voting procedure that can be applied to binary decisions in democratic societies. In the first round, a randomly-selected number of citizens cast their vote on one of the two alternatives at hand, thereby irrevocably exercising their right to vote. In the second round, after the results of the first round have been published, the remaining citizens decide whether to vote for one alternative or to ab- stain. The votes from both rounds are aggregated, and the final outcome is obtained by applying the majority rule, with ties being broken by fair randomization. Within a costly voting framework, we show that large elec- torates will choose the preferred alternative of the majority with high prob- ability, and that average costs will be low. This result is in contrast with the literature on one-round voting, which predicts either higher voting costs (when voting is compulsory) or decisions that often do not represent the preferences of the majority (when voting is voluntary).
    Date: 2017–12
  3. By: Alex Dickson (Department of Economics, University of Strathclyde)
    Abstract: Consider an environment in which individuals are organised into groups, they contribute to the collective action of their group, and are influenced by the collective actions of other groups; there are externalities between groups that are transmitted through the aggregation of groups’ actions. The theory of ‘aggregative games’ has been successfully applied to study games in which players’ payoffs depend only on their own strategy and a single aggregation of all players’ strategies, but the setting just described features multiple aggregations of actions—one for each group—in which the nature of the intra-group strategic interaction may be very different to the inter-group strategic interaction. The aim of this contribution is to establish a framework within which to consider such ‘multiple aggregate games’; present a method to analyse the existence and properties of Nash equilibria; and to discuss some applications of the theory to demonstrate how useful the technique is for analysing strategic interactions involving individuals in groups.
    Keywords: aggregative game, group interaction, contests, public goods, bilateral oligopoly
    JEL: C72 D01 D72 H41 L13
    Date: 2017–02
  4. By: Pierre André (autre - Chercheur Indépendant); Sandrine Mesplé-Somps (LEDa - Université Paris Dauphine (Paris 9))
    Abstract: This paper studies political competition in the case of a democratization process.We present an illustrative model describing political competition when the opposition threatens the stability of the country. In some cases, our model predicts the government should invest in opposition districts to avoid political agitation. This contrasts withexisting literature on established democracies, where public funds usually target ruling, party supporters or electorally tight districts.We empirically observe the first democratic changeover in Ghana in 2000. Implement-ing a diff-in-diff strategy, we find that districts with a leading political party memberappear to receive slightly more public funds when their party is not in charge. Thisphenomenon is found in urban areas and in areas that vote the most for this leadingmember’s party. Hence it occurs in places with the potential for political agitation.
    Keywords: Politics,Ghana,Public goods,Elections
    Date: 2017–10–19
  5. By: Toke Aidt; Gabriel Leon; Max Satchell
    Abstract: Social unrest often erupts suddenly and diffuses quickly. What drives people to overcome their collective action problem and join a riot or protest, turning what is initially a small event into a widespread movement? We address this question by examining the Swing riots of 1830-31. The communication constraints of the time induced spatio-temporal variation in exposure to news about the uprising, allowing us to estimate the role of contagion in the spread of the riots. We find that local (rather than national) sources of information were central in driving contagion, and that this contagion magnified the impact that social and economic fundamentals had on riots by a factor of 2.65. Our historical data allow us to overcome a number of econometric challenges, but the Swing riots are of independent interest as well: they contributed to the passage of the Great Reform Act, a key step in Britain’s institutional development.
    Keywords: riots, diffusion, conflict, contagion, Captain Swing
    JEL: D72 D74 O16
    Date: 2017
  6. By: Gregori Galofré-Vilà; Christopher M. Meissner; Martin McKee; David Stuckler
    Abstract: The current historical consensus on the economic causes of the inexorable Nazi electoral success between 1930 and 1933 suggests this was largely related to the Treaty of Versailles and the Great Depression (high unemployment and financial instability). However, these factors cannot fully account for the Nazi’s electoral success. Alternatively it has been speculated that fiscally contractionary austerity measures, including spending cuts and tax rises, contributed to votes for the Nazi party especially among middle- and upper-classes who had more to lose from them. We use voting data from 1,024 districts in Germany on votes cast for the Nazi and rival Communist and Center parties between 1930 and 1933, evaluating whether radical austerity measures, measured as the combination of tax increases and spending cuts, contributed to the rise of the Nazis. Our analysis shows that chancellor Brüning’s austerity measures were positively associated with increasing vote shares for the Nazi party. Depending on how we measure austerity and the elections we consider, each 1 standard deviation increase in austerity is associated with a 2 to 5 percentage point increase in vote share for the Nazis. Consistent with existing evidence, we find that unemployment rates were linked with greater votes for the Communist party. Our findings are robust to a range of specifications including a border-pair policy discontinuity design and alternative measures of radicalization such as Nazi party membership. The coalition that allowed a majority to form government in March 1933 might not have been able to form had fiscal policy been more expansionary.
    JEL: E6 N1 N14 N44
    Date: 2017–12
  7. By: Rostislav Turovsky (National Research University Higher School of Economics); Marina Sukhova (National Research University Higher School of Economics)
    Abstract: This research is focused on the issue of differences in results received in elections for regional and federal legislatures that are held according to the proportional system. In particular, the question of whether the authorities’ decision to favour the combination of synchronous regional and federal elections has proved effective. This research showed that, in simultaneous elections held at different territorial levels, United Russia always delivers better results at a federal level than at a regional level, while oppositional parties, conversely, perform better at a regional level than they do at a federal level. This can be explained by the phenomenon of strategic voting, according to which voters prefer to cast their votes for more stable and major players in federal elections, and that they are more likely to vote sincerely in regional elections. However, in separate elections these trends are not retained, and United Russia in particular has been noted to perform better in regional campaigns held during the inter-election period, than it did in the preceding and subsequent federal elections. Analysis of the degree of competitiveness showed that differences in the level of competitiveness in federal and regional elections are almost always lower in combined elections than in separate elections
    Keywords: regional elections, federal elections, electoral support, competitiveness, effective number of parties, party system, strategic voting, nationalisation.
    JEL: D72
    Date: 2017
  8. By: Christian Longhi (Université Côte d'Azur; CNRS, GREDEG)
    Abstract: The paper aims to identify the forms and dynamics of the organizational structures of high-tech clusters overtime. Since Markusen (1996), it is well acknowledged that diversity is an emergent property of clusters, but the interactions between local and non-local actors of the clusters are difficult to trace because of lack of relevant data. The cluster policies developed to fix the network failures between the heterogeneous actors – large and small firms, universities, research institutes – of the current processes of innovation provide new information opportunities. In France, Competitiveness Clusters work as a "factories of project"; the information they produce on collective R&D projects applying for subsidies provides a proxy of local and non-local relations of the clusters. Social network analysis is used to infer the organizational structure of the collective learning networks and trace their dynamics. The case studies considered are Sophia-Antipolis and Rousset, two high tech clusters which belong to the same Competitiveness Cluster, 'Secure Communicating Solutions' in the Provence-Alpes-Côte d’Azur Region. The paper highlights the decoupling of the two clusters overtime as a consequence of distinctive organizational structures. The diversity of the dynamics of the collective learning networks which emerges through the analysis of the collective R&D projects in the two high tech clusters shows that knowledge creation and innovation can follow different paths and questions the public policies implemented.
    Keywords: Cluster Policy, Competitiveness Cluster, Collective Learning Networks, Innovation, Social Network Analysis, Sophia Antipolis, Rousset
    JEL: R11 R58 L2 L52
    Date: 2017–12
  9. By: Fehr, Ernst (University of Zurich); Williams, Tony (University of Zurich)
    Abstract: Throughout human history, informal sanctions by peers were ubiquitous and played a key role in the enforcement of social norms and the provision of public goods. However, a considerable body of evidence suggests that informal peer sanctions cause large collateral damage and efficiency costs. This raises the question whether peer sanctioning systems exist that avoid these costs and whether other, more centralized, punishment systems are superior and will be preferred by the people. Here, we show that efficient peer sanctioning without much need for costly punishment emerges quickly if we introduce two relevant features of social life into the experiment: (i) subjects can migrate across groups with different sanctioning institutions and (ii) they have the chance to achieve consensus about normatively appropriate behavior. We also show that subjects universally reject peer sanctioning without a norm consensus opportunity – an institution that has hitherto dominated research in this field – in favor of our efficient peer sanctioning institution or an equally efficient institution where they delegate the power to sanction to an elected judge. Migration opportunities and normative consensus building are key to the quick emergence of an efficient culture of universal cooperation because the more prosocial subjects populate the two efficient institutions first, elect prosocial judges (if institutionally possible), and immediately establish a social norm of high cooperation. This norm appears to guide subjects' cooperation and punishment choices, including the virtually complete removal of antisocial punishment when judges make the sanctioning decision.
    Keywords: endogenous institutions, punishment, cooperation, public goods
    JEL: D02 D03 D72 H41
    Date: 2017–11
  10. By: Eva Ranehill; Roberto A. Weber
    Abstract: Many studies document systematic gender differences in a variety of important economic preferences, such as risk-taking, competition and pro-sociality. One potential implication of this literature is that increased female representation in decision-making bodies may significantly alter organizational and policy outcomes. However, research has yet to establish a direct connection from gender differences in simple economic choice tasks, to voting over policy and to the resulting outcomes. We conduct a laboratory experiment to provide a test of such a connection. In small laboratory “societies,” people repeatedly vote for a redistribution policy and engage in a real-effort production task. Women persistently vote for more egalitarian redistribution. This gender difference is large relative to other voting differences based on observable characteristics and is partly explained by gender gaps in preferences and beliefs. Gender voting gaps persist with experience and in environments with varying degrees of risk. We also observe policy differences between male- and female-controlled groups, though these are considerably smaller than the mean individual differences—a natural consequence of the aggregation of individual preferences into collective outcomes. Thus, we provide evidence for why substantial and robust gender differences in preferences may often fail to translate into differential policy outcomes with increased female representation in policymaking.
    Keywords: gender differences, risk, altruism, redistributive preferences, experiment
    JEL: C91 C92 J16 H23
    Date: 2017
  11. By: Oberfichtner, Michael; Schnabel, Claus
    Abstract: Using data from the representative IAB Establishment Panel, this paper charts changes in the two main pillars of the German IR model over the last 20 years. It shows that collective bargaining coverage and worker representation via works councils have substantially fallen outside the public sector. Less formalized and weaker institutions such as voluntary orientation of uncovered firms towards sectoral agreements and alternative forms of employee representation at the workplace have partly attenuated the overall erosion in coverage. Multivariate analyses indicate that the traditional German IR model (with both collective agreements and works council presence) is more likely to be found in larger and older establishments, and it is less likely in establishments managed by the owner, in single and foreign-owned establishments, in individually-owned firms or partnerships, and in exporting establishments. In contrast, more than 60 percent of German establishments did not exhibit bargaining coverage or orientation or any kind of worker representation in 2015. Such a complete absence of the main institutional features of the German IR model is predominantly found in small and medium-sized establishments, in particular in the service sector and in eastern Germany, and its extent is increasing dramatically.
    Keywords: collective bargaining,bargaining coverage,works council,worker participation,industrial relations,Germany
    JEL: J50 J52 J53
    Date: 2017
  12. By: Alexander Hijzen (OECD and IZA); Pedro S. Martins (Queen Mary University of London, NovaSBE and IZA); Jante Parlevliet (De Nederlandsche Bank and University of Amsterdam)
    Abstract: Since the global financial crisis, sector-level bargaining has come under renewed scrutiny. While in Southern Europe, the crisis raised concerns about the role of collective bargaining as an obstacle to labour market adjustment, in Northern Europe it was perceived more favourably and, according to some, may even have helped to weather the fallout of the crisis more easily. This paper seeks to contribute to a deeper understanding of sector-level bargaining systems and their role for labour market performance. We compare two countries with seemingly similar collective bargaining systems, the Netherlands and Portugal, and document a number of features that may affect labour market outcomes, including: i) the scope for flexibility at the firm or worker level within sector-level agreements; ii) the emphasis on representativeness as a criterion for extensions; iii) the effectiveness of coordination across bargaining units; and iv) pro-active government policies to enhance trust and cooperation between the social partners.
    Keywords: Industrial Relations, Social Dialogue, Employment
    JEL: J5 P52
    Date: 2017–12
  13. By: Daske, Thomas
    Abstract: In many firms, production requires the division of staff into teams. If only team performance is observable, moral hazard in teams is inevitable. This variant of moral hazard can be overcome or exacerbated by the interpersonal relationships among team members. I investigate how the division of staff into teams should account for the agents' social network of interpersonal relationships. Considering piece rate compensation for teams, I identify rules for efficient team assignment. Depending on the shape of individual effort costs, team assignment follows either a maximin or maximax rule with regard to team members' willingness to cooperate. Generally, the preferences of staff for team composition can collide with efficient production. A universal mechanism guaranteeing efficiency while delegating responsibility for team assignment to the agents does not exist. Successful staffing thus requires knowledge of the interpersonal relationships at work and, at times, control instead of delegation.
    Keywords: staffing,social preferences,social network,delegation,control
    JEL: D74 D82 D85 M54
    Date: 2017
  14. By: Olga Orlanski; Günther G. Schulze
    Abstract: We analyze the determinants of Islamophobia using the only nation-wide anti-Islam referendum ever, which was held in Switzerland in 2009 and led to the prohibition of minarets. We find economic, environmental, and cultural factors as well as the presence of Muslims to determine voting behavior. Approval rates for the bill rise with unemployment and decrease with education, income, and the attractiveness of the location. Approval is higher in rural areas, in municipalities with a higher share of men, and in the Italian and German speaking parts of Switzerland. It is higher in municipalities with a higher share of Muslims, which strongly supports the ’religious threat’ hypothesis. We compare the voting behavior in the minaret referendum with the referendum “for democratic naturalizations”, held in 2008, in order to disentangle determinants of Islamophobia from those of xenophobia. We show that our results are robust to the estimation with ecological inference.
    Keywords: referendum, minaret referendum islamophobia, xenophobia, ecological fallacy
    JEL: D72 D78 J15
    Date: 2017
  15. By: Zack Cooper; Amanda Kowalski; Eleanor Neff Powell; Jennifer Wu
    Abstract: This paper examines the link between legislative politics, hospital behaviour, and health care spending. When trying to pass sweeping legislation, congressional leaders can attract votes by adding targeted provisions that steer money toward the districts of reluctant legislators. This targeted spending provides tangible local benefits that legislators can highlight when fundraising or running for re-election. We study a provision - Section 508 - that was added to the 2003 Medicare Modernization Act (MMA). Section 508 created a pathway for hospitals to apply to get their Medicare payment rates increased. We find that hospitals represented by members of the House of Representatives who voted 'Yea' on the MMA were significantly more likely to receive a 508 waiver than hospitals represented by members who voted 'Nay.' Following the payment increase generated by the 508 program, recipient hospitals treated more patients, increased payroll, hired nurses, added new technology, raised CEO pay, and ultimately increased their spending by over $100 million annually. Section 508 recipient hospitals formed the Section 508 Hospital Coalition, which spent millions of dollars lobbying Congress to extend the program. After the vote on the MMA and before the vote to reauthorize the 508 program, members of Congress with a 508 hospital in their district received a 22% increase in total campaign contributions and a 65% increase in contributions from individuals working in the health care industry in the members' home states. Our work demonstrates a pathway through which the link between politics and Medicare policy can dramatically affect US health spending.
    Keywords: health care, US, hospital, politics
    JEL: I10 I18 H51 D72 P16
    Date: 2017–12
  16. By: Michael Jetter; Bei Li
    Abstract: This paper proposes a simple framework to better understand an opposition group’s choice between peace, terrorism, and open civil conflict against the government. Our model implies that terrorism emerges if constraints on the ruling executive group are intermediate and rents are sizeable, whereas conflict looms under poor executive constraints. Analyzing annual data for up to 158 countries in a panel setting provides evidence consistent with these hypotheses. The results emerge both when considering the incidence and onset of terrorism and conflict. The corresponding magnitudes are economically sizeable. Overall, these findings can help us understand and anticipate the choices of opposition groups.
    Keywords: conflict, executive constraints, foreign aid, natural resource rents, oil rents, political institutions, rents, terrorism
    JEL: D74 F35 O11 P47 P48 Q34
    Date: 2017
  17. By: van de Wardt, Marc (Tilburg University, School of Economics and Management); Berkhout, Joost; Vermeulen, Floris
    Abstract: This study introduces a population-ecological approach to the entry and exit of political parties. A primary proposition of population ecology is that organizational entry and exit depends on the number of organizations already present: that is, density. We propose that political parties mainly experience competition from parties in the same ideological niche (left, centre, right). Pooled time-series analyses of 410 parties, 263 elections and 18 West-European countries largely support our expectations. We find that political parties are more likely to exit when density within their niche increases. Also there is competition between adjacent ideological niches, i.e. between centrist and right-wing niches. In contrast to our expectations, neither density nor institutional rules impact party entry. This raises important questions about the rationale of prospective entrants.
    Date: 2017
  18. By: Laurent, Thibault; Le Breton, Michel; Lepelley, Dominique; de Mouzon, Olivier
    Abstract: The main purpose of this paper is to explore the consequences of the formation of either a Regional Popular Vote Interstate compact or a National Popular Vote Interstate compact on the functioning of the Electoral College. The two versions of interstate Compact which are considered here differ in only one respect: in one case the interstate compact allocates its electoral votes to the regional popular winner while in the other case it allocates these votes to the national popular winner. They both differ from the ongoing National Popular Vote Interstate Compact as it is assumed that the agreement is effective as soon as the members sign it. The decisiveness and welfare analysis are conducted for a simplified symmetric theoretical version of the Electoral College where the malapportionment problems are absent. The three most popular probabilistic models are considered and the study is conducted either from the self-interest perspective of the initiators of the interstate compact or from a general interest perspective. The analysis combines analytical arguments and simulations.
    Keywords: Electoral College; Voting Power
    JEL: D71 D72
    Date: 2017–11
  19. By: Moise Nken (Department of Economics, Ryerson University, Toronto, Canada); Halis Murat Yildiz (Department of Economics, Ryerson University, Toronto, Canada);
    Abstract: Using an endogenous preferential trade agreement (PTA) formation model under all possible multilaterally negotiated bound tariff rates, we examine the effects of multilateral trade liberalization on the role of PTAs in achieving global free trade. We first show that, when countries are completely symmetric, no country has an incentive to unilaterally deviate (free ride) from free trade network while exclusion incentives arise when bound tariffs are sufficiently low. Due to the relatively flexible nature of the FTA formation, such exclusion incentives go unexercised and free trade always obtains as the coalition-proof Nash equilibrium (CPNE) of the FTA game. However, such flexibility does not exist under the CU game and thus countries are able to exercise the exclusion incentive and free trade fails to be CPNE when the bound tariff rates are sufficiently low. We then consider a scenario where countries are asymmetric with respect to their comparative advantage. The country with a weaker comparative advantage has an incentive to free ride on trade liberalization of the other two countries and lower bound tariff rates disciplines this incentive via limiting the ability to set optimal tariffs. As a result, multilateral free trade is more likely to be a CPNE as the multilateral negotiated bound tariff rates decline. This result provides support for the idea that multilateral trade liberalization acts as a complement to the FTA formation in achieving global free trade.
    Keywords: Bound Tariff Rates, Coalition proof Nash equilibrium, Free Trade Agreement, Customs Union, Exclusion Incentive, Free Riding Incentive
    Date: 2017–12
  20. By: Graefe, Andreas; Armstrong, J. Scott; Jones, Randall J.; Cuzan, Alfred G.
    Abstract: The PollyVote uses evidence-based techniques for forecasting the popular vote in presidential elections. The forecasts are derived by averaging existing forecasts generated by six different forecasting methods. In 2016, the PollyVote correctly predicted that Hillary Clinton would win the popular vote. The 1.9 percentage-point error across the last 100 days before the election was lower than the average error for the six component forecasts from which it was calculated (2.3 percentage points). The gains in forecast accuracy from combining are best demonstrated by comparing the error of PollyVote forecasts with the average error of the component methods across the seven elections from 1992 to 2012. The average errors for last 100 days prior to the election were: public opinion polls (2.6 percentage points), econometric models (2.4), betting markets (1.8), and citizens’ expectations (1.2); for expert opinions (1.6) and index models (1.8), data were only available since 2004 and 2008, respectively. The average error for PollyVote forecasts was 1.1, lower than the error for even the most accurate component method.
    Keywords: election, forecasting, voting
    JEL: C53 D72
    Date: 2017–02–07

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