nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2018‒03‒05
twenty papers chosen by
Stan C. Weeber, McNeese State University

  1. Collective vs. Individual Lobbying By Norimichi Matsueda
  2. Deliberative Structures and their Impact on Voting Behavior under Social Conflict By Jordi Brandts; Leonie Gerhards; Lydia Mechtenberg
  3. Essays in the Economics of Corruption: Experimental and empirical evidence By Nastassia Leszczynska
  4. Why Delegate? Comparing Direct and Representative Democracy By Guadalupe Correa-Lopera
  5. Power of Joint Decision-Making in a Finitely-Repeated Dilemma By Kenju Kamei
  6. Serial Priority in Project Allocation: A Characterisation By Madhav Raghavan
  7. Environmental investment decisions: experimental evidence of team versus individual decision making By Felgendreher, Simon; Hennlock, Magnus; Löfgren, Åsa; Wollbrant, Conny
  8. Tariff Cooperation in Free Trade Areas By Mai, Joseph; Stoyanov, Andrey
  9. Collective Bargaining Through the Magnifying Glass; A Comparison Between the Netherlands and Portugal By Alexander Hijzen; Pedro S. Martins; Jante Parlevliet
  10. The Determinants of Islamophobia – An Empirical Analysis of the Swiss Minaret Referendum By Olga Orlanski; Günther G. Schulze
  11. The median rule in judgement aggregation By Nehring, Klaus; Pivato, Marcus
  12. Naive Learning in Social Networks with Random Communication By Bernd (B.) Heidergott; Jia-Ping Huang; Ines (I.) Lindner
  13. The Effect of Inequality Aversion on a Climate Coalition Formation: Theory and Experimental Evidence By Lin, Yu-Hsuan
  14. Comparing the Aitchison distance and the angular distance for use as inequality or disproportionality measures for votes and seats By Colignatus, Thomas
  15. Attribution Error in Economic Voting: Evidence From Trade Shocks By Masami Imai; Cameron Shelton; Rosa Hayes
  16. Satisfaction and Perception of Conflict in Teams: Understanding their Relationship and the Importance of Interaction Types By Amélie Thery; Michel Verstraeten
  17. Perfect and Imperfect Strangers in Social Dilemmas By Ghidoni, Riccardo; Cleave, Blair; Suetens, Sigrid
  18. Believing in Others’ Dishonesty: An Experimental Study on Beliefs about Lying By Silvia Lübbecke
  19. Lies have long legs. Cheating, public scrutiny and loyalty in teams By Pietro Battiston; Simona Gamba; Matteo Rizzolli; Valentina Rotondi
  20. A theory of autocratic transition: Prerequisites to self-enforcing democracy By Apolte, Thomas

  1. By: Norimichi Matsueda (School of Economics, Kwansei Gakuin University)
    Abstract: In this paper, we compare the political equilibrium outcomes under two distinct institutional setups concerning the regulated firms' lobbying environment: collective and individual lobbying. Under both regimes, each firm voluntarily chooses whether or not to participate in lobbying activities to influence an environmental regulation with which all the firms need to comply eventually. While, under collective lobbying, firms form a single group before conducting lobbying activities, there is no such pre-coordination under individual lobbying and firms can lobby independently if they wish. The difference in the equilibrium outcomes is quite striking: whereas only a small fraction of firms join the industrial lobbying group under collective lobbying, all the firms participate in lobbying activities in the case of individual lobbying. We also evaluate the desirability of the two lobbying regimes from the perspectives of both individual firms and the society as a whole, and discuss the implications for possible institutional interventions.
    Keywords: common agency, compensating equilibrium, environmental regulation, free-rider, lobbying
    JEL: D72 H41 Q58
    Date: 2018–02
  2. By: Jordi Brandts; Leonie Gerhards; Lydia Mechtenberg
    Abstract: Inequalities in democracies are multi-faceted. They not only incorporate differences in economic opportunities, but also differences in access to information and social influence. In a lab experiment, we study the interaction of these inequalities to provide a better understanding of socio-political tensions in modern societies. We identify the tragedy of the elite, the dilemma that privileged access to information about a fundamental state that mediates political conflict creates lying incentives for the better informed. In our experiment, an electorate consists of two groups, one informed and one uninformed about an uncertain state of the world. Incentives depend on this state. Before voting the two groups can communicate. We study four different communication protocols which vary the access to communication channels of the two groups and are meant to represent societies with different degrees of openness. We hypothesize that the deliberative structures affect group identities, preferences, and voting. Our observed outcomes largely coincide with those predicted by our theoretical analysis.
    Keywords: communication, social conflict, Inequality
    JEL: C92 D91
    Date: 2018–02
  3. By: Nastassia Leszczynska
    Abstract: The advent of experimental methodologies have led to decisive progress in the study of corrupt behaviour in the last two decades. Since they can complement survey data and perception indexes with controlled experimental data, scholars and policy makers have reached a better understanding of decision-making in bribery situations and are able to design innovative anticorruption policies.In this thesis, I use experimental and empirical data to contribute to the field of the economics of corruption. The first two chapters of this PhD dissertation use experimental methodologies to study decision-making in a bribery scenario. The first chapter tests an anti-corruption strategy with a lab in the field experiment in Burundi. The second chapter studies the fairness concerns that might arise when dealing with redistribution in a bribery situation. The third chapter uses an empirical analysis to explore the controversial issue of political moonlighting, i.e. having outside activities while holding public office. It investigates "double-hat politicians", who combine mayor and parliamentary positions in Wallonia.In a first chapter, written with Jean-Benoit Falisse, we explore the effect of anti- corruption messages on corrupt behavior and public service delivery. In a novel lab-in-the-field experiment, 527 public servants from Burundi were asked to allocate rationed vouchers between anonymous citizens; some of these citizens attempted to bribe the public servants to obtain more vouchers than they were entitled to. Two groups of public servants were randomly exposed to short messages about good governance or professional identity reminders. Participants in these two groups behaved in a fairer manner than those of a third group who were not exposed to any message. The result is more robust in the case of the group exposed to the professional identity reminder. The underlying mechanisms seem to be that when a public servant reflects upon governance values and her professional identity, the moral cost increases, prompting more equal service delivery. Bribe-taking was not impacted by the messages. The experiment provides new insights into the design of anti-corruption strategies.The second chapter, written with Lena Epp, investigates the impact of a public officials’ fairness considerations towards citizens in a petty corruption situation. Other-regarding preferences, and, more particularly, fairness concerns are widely acknowledged as crucial elements of individual economic decision-making. In petty corruption contexts, public officials are to a large extent aware of differences between citizens. Here, we experimentally investigate how fairness considerations may impact on corrupt behaviour. Our novel bribery game reveals that bribes are less frequently accepted when bribers are unequal in terms of endowments. These results suggest that fairness considerations can influence corrupt behaviour.In the last chapter, I focus on political moonlighting in Wallonia. Activities outside of public office or combining specific public offices simultaneously is a topic of ongoing heated debates. An element crucial to these discussions is whether moonlighting is detrimental for politicians’ performance. In Belgium, the combination of local executive and regional legislative offices, i.e. double hat politicians, is a frequent habit for a majority of politicians. This accumulation of activities might lead to (un-)desirable outcomes in terms of political achievements. This chapter investigates the impact of holding several remunerated and honorary positions on regional MPs parliamentary activities and mayor’s municipality performance in Wallonia. I use a database of all public and private positions held by Belgian politicians in Wallonia since the disclosure of positions became compulsory for those holding at least one public position, i.e. from 2004 to 2016. For members of Parliament, wearing a double hat reduces global parliamentary activity. For mayors, it seems that holding more remunerated positions is associated with less efficient municipality management.
    Keywords: corruption; experimental economics; behavioural games; public service delivery; fairness; political moonlighting; bribery game; messages; rank reversal aversion
    Date: 2018–02–20
  4. By: Guadalupe Correa-Lopera (Department of Economics, University of Málaga)
    Abstract: The growing demand for referendums challenges the traditional model of representative democracy. Why may voters prefer to decide by themselves (direct democracy) rather than delegate on their representatives (representative democracy)? We propose a model in which voters select either a policy or a representative under uncertainty over the socially correct policy. Under direct democracy, the policy selected by voters is implemented, while under representative democracy the elected representative decides the policy. We assume that representatives have informational advantage. Our main result shows that a society in which the majority of voters are selfish may prefer a system of political representation when they are strongly ideologically polarized. If, instead of ideological confrontation, there is consensus among these selfish voters, referendum is the preferred instrument for making decisions. Non-selfish societies, however, always prefer to delegate on better informed representatives.
    Keywords: Direct democracy; Representative democracy; Ideological electorate; Pragmatic electorate; Polarization; Information.
    JEL: D72 D82
    Date: 2018–01
  5. By: Kenju Kamei
    Abstract: A rich body of literature has proposed that pairs behave significantly differently from individuals due to a number of reasons such as group polarization. This paper experimentally compares cooperation behaviors between pairs and individuals in a finitely-repeated two-player public goods game (continuous prisoner’s dilemma game). We show that pairs contribute significantly more than individuals to their group accounts. Especially when two pairs are matched with each other for the entire periods, they successfully build long-lasting cooperative relationships with their matched pairs. Our detailed analyses suggest that the enhanced cooperation behavior of pairs may be driven by (a) the mere fact that they have partners as decision-making units when they make decisions, (b) group polarization – those who initially prefer to contribute smaller amounts are more affected by the partners in their pairs, and (c) stronger conditional cooperation behavior of pairs to their matched pairs.Length: 51 pages
  6. By: Madhav Raghavan
    Abstract: We consider a model in which projects are to be assigned to agents based on their preferences, and where projects have capacities, i.e., can each be assigned to a minimum and maximum number of agents. The extreme cases of our model are the social choice model (the same project is assigned to all agents) and the house allocation model (each project is assigned to at most one agent). We show that, with general capacities,an allocation rule satis es strategy-proofness, group-non-bossiness, limited in uence, unanimity, and neutrality, if and only if it is a strong serial priority rule. A strong serial priority rule is a natural extension of a dictatorial rule (from the social choice model) and a serial priority rule (from the house allocation model). Our result thus provides a bridge between the characterisations in Gibbard (1973, \Manipulation of voting schemes: A general result", Econometrica, 41, 587-601), Satterthwaite (1975,Strategy-proofness and Arrow's Conditions: Existence and correspondence theorems for voting procedures and social welfare functions", Journal of Economic Theory, 10,187-216) and Svensson (1999, \Strategy-proof allocation of indivisible goods", Social Choice and Welfare, 16, 557-567).
    JEL: C78 D71
    Date: 2017–10
  7. By: Felgendreher, Simon (Department of Economics, School of Business, Economics and Law, Göteborg University); Hennlock, Magnus (olicy and Economy, IVL Swedish Environmental Research Institute); Löfgren, Åsa (Department of Economics, School of Business, Economics and Law, Göteborg University); Wollbrant, Conny (Department of Economics, University of Stirling)
    Abstract: We study experimentally how investment decisions are affected by equally stringent but different policy regime treatments and how differences depend on whether decisions are made individually or in groups. In our experiment, subjects decide on an investment level either individually or jointly in groups of three. In addition, decisions are made subject to either a tax or performance standard treatment. We find that investments are significantly higher and closer to the level that maximizes revenues of the hypothetical firm in the performance standard treatment. This holds for both individual and group decisions, but we find no evidence of an interaction effect. Even though groups seem to have a knowledge advantage, they are not able to benefit from it, since intragroup communication is not able to transmit the microeconomic reasoning to group members without such knowledge. Also, groups are not able to attenuate the attention bias of focusing on selective information depending on the specific policy treatment.
    Keywords: group behavior; investment inefficiencies; policy instruments
    JEL: C92 D70 H32
    Date: 2018–01
  8. By: Mai, Joseph; Stoyanov, Andrey
    Abstract: This paper develops a model of endogenous trade policy formation to study the impact of free trade agreements (FTA) on external trade policies of member states when they internalize the intra-bloc welfare effects. This model is empirically tested using global trade data covering 170 countries and 177 FTAs established between 1988 and 2011. We find empirical evidence of tariff cooperation between members of FTAs. Using three different measures of political relations (the affinity scores from the UN General Assembly Voting Data, dyad alliances data, and bilateral events and interactions data), we show that members with good political relations cooperate more on external tariff policy after formation of FTAs. On average, an increase in the market share of FTA partners' firms by one standard deviation is associated with about 3 percentage points increase in external tariffs.
    Keywords: Free trade agreements, cooperative trade policies, import tariffs
    JEL: F13 F14 F15
    Date: 2018–02–06
  9. By: Alexander Hijzen; Pedro S. Martins; Jante Parlevliet
    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 labor 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 labor 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 labor 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: Labor markets;Wage bargaining;Wage adjustments;Employment;Netherlands;Portugal;Industrial relations, social dialogue, General, Comparative Studies of Particular Economies
    Date: 2017–12–14
  10. By: Olga Orlanski (CESifo); Günther G. Schulze (Department of International Economic Policy, University of Freiburg)
    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: 2018–01
  11. By: Nehring, Klaus; Pivato, Marcus
    Abstract: A judgement aggregation rule takes the views of a collection of voters over a set of interconected issues, and yields a logically consistent collective view. The median rule is a judgement aggregation rule that selects the logically consistent view which minimizes the average distance to the views of the voters (where the “distance” between two views is the number of issues on which they disagree). In the special case of preference aggregation, this is called the Kemeny rule. We show that, under appropriate regularity conditions, the median rule is the unique judgement aggregation rule which satisfies three axioms: Ensemble Supermajority Efficiency, Reinforcement, and Continuity. Our analysis covers aggregation problems in which different issues have different weights, and in which the consistency restrictions on input and output judgments may differ.
    Keywords: Judgement aggregation; majoritarian; reinforcement; consistency; median.
    JEL: D71
    Date: 2018–01–30
  12. By: Bernd (B.) Heidergott (VU Amsterdam, The Netherlands); Jia-Ping Huang (Shenzhen University, China); Ines (I.) Lindner (VU Amsterdam, The Netherlands)
    Abstract: We study social learning in a social network setting where agents receive independent noisy signals about the truth. Agents naïvely update beliefs by repeatedly taking weighted averages of neighbors' opinions. The weights are fixed in the sense of representing average frequency and intensity of social interaction. However, the way people communicate is random such that agents do not update their belief in exactly the same way at every point in time. We show that even if the social network does not privilege any agent in terms of influence, a large society almost always fails to converge to the truth. We conclude that wisdom of crowds is an illusive concept and bares the danger of mistaking consensus for truth.
    Keywords: Wisdom of crowds; social networks; information cascades; naive learning
    JEL: D83 D85 C63
    Date: 2018–02–28
  13. By: Lin, Yu-Hsuan
    Abstract: This chapter examines the impact of inequality-averse attitudes on the individual incentives of participating in international environmental agreements by a laboratory experiment. The experimental result shows that the inequality-averse attitudes have significantly positive impact on the incentives of participation. Particularly, when they are non-critical players, egalitarians are likely to give up the free riding benefit by joining a coalition. It helps us to understand the coalition formation in the international conventions.
    Keywords: Social preference, experimental design, international environmental agreement, inequality aversion, heterogeneous countries
    JEL: C91 D71 Q01 Q54 Q58
    Date: 2017–01
  14. By: Colignatus, Thomas
    Abstract: Votes and seats satisfy only two of seven criteria for application of the Aitchison distance. Vectors of votes and seats, say for elections for political parties the House of Representatives, can be normalised to 1 or 100%, and then have the outward appearance of compositional data. The Aitchison geometry and distance for compositional data then might be considered for votes and seats too. However, there is an essential zero when a party gets votes but doesn't gain a seat, and a zero gives an undefined logratio. In geology, changing from weights to volumes affects the percentages but not the Aitchison distance. For votes and seats there are no different scales or densities per party component however, and thus reportioning (perturbation) would be improper. Another key issue is subcompositional dominance. For votes {10, 20, 70} and seats {20, 10, 70} it is essential that we consider three parties. For a disproportionality measure we would value it positively that there is a match on 70. The Aitchison distance looks at the ratio {10, 20, 70} / {20, 10, 70} = {1/2, 2, 1} and then neglects a ratio equal to 1. In this case it essentially compares the subcompositions, i.e. votes {10, 20} and seats {20, 10}, rescales to {1/3, 2/3} and {2/3, 1/3}, and finds high disproportionality. This means that it essentially looks at a two party outcome instead of a three party outcome. It follows that votes and seats are better served by another distance measure. Suggested is the angular distance and the Sine-Diagonal Inequality / Disproportionality (SDID) measure based upon this. Users may of course apply both the angular and the Aitchison measures while being aware of the crucial differences in properties.
    Keywords: Votes, Seats, Electoral System, Distance, Disproportionality, Aitchison Geometry, Angular Distance, Sine-Diagonal Inequality / Disproportionality, Loosemore-Hanby, Gallagher, Descriptive Statistics, Education, Reportion
    JEL: A10 D63 D71 D72
    Date: 2018–01–18
  15. By: Masami Imai; Cameron Shelton; Rosa Hayes
    Abstract: This paper exploits the international transmission of business cycles to examine the prevalence of attribution error in economic voting in a large panel of countries from 1990-2009. We find that voters, on average, exhibit a strong tendency to oust incumbent governments during an economic downturn, regardless of whether the recession is home-grown or merely imported from trading partners. However, we find important heterogeneity in the extent of attribution error. A split sample analysis shows that countries with more experienced voters, more educated voters, and possibly more informed voters。ェall conditions which have been shown to mitigate other voter agency problems。ェdo better in distinguishing imported from domestic growth.
  16. By: Amélie Thery; Michel Verstraeten
    Abstract: This paper aims at understanding how interactions are connected with instrumental and social satisfaction, and perceived task and relationship conflict. Participants were 264 students divided into 41 teams and involved in a design and building group experiment which was videotaped and integrally coded with the IT3D coding system. We highlight the significant positive relationship between socialization interactions and satisfaction. We notice that when interactions carrying task conflict (content) are increasing, instrumental and social satisfactions are lower. In contrast, process conflict and relationship conflict show no relationship with team member satisfaction. We also investigate the relationship between observed conflictual interactions in groups and the perception of conflict by their members. Only the perception of task conflict is related to the proportion of observed interactions opposing ideas in the group, whereas interactions showing signs of weak relationship conflict are not globally perceived as such. Finally, the study of team member satisfaction and perception of conflict confirms that perceived task conflict is harmful to instrumental and social satisfaction, whereas perceived relationship conflict also impacts negatively social satisfaction.
    Keywords: group dynamics; interactions; team member satisfaction; perceived conflict; contributions balance; team meetings
    JEL: D23 D74 D79 D83
    Date: 2018–02–26
  17. By: Ghidoni, Riccardo (Tilburg University, Center For Economic Research); Cleave, Blair (Tilburg University, Center For Economic Research); Suetens, Sigrid (Tilburg University, Center For Economic Research)
    Abstract: This paper focuses on social dilemma games where players may or may not meet the same partner again in the future. In line with the notion that contagion of cooperation is more likely the higher the likelihood of being re-matched with the same partner in the future, both a novel experiment and a meta-study document higher cooperation rates if this likelihoodis sufficiently high.
    Keywords: cooperation; contagion; matching protocol; laboratory experiment; meta-study
    JEL: C70 C90 D70
    Date: 2018
  18. By: Silvia Lübbecke (University of Paderborn)
    Abstract: Several experiments provide evidence for discriminating behavior towards the out-group—even in settings where group division is arbitrary. This paper studies whether discriminatory behavior can be traced back to subjects holding discriminating beliefs. An experiment is presented where subjects are randomly assigned to minimal groups. First, subjects are asked to draw a marble in private and report whether it is white or speckled. Second, their beliefs are elicited about how many of the others in the respective group have reported the payoff-maximizing speckled marble. Data show that subjects expect others to behave dishonestly in general, but do not differ in their beliefs about the behavior of in- and out-group members. Further, the results indicate that subjects’ beliefs about others’ honesty are positively correlated with the individual lying behavior. Subjects who report the profit-maximizing type also believe in significantly more payoff-maximizing reports by others compared to those subjects who report the unfavorable outcome.
    Keywords: Group identity, Minimal groups, Intergroup discrimination, Incentivized belief elicitation, Experimental economics
    JEL: C91 D01 D82 D83 D91 Z13
    Date: 2018–02
  19. By: Pietro Battiston (University of Milan-Bicocca); Simona Gamba (University of Verona); Matteo Rizzolli (LUMSA University); Valentina Rotondi (Bocconi University)
    Abstract: Do people cheat more if it helps their team? Does this behavior change when their actions are disclosed to their peers? To answer these questions, we run a lab-in-the-field experiment with girl scouts and boy scouts during their summer camps. Scout troops are organized in patrols: these are thus naturally occurring and persistent teams, which undertake many different activities and own common goods; moreover, loyalty is salient. We implement a variation of a standard cheating task, in which cheating behavior by an individual scout could i) either be kept private or disclosed to other members of their patrol; and ii) imply the release of an individual voucher to be spent on individual goods or a team voucher to be spent on collective goods for the patrol. While we find a very low overall level of cheating, our results show that people cheat more frequently when their decision is disclosed to their team and not kept private. On the other hand, no significant difference is observed when cheating rewards the team rather than the individual.
    Keywords: Lying; deception; cheating; public scrutiny; social image; adolescents; children; scouts; loyalty; experiments; behavioral economics
    JEL: C90 D91
    Date: 2018–02
  20. By: Apolte, Thomas
    Abstract: This paper aims at contributing to a better understanding of the conditions of self-enforcing democracy by analyzing the recent wave of autocratic transitions. Based on a game-theoretic framework, we work out the conditions under which governments may induce the diverse public authorities to coordinate on extra-constitutional activities, eventually transforming the politico-institutional setting into one of autocratic rule. We find three empirically testable characteristics that promote this coordination process, namely: populism and public support, corruption, and a lack in the separation of powers. By contrast, low degrees of corruption and strongly separated powers can be viewed as prerequisites to self-enforcing democracy.
    JEL: D02 D72 D74 P48
    Date: 2018

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