nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2018‒03‒26
thirteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Guns, Environment, and Abortion: How Single-Minded Voters Shape Politicians’ Decisions* By Laurent Bouton; Paola Conconi; Francisco Pino; Maurizio Zanardi
  2. Implementation by vote-buying mechanisms By Jon X. Eguia; Dimitrios Xefteris
  3. Foreign Language Teaching as an Intercultural Coaching: a Self-developmental Tool for High Level Intercultural Intelligence By Reny Radkova
  4. On the Political Economy of Income Taxation By Berliant, Marcus; Gouveia, Miguel
  5. A Model of Ideological Thinking By Le Yaouanq, Yves
  6. The Political Economy of Collective Memories: Evidence from Russian Politics By Alessandro Belmonte; Michael Rochlitz
  7. Revisiting yardstick competition and spillover effects in in the new era of spatial econometrics: evidence from Italian cities By Massimiliano Ferraresi
  8. Denial and Alarmism in Collective Action Problems By Manuel Foerster; Joel (J.J.) van der Weele
  9. Crowdfunding with overenthusiastic investors : a global game model By Damien Besancenot; Radu Vranceanu
  10. Discrimination and favouritism among workers: union membership and ethnic identity By Chiara Ravetti; Mare Sarr; Tim Swanson; Daniel Munene
  11. Kinship Systems, Cooperation, and the Evolution of Culture By Benjamin Enke
  12. Coming to Terms with the Authoritarian Alternative: The Implications and Motivations of China's Environmental Policies By Mark Beeson
  13. The Economic Roots of the Rise of Trumpism By John Komlos

  1. By: Laurent Bouton; Paola Conconi; Francisco Pino; Maurizio Zanardi
    Abstract: We study how electoral incentives a.ect policy choices on secondary issues, which only minorities of voters care intensely about. We develop a model in which o.ce and policy motivated politicians choose to support or oppose regulations on these issues. We derive conditions under which politicians .ip-.op, voting according to their policy preferences at the beginning of their terms, but in line with the preferences of single-issue minorities as they approach re-election. To assess the evidence, we study U.S. senators’ votes on gun control, environment, and reproductive rights. In line with our model’s predictions, election proximity has a pro-gun e.ect on Democratic senators and a pro-environment e.ect on Republican senators. These e.ects only arise for non-retiring senators, who represent states where the single-issue minority is of intermediate size. Also in line with our theory, election proximity has no impact on senators’ decisions on reproductive rights, because of the presence of single-issue minorities on both sides.
    Keywords: Electoral Incentives, Environnent, Gun Control, Reproductive Rights
    Date: 2018–03
  2. By: Jon X. Eguia; Dimitrios Xefteris
    Abstract: A vote-buying mechanism is such that each agent buys a quantity of votes x to cast for an alternative of her choosing, at a cost c(x), and the outcome is determined by the total number of votes cast for each alternative. In the context of binary decisions, we prove that the choice rules that can be implemented by vote-buying mechanisms in large societies are parameterized by a positive parameter rho, which measures the importance of individual preference intensities on the social choice: The limit with rho= 0 is majority rule, rho = 1 is utilitarianism, and rho?8 is the Rawlsian maximin rule. We show that any vote-buying mechanism with limit cost elasticity (1 rho)/rho as x?0 implements the choice rule defined by rho. The utilitarian efficiency of quadratic voting (Lalley and Weyl, 2016) follows as a special case.
    Keywords: implementation; mechanism design; vote-buying; social welfare; utilitarianism; quadratic voting
    JEL: D72 D71 D61
    Date: 2018–03
  3. By: Reny Radkova (St. Kliment Ohridski University of Sofia)
    Abstract: The goal of this paper is to bring some insights and practical information to the intercultural and foreign teaching community on how coaching foreign language is a perfect combination of intercultural and linguistics training. The purpose of the scientific study is to examine this process in detail and to form a cultural understanding with mutual tolerance towards otherness, as well as to present a comparative study of both cultures in a specific cultural context. The progress of scientific research on the topic that helps analyze intercultural communicative competence and applied linguistics training is vital to understanding and developing an intercultural approach. It should accompany not only contemporary foreign language training, but also comprehensive training due to migration, emigration, and globalization processes. Teaching and obtaining cross-cultural awareness provides a journey of increasing self-knowledge as the first step to being open to further knowledge and understanding of others. Both intercultural trainers and foreign language teachers should have to be multilingual and very well prepared linguists. They should have been working or studied both in the field of Psychology and Intercultural Communication. The study focuses on the problems and opportunities for training in intercultural communication. The study was conducted among Bulgarian and American Fulbright community, part of it investigating multicultural classrooms and university auditoriums and extracurricular activities. The intercultural context in which foreign language learning takes place is an aspect through which both children, students and adults find themselves able to acquire a sense of their own and of different cultures, to communicate in the new situation, and to create a suitable "new" cultural environment by coming in contact with another culture. The presented survey related to Fulbright students and teachers aims to help with English language teaching by analyzing the process itself. The future belongs to multicultural organizations and societies. The way traditional organizations are structured hierarchically is no longer adequate for the challenges that the globalised economical society with its increasing pace places. Multicultural leaderships and teams, situational and contextual decision making by them as members of the multicultural community and consistent innovation developing through qualified peer-feedback are going to be key to a successful world economy in the upcoming decades.
    Keywords: cross-cultural awareness, intercultural trainers, foreign language teachers
    JEL: Y40
    Date: 2017–10
  4. By: Berliant, Marcus; Gouveia, Miguel
    Abstract: The literatures dealing with voting, optimal income taxation, and implementation are integrated here to address the problem of voting over income taxes. In contrast with previous articles, general nonlinear income taxes that affect the labor-leisure decisions of consumers who work and vote are allowed. Uncertainty plays an important role in that the government does not know the true realizations of the abilities of consumers drawn from a known distribution, but must meet the realization-dependent budget. Even though the space of alternatives is infinite dimensional, conditions on tax requirements such that a majority rule equilibrium exists are found. Finally, conditions are found to assure existence of a majority rule equilibrium when agents vote over both a public good and income taxes to finance it.
    Keywords: Voting; Income taxation; Public good
    JEL: D72 D82 H21 H41
    Date: 2018–02–07
  5. By: Le Yaouanq, Yves (LMU)
    Abstract: This paper develops a theory in which heterogeneity in political preferences produces a partisan disagreement about objective facts. A political decision involving both idiosyncratic preferences and scientific knowledge is considered. Voters form motivated beliefs in order to improve their subjective anticipation of the future political outcome. In equilibrium, they tend to deny the scientific arguments advocating the political orientations that run counter to their interests. Collective denial is the strongest in societies where contingent policy is the least likely to be implemented, either because of voters\' intrinsic preferences or because of rigidities in the political process. The theory predicts that providing mixed evidence produces a temporary polarization of beliefs, but that disclosing unequivocal information eliminates the disagreement.
    Keywords: beliefs; ideology; cognition; disagreement; polarization;
    JEL: D72 D81 D83 D84 Z13
    Date: 2018–03–19
  6. By: Alessandro Belmonte (IMT Institute for Advanced Studies); Michael Rochlitz (National Research University Higher School of Economics)
    Abstract: How do political elites exploit salient historical events to reactivate collective memories and entrench their power? We study this question using data from the Russian Federation under Putin. We document a substantial recollection campaign of the traumatic transition the Russian population experienced during the 1990s, starting with the year 2003. We combine this time discontinuity in the recollection of negative collective memories with regional-level information about traumatic experiences of the 1990s. Our results show that Russians vote more for the government, and less for the liberal political opposition, in regions that suffered more during the transition period, once memories from the period are recalled on state-controlled media. We then provide additional evidence on the mechanism and nd, using a text analysis of local newspapers, that in those regions where local newspapers more intensively recall the chaotic 1990s, electoral support for the government is higher. Finally, we show that in regions in which the media is less independent from the state, this recollection campaign is more effective.
    Keywords: collective memory, recollection of the past, voting, Russia.
    JEL: D74 D83 P16 Z13
    Date: 2018
  7. By: Massimiliano Ferraresi (European Commission, Directorate I)
    Abstract: This paper exploits political features of Italian local governments to identify the presence of spatial interactions in spending decisions over the period 2001-2011. In particular, I take advantage of the political cycle to isolate the effect of spending decisions of one municipality on neighbors’ municipalities. The results of this analysis point to the presence of strategic interaction between neighboring municipalities, and indicate that such a fiscal behavior is more pronounced during electoral years, that is municipalities are engaged in yardstick competition. Moreover, to isolate any other source of spatial interactions from yardstick competition, I rely on a sample of municipalities experiencing a council dismissal, for which the political process is expected to be less marked - as they are led by a commissioner, who does not have any political concern. In this case, I build a measure of intensity of commissioner to induce variation in the spending decisions, finding, however, no evidence of spatial dependencies. Taken together these results suggest that the observed spatial dependence in spending decisions is unlikely to be driven by spillover e?ects, rather, it seems to be consent with the yardstick competition hypothesis.
    Keywords: spatial interactions, yardstick competition, spillover, political budget cycle, commissioner, external instruments
    JEL: H20 H71 H77
    Date: 2018–03
  8. By: Manuel Foerster (University of Hamburg); Joel (J.J.) van der Weele (Universiteit van Amsterdam)
    Abstract: We analyze communication about the social returns to investment in a public good. We model two agents who have private information about these returns as well as their own taste for cooperation, or social preferences. Before deciding to contribute or not, each agent submits an unverifiable report about the returns to the other agent. We show that even if the public good benefits both agents, there are incentives to misrepresent information. First, others’ willingness to cooperate generates an incentive for “alarmism”, the exaggeration of social returns in order to opportunistically induce more investment. Second, if people also want to be perceived as cooperators, a “justification motive” arises for low contributors. As a result, equilibrium communication features “denial” about the returns, depressing contributions. We illustrate the model in the context of institutional inertia and the climate change debate.
    Keywords: cheap talk; cooperation; image concerns; information aggregation; public goods
    JEL: C72 D64 D82 D83 D91
    Date: 2018–03–07
  9. By: Damien Besancenot (LIRAES - EA 4470 - Laboratoire Interdisciplinaire de Recherche Appliquée en Economie de la Santé - UPD5 - Université Paris Descartes - Paris 5); Radu Vranceanu (Essec Business School)
    Abstract: Crowdfunding platforms are providing funds to an increasing number of projects, among which many have a strong social/community impact. Under a all-or-nothing program, the success of the investment depends on the ability of a crowd of potential investors to put their funds into the project without an explicit coordination device. With heterogeneous information, such a problem can be analyzed as a typical global game. We assume that signals of at least some agents present a systematic positive bias, driven by positive emotions about projects with high social/community impact. The analysis reveals that if the number of such overenthusiastic persons is large enough, crowdfunding finance might support financially inefficient projects. We then analyze how a monopolistic platform optimally determines transaction fees and unveil the relationship between overenthusiasm and the profit of the platform.
    Keywords: Crowdfunding,Entrepreneurship,Global games,Overenthusiasm,Behavioral IO
    Date: 2018–02–22
  10. By: Chiara Ravetti; Mare Sarr; Tim Swanson; Daniel Munene
    Abstract: This paper analyses how labour institutions and ethnic identity shape favouritism and discrimination among workers. We conduct an experiment with union and non-union South African mineworkers from various ethnicities. We examine in-group and out-group behaviour, emphasizing the relative ranking of these groups and their interaction. We find that unions create both in-group and out-group favouritism towards co-ethnic members and members of ethnic majorities. This favouritism is however undermined by unionised subcontract workers who experience precarious conditions. Furthermore, union members discriminate against non-unionised ethnic minorities. Finally, non-union members (primarily subcontract workers) discriminate against union members, particularly after negative shocks.
    Keywords: discrimination; labour market segmentation; trade union; ethnicity; dictator game.
    JEL: J42
    Date: 2017–10–18
  11. By: Benjamin Enke
    Abstract: An influential body of psychological and anthropological theories holds that societies exhibit heterogeneous cooperation systems that differ both in their level of in-group favoritism and in the tools that they employ to enforce cooperative behavior. According to some of these theories, entire bundles of functional psychological adaptations – religious beliefs, moral values, negative reciprocity, emotions, and social norms – serve as “psychological police officer” in different cooperation regimes. This paper uses an anthropological measure of the tightness of historical kinship systems to study the structure of cooperation patterns and enforcement devices across historical ethnicities, contemporary countries, ethnicities within countries, and among migrants. The results document that societies with loose ancestral kinship ties cooperate and trust broadly, which appears to be enforced through a belief in moralizing gods, individualizing moral values, internalized guilt, altruistic punishment, and large-scale institutions. Societies with a historically tightly knit kinship structure, on the other hand, cheat on and distrust the out-group but readily support in-group members in need. This cooperation regime in turn is enforced by communal moral values, emotions of external shame, revenge-taking, and local governance structures including strong social norms. These patterns suggest that various seemingly unrelated aspects of culture are all functional and ultimately serve the same purpose of regulating economic behavior.
    Keywords: Kinship, culture, cooperation, enforcement devices
    JEL: D00 O10
    Date: 2018
  12. By: Mark Beeson
    Abstract: China has assumed a crucial importance in debates about climate change mitigation. On the one hand, China is one of the largest emitters of greenhouse gasses and pollution. On the other, it has invested more in renewable energy than any other country and is making real efforts to address the consequences of rapid industrialisation. There are three key questions for students of comparative political economy that emerge from the Chinese experience: first, what is the relationship between economic development and authoritarian rule? Second, what role has China's distinct social and political system played in creating and addressing environmental problems? Third, what domestic and international implications does the ‘China model’ have? In short, will China's authoritarian leaders be able to manage the expectations of its own people and those of the so-called international community? This article considers the often paradoxical and contradictory nature of the authoritarian Chinese government's current environmental policies and suggests that while they may have some success at the domestic level, they may still be an obstacle to international cooperation.
    Keywords: China, environmental policy, authoritarianism, policy implementation
    Date: 2017–12–27
  13. By: John Komlos
    Abstract: Donald Trump won the election in 2016 largely because enough voters in three states, all in the Rustbelt, who had voted for Barack Obama in both 2008 and 2012, switched their vote from Democratic to Republican. Economic dislocations played a crucial role in these swing states or democratic strongholds to persuade many voters to take the dramatic step to vote for an anti-establishment candidate even if that meant a leap of faith into the unknown. The sources of the dislocation were the development of a dual economy characterized at one end by low and stagnating wages, increasing debt, downward social mobility, declining relative incomes, and the hopelessness accompanying them while at the other end of the income distribution the economy was simply booming. This was longer than a three-decade process that started with Reaganomics and its tax cuts that privileged the rich and conferred immense wealth, and its concomitant, political power, on them. Reaganomics also accelerated the decline in the power of unions which had supported the middle class. The process continued under Bill Clinton’s administration and its continuing both financial deregulation and of hyper-globalization. George Bush continued to pamper the superrich with his tax policies. The process culminated with Barack Obama’s bailing out the superrich and his benign neglect of Mainstreet. Five administration’s disinterest in the social group Hillary Clinton referred to flippantly as “the deplorables” culminated in the revolt of the masses in favor of an incompetent strongman by overthrowing the establishment captured by such chants at Trump rallies as “Lock her up!”, “USA!”, “Build the wall”, or “Drain the swamp” (i.e., in Washington D.C.).
    Keywords: political economy of populism
    JEL: A10
    Date: 2018

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