nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2018‒04‒16
fifteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Group Size Effect and Over-Punishment in the Case of Third Party Enforcement of Social Norms By Kamei, Kenju
  2. The role of local voting rights for foreign citizens – a catalyst for integration? By Engdahl, Mattias; Lindgren, Karl-Oskar; Rosenqvist, Olof
  3. Interacting collective action problems in the commons By Nicolas Querou
  4. A Swing-State Theorem, with Evidence By Xiangjun Ma; John McLaren
  5. Minority Groups and Success in Election Primaries By Epstein, Gil S.; Heizler (Cohen), Odelia
  6. A Theory of Small Campaign Contributions By Laurent Bouton; Micael Castanheira; Allan Drazen
  7. Immigration and Electoral Support for the Far-Left and the Far-Right By Anthony Edo; Yvonne Giesing; Jonathan Öztunc; Panu Poutvaara
  8. Stochastic Petropolitics: The Dynamics of Institutions in Resource-Dependent Economies By Raouf Boucekkine; Fabien Prieur; Chrysovalantis Vasilakis; Benteng Zou
  9. Peculiarities of cyber security management in the process of internet voting implementation By Tadas Limba; Konstantin Agafonov; Linas Paukštė; Martynas Damkus; Tomas Plėta
  10. Debt in Political Campaigns By Ovtchinnikov, Alexei V.; Valta, Philip
  11. The Survival and Demise of the State: A Dynamic Theory of Secession By Joan-Maria Esteban; Sabine Flamand; Massimo Morelli; Dominic Rohner
  12. Preference Driven Intra-household Conflict and Commitment Savings Strategies By Pavel Luengas-Sierra
  13. Collaboration Networks and Innovation: How to Define Network Boundaries By Galaso, Pablo; Kovářík, Jaromír
  14. Impact of governing modes on agrarian sustainability in Bulgaria By Bachev, Hrabrin
  15. An Econometric Model of Network Formation with an Application to Board Interlocks between Firms By Gualdani, Cristina

  1. By: Kamei, Kenju
    Abstract: One of the important topics in public choice is how people’s free-riding behavior could differ by group size in collective action dilemmas. This paper experimentally studies how the strength of third party punishment in a prisoner’s dilemma could differ by the number of third parties in a group. Our data indicate that as the number of third party punishers increases in a group, the average punishment intensity per third party punisher decreases. However, the decrease rate is very mild and therefore the size of total punishment in a group substantially increases with an increase in group size. As a result, third party punishment becomes a sufficient deterrent against a player selecting defection in the prisoner’s dilemma when the number of third party punishers is sufficiently large. Nevertheless, when there are too many third party punishers in a group, a defector’s expected payoff is far lower than that of a cooperator due to strong aggregate punishment, while some cooperators are even hurt through punishment. Therefore, the group incurs a huge efficiency loss. Such over-punishment results from third party punishers’ conditional punishment behaviors: their punishment intensity is positively correlated with their beliefs on the peers’ punitive actions. Some possible ways to coordinate punishment among peers even when group size is very large, thus enabling the efficiency loss to be mitigated, are also discussed in the paper.
    Keywords: experiment, cooperation, third party punishment, dilemma, group size effect
    JEL: C92 D72 H41
    Date: 2018–02–17
  2. By: Engdahl, Mattias (IFAU - Institute for Evaluation of Labour Market and Education Policy); Lindgren, Karl-Oskar (IFAU - Institute for Evaluation of Labour Market and Education Policy); Rosenqvist, Olof (IFAU - Institute for Evaluation of Labour Market and Education Policy)
    Abstract: We study the short- and long-term impact of local enfranchisement of foreign citizens born outside the EU on political integration outcomes. Local voting rights for foreigners were introduced in the Swedish electoral system in 1976. This right to vote is conditional on having spent at least three years in Sweden prior to the election. Until 1998 Swedish elections at all levels were held every three years; since then they have been held every four years. The wait time before the first opportunity to vote thus differs substantially for immigrants immigrating just before this cutoff date versus just after. Our analysis shows that immigrants whose timing of arrival makes them eligible to vote after slightly more than three years in the country are not more likely to naturalize or vote in later elections compared to immigrants whose timing of arrival means they must wait six or seven years to vote. The results suggest that earlier opportunities for political participation do not improve subsequent political integration of immigrants as measured by naturalization and voting.
    Keywords: Local election; voting rights; noncitizens; integration; naturalization; turnout;
    JEL: D02 D72 J15
    Date: 2018–04–06
  3. By: Nicolas Querou
    Abstract: We consider a setting where agents are subject to two types of collective action problems, any group user’s individual extraction inducing an externality on others in the same group (intra-group problem), while aggregate extraction in one group induces an externality on each agent in other groups (intergroup problem). One illustrative example of such a setting corresponds to a case where a common-pool resource is jointly extracted in local areas, which are managed by separate groups of individuals extracting the resource in their respective location. The interplay between both types of externality is shown to affect the results obtained in classical models of common-pool resources. We show how the fundamentals affect the individual strategies and welfare compared to the benchmark commons problems. Finally, different initiatives (local cooperation, inter-area agreements) are analyzed to assess whether they may alleviate the problems, and to understand the conditions under which they do so
    Date: 2018–02
  4. By: Xiangjun Ma; John McLaren
    Abstract: We study the effects of local partisanship in a model of electoral competition. Voters care about policy, but they also care about the identity of the party in power. These party preferences vary from person to person, but they are also correlated within each state. As a result, most states are biased toward one party or the other (in popular parlance, most states are either ‘red’ or ‘blue’). We show that, under a large portion of the parameter space, electoral competition leads to maximization of welfare with an extra weight on citizens of the ‘swing state:’ the one that is not biased toward either party. The theory applies to all areas of policy, but since import tariffs are well-measured they allow a clean test. We show empirically that the US tariff structure is systematically biased toward industries located in swing states, after controlling for other factors. Our best estimate is that the US political process treats a voter living in a non-swing state as being worth 77% as much as a voter in a swing state. This represents a policy bias orders of magnitude greater than the bias found in studies of protection for sale.
    JEL: D72 F13
    Date: 2018–03
  5. By: Epstein, Gil S. (Bar-Ilan University); Heizler (Cohen), Odelia (Academic College of Tel-Aviv Yaffo)
    Abstract: In this paper, we focus on the effect of belonging to one or more minority groups on the probability of success in primary elections. Using a unique dataset of candidates in Israeli primaries, we find that while being a new immigrant, a woman or a Muslim decreases the chances of electoral success, candidates who belong to two minority groups have an advantage in the race. In some cases of candidates belonging to two minority groups, their chances of success are not only higher than for a candidate from one minority group, but also than for a candidate from the majority.
    Keywords: primary elections, success, minority groups, majority groups
    JEL: J15 D72
    Date: 2018–02
  6. By: Laurent Bouton; Micael Castanheira; Allan Drazen
    Abstract: We present a model of electorally-motivated, small campaign contributions. The analysis uncovers interesting interactions among small donors and has novel implications for the effect of income inequality on total contributions and election outcomes. Moreover, it helps explain a number of empirical observations that seem anomalous when contributions are driven by the consumption or the influence motives. We also study the impact of different forms of campaign finance laws on contribution behavior, probabilities of electoral outcomes, and welfare. Our results are consistent with more behaviorally motivated donors when contributions are driven by the parties' strategic solicitation of funds. We also indicate how the model and its results may have important implications for empirical work on campaign contributions.
    JEL: D72
    Date: 2018–03
  7. By: Anthony Edo; Yvonne Giesing; Jonathan Öztunc; Panu Poutvaara
    Abstract: Immigration has become one of the most divisive political issues in the United States, the United Kingdom, France and several other Western countries. We estimate the impact of immigration on voting for far-left and far-right candidates in France, using panel data on presidential elections from 1988 to 2017. To derive causal estimates, we instrument more recent immigration flows by past settlement patterns in 1968. We find that immigration increases support for far-right candidates and has no robust effect on far-left voting. The increased support for far-right candidates is driven by low educated immigrants from non-Western countries.
    Keywords: voting, immigration, political economy
    JEL: D72 F22 J15 P16
    Date: 2017
  8. By: Raouf Boucekkine (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE; Iméra; and Institut Universitaire de France); Fabien Prieur (EconomiX, University Paris Nanterre); Chrysovalantis Vasilakis (University of Bangor and IRES, Universite Catholique de Louvain); Benteng Zou (CREA, University of Luxembourg)
    Abstract: We provide an analysis of institutional dynamics under uncertainty by means of a stochastic differential game of lobbying with two players (conservatives vs liberals) and three main ingredients. The first one is uncertainty inherent in the institutional process itself. The second considers resource windfalls volatility impact on economic and institutional outcomes. Last but not least, the resource windfall level matters in the relative bargaining power of the players. We compute a unique closed-loop equilibrium with linear feedbacks. We show that the legislative state converges to an invariant distribution. Even more importantly, we demonstrate that the most likely asymptotic legislative state is favorable to the liberals. However, the more volatile resource windfalls, the less liberal is the most likely asymptotic state. Finally, we assess the latter prediction on a database covering 91 countries over the period 1973-2005. We focus on financial liberalization policies. We find that as the resources revenues volatility increases, the financial liberalization index goes down. We also find that this property remains robust across different specifications and sample distinctions.
    Keywords: institutional dynamics, petropolitics, lobbying games, revenue-dependent lobbying power, stochastic dynamic games, stochastic stability
    JEL: D72 C73 Q32
    Date: 2018–04
  9. By: Tadas Limba (Mykolas Romeris University); Konstantin Agafonov (Mykolas Romeris University); Linas Paukštė (Cognit consult JSC); Martynas Damkus (Mykolas Romeris University); Tomas Plėta (NATO Energy Security Center of Excellence)
    Abstract: The modern world could not be imagined without the information and communications technology. Today's society, its life and social relations are deeply influenced by the virtual space, and that stands as a reason why the world's Information Technology specialists and representatives of various branches of science have been focusing on solving the problems in the sphere of cyber security. Software and technological solutions used in reorganization of the activity of private sector nowadays are widely used in the public sector as well. By using technologies, countries put their effort into involving their citizens into the process of governance and direct participation in various political processes inside the state itself, and one of the most widespread tools to motivate the citizen-to-state political participation and resident's direct interaction in political processes is internet voting. Authors of scientific literature investigate how cybersecurity management is being comprehended and analyzed in technological, legal, management, economical, human resource management and other aspects; how cyber security is analyzed in the context of services provided by institutions of public administration; which means of cyber security management are essential, in order to speed up the processes of establishing e-voting systems. In this article the authors investigate the theoretical aspects of cyber security management in internet voting, analyze the global experience in the sphere of cyber security management implementation with the help of already established e-voting systems, evaluate the properties of cyber security management in the process of implementation of internet voting in Lithuania, as well as present audience with an in-depth analysis of the opinion of the local population, cyber security and voting system specialists, concerning the matters and possibilities of establishing internet voting in Lithuania. The authors also propose a cyber security management model, which could be used in the process of implementation (both preparation and establishment) of the internet voting system in Lithuania.
    Keywords: cyber security model,cyber security management,cyber security,e-voting,internet voting
    Date: 2017–12–29
  10. By: Ovtchinnikov, Alexei V.; Valta, Philip
    Abstract: Debt is a significant source of funding of political campaigns, with almost half of all campaigns relying on some form of debt. We analyze the incentives created by this type of debt financing. We show that indebted politicians raise more funds in subsequent elections, especially from special interest groups. Consistent with votes-for-money arrangements, indebted politicians vote for the benefit of those interest groups that help funding their reelection campaigns. The findings support the hypothesis that debt creates distortions, as it forces indebted politicians to take policy positions that are not aligned with the local constituents’ interests.
    Keywords: Debt financing; Political campaigns; Voting behavior
    JEL: D72 G32 G38 L51
    Date: 2018–07–01
  11. By: Joan-Maria Esteban; Sabine Flamand; Massimo Morelli; Dominic Rohner
    Abstract: This paper analizes the repeated interaction between groups in a country as a repeated Stackelberg game, where conflict and secession can occur on the equilibrium path owing to commitment problems. If a group out of power is small enough and its contribution to total surplus not too large, then the group in power can always maintain peace with an acceptable offer of surplus sharing for every period. When there is a mismatch between the relative size and the relative surplus contribution of the minority group, conflict can occur. While in the static model secession can occur only as a peaceful outcome, in the infinite horizon game with high discount factor secession may result following costly conflict. We discuss our full characterization of equilibrium outcomes in the light of the available empirical evidence.
    Keywords: secessions, conflict, repeated Stackelberg game
    JEL: C7 D74
    Date: 2018–03
  12. By: Pavel Luengas-Sierra
    Abstract: I analyze whether intra-household conflict induces females to use commitment savings strategies. A model of participation in Rotating Savings and Credit Associations, an informal commitment savings strategy, predicts females with mid-bargaining power levels will participate to protect their savings from partner’s claims. In the model, preference heterogeneity for an indivisible good drives conflict and the couple’s decision making is efficient by following the collective framework. I use the 2005 and 2009 waves of a nationally representative panel survey from Mexico to test the model. I exploit the difference-indifference effect the 2007 Great Recession had on couples in which females but not males worked in manufactures prior the shock. It instruments a labor-earnings based female bargaining power measure. I find in instrumented first-differences estimations that, compared to other females in couple, females with mid-bargaining power levels are more likely to participate. Results are robust to accounting for couple’s heterogeneity in discount factors as additional conflict source. But when females are either more or less patient than their partner, female participation doubles. Results are robust to whether female’s partners participate. But when they do, female participation increases fourfold. Results hold for old couples, those that had been together longer, but not for young couples; suggesting old but not young couples reach efficient allocations.
    Date: 2018
  13. By: Galaso, Pablo; Kovářík, Jaromír
    Abstract: Numerous studies in management, sociology, and economics have documented that the architecture of collaboration networks affects the innovation performance of individuals, firms, and regions. Little is known though about whether the association between collaboration patterns and innovation outcomes depends on the network geographical boundaries chosen by the researcher. This issue is crucial for both policy-makers and firms that rely on innovation. This article compares the association between collaboration networks and future patenting between regional and country-level collaboration networks. If we relate future innovation to the global, country-wide network our statistical analysis reproduces the findings of the previous literature. However, we find systematically less important effects of regional innovation patterns on subsequent patenting of innovators. Hence, managers and policy makers should choose the boundaries of the innovation networks that they look at carefully, aiming for integration into larger-scale collaboration communities.
    Keywords: innovation, networks, patents, network boundary, boundary specification problem
    JEL: O31 O32 O34 R11
    Date: 2018–03–08
  14. By: Bachev, Hrabrin
    Abstract: The specific system of governance in different countries, regions, subsectors, etc., eventually determines the speed and type of socio-economic development. Despite its big academic and practical importance, in Bulgaria and other countries in East Europe, there are very few empirical studies on dominating governing structures in agriculture, and their impact(s) on agrarian sustainability. In this paper the interdisciplinary New Institutional Economics framework is incorporated, and the impact of diverse market, private, collective, public and hybrid modes of governance on agrarian sustainability at the current stage of development in Bulgaria assessed. First, the methodological framework of the study is outlined. After that dominating governing modes in Bulgarian farms of different juridical type, size, specialization, ecological and geographical location are identified, and their impacts on agrarian sustainability and its economic, social, and environmental pillars evaluated. In conclusion implications for further research, public policy improvement, and private managerial strategy formation are presented. Agricultural producers of different use quite unlike mixture of effective market, private, collective and hybrid modes for governance of their activities and relations. Individual factors and modes most contributing to improvement of agrarian sustainability at the current stage of development are: manager’s personal convictions and initiatives, farms resources and innovation potential, near future profit and benefits strategies, market prices levels and dynamics, area-based EU subsidies, and informal agreements. Research on relations between the governing structure and agrarian sustainability is to continue though increasing representation, and the spectrum of specific governing modes used by farms of different type as well as assessments of the impact of institutions on agrarian sustainability and the impact of the governance at different hierarchical levels. The latter however, requires a new kind of micro and macro data, and a close cooperation between all interested parties.
    Keywords: Agrarian Governance, Sustainability, Market, Private, Collective, Hybrid modes, Bulgaria
    JEL: D22 D23 D4 K0 Q12 Q13 Q14 Q15 Q18 Q5
    Date: 2018–03
  15. By: Gualdani, Cristina
    Abstract: The paper provides a framework for partially identifying the parameters governing agents’ preferences in a static game of network formation with interdependent link decisions, complete information, and transferable or non-transferable payoffs. The proposed methodology attenuates the computational difficulties arising at the inference stage - due to the huge number of moment inequalities characterising the sharp identified set and the impossibility of brute-force calculating the integrals entering them - by decomposing the network formation game into local games which have a structure similar to entry games and are such that the network formation game is in equilibrium if and only if each local game is in equilibrium. As an empirical illustration of the developed procedure, the paper estimates firms’ incentives for having executives sitting on the board of competitors, using Italian data.
    Keywords: network formation; pure strategy Nash equilibrium; pairwise stability; multiple equilibria; partial identification; moment inequalities; local games; board interlocks
    JEL: C1 C62
    Date: 2018–03

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