nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2018‒04‒23
eighteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Sunlight Disinfects? Free Media in Weak Democracies By Leopoldo Fergusson; Juan F. Vargas; Mauricio A. Vela
  2. The Strength of Weak Leaders - An Experiment on Social Influence and Social Learning in Teams By Berno Büchel; Stefan Klößner; Martin Lochmüller; Heiko Rauhut
  3. Voting in the Goods and Service Tax Council of India By Bhattacherjee, Sanjay; Sarkar, Palash
  4. Strategic Default in Financial Networks By Nizar Allouch; Maya Jalloul
  5. Designing Feedback in Voluntary Contribution Games - The Role of Transparency By Bernd Irlenbusch; Rainer Michael Rilke; Gari Walkowitz
  6. Stochastic petropolitics: The dynamics of institutions in resource-dependent economies By Raouf Boucekine; Fabien Prieur; Chrysovalantis Vasilakis; Benteng Zou
  7. Positively Responsive Collective Choice Rules and Majority Rule : A Generalization of May’s Theorem to Many Alternatives By Sean HORAN; Martin J. OSBORNE; M. Remzi SANVER
  8. Policy Experimentation, Redistribution and Voting Rules By Anesi, Vincent; Bowen, T. Renee
  9. Guns, Environment, and Abortion: How Single-Minded Voters Shape Politicians' Decisions By Bouton, Laurent; Conconi, Paola; Pino, Francisco; Zanardi, Maurizio
  10. Information Gatekeeping and Media Bias By Hulya Eraslan; Saltuk Ozerturk
  11. “Love Thy Neighbour†? The Effect of Income and Language Differences on Votes for Municipal Secessions By lapointe, Simon
  12. A Variational Approach to Network Games By Emerson Melo
  13. Does equity induce inefficiency? An experiment on coordination By Mamadou Gueye; Nicolas Quérou; Raphael Soubeyran
  14. Trust and Places - Case Interorganizational Product Development Project By Mervi Huhtelin; Suvi Nenonen; Juha-Matti Junnonen; Arja-Liisa Kaasinen; Minna Andersson
  15. The Likelihood of the Consistency of Collective Rankings under Preferences Aggregation with Four Alternatives using Scoring Rules: A General Formula and the Optimal Decision Rule By Eric Kamwa; Vincent Merlin
  16. An Informational Basis for Voting Rules By Alexander V. Karpov
  17. Global Security Governance At Work: The Case of 2008 Russia-Georgia Conflict By Tatyana Rudneva
  18. Perceived success VS real added value in project development. Analysing cognitive content and information modalization in the early phase concept development: A case study of a commercial real estate project in Norway in the 2010s. By Jørgen Skatland; Ole Møystad

  1. By: Leopoldo Fergusson; Juan F. Vargas; Mauricio A. Vela
    Abstract: Free media may not favor political accountability when other democratic institutions are weak and may even bring undesirable unintended consequences. We propose a simple model in which candidates running for office may engage in coercion to obtain votes. A media scandal exposing these candidates entices them to increase their coercion effort to offset the negative shock on their popularity, potentially minimizing or even counteracting the effect of the scandal on their vote share. We provide empirical evidence from one recent episode in the political history of Colombia in which politicians seeking a seat in Congress colluded with illegal armed paramilitary groups to obtain votes, and this collusion was ultimately brought to light by a media scandal. We find that paramilitary-backed candidates exposed before elections get as many votes as those exposed after elections, but their electoral support is more strongly concentrated where coercion is cheaper: in areas with paramilitary presence and weak state capacity. Our results highlight the complementarity between different dimensions of democratic institutions.
    Keywords: Media, Democracy, Elections, Colombia, Civil Conflict, Coercion
    JEL: D72 D74 L82 P16
    Date: 2018–03–29
  2. By: Berno Büchel (University of Fribourg, Economics); Stefan Klößner (Saarland University, Statistics and Econometrics); Martin Lochmüller (Saarland University, Statistics and Econometrics); Heiko Rauhut (University of Zurich, Sociology)
    Abstract: We investigate how the selection process of a leader affects team performance with respect to social learning. We use a lab experiment in which an incentivized guessing task is repeated in a star network with the leader at the center. Leader selection is either based on competence, on self-confidence, or made at random. Teams with random leaders do not underperform compared to competent leaders, and they even outperform teams whose leader is selected based on self-confidence. The reason is that random leaders are better able to use the knowledge within the team. We can show that it is the declaration of the selection procedure which makes non-random leaders overly influential. We set up a horse race between several rational and naïve models of social learning to investigate the micro-level mechanisms. We find that overconfidence and conservatism contribute to the fact that overly influential leaders mislead their team.
    Keywords: Social Networks, Social Influence, Confidence, Overconfidence, Bayesian Updating, Naïve Learning, Sortition, Wisdom of Crowds
    JEL: D83 D85 C91
    Date: 2018–02
  3. By: Bhattacherjee, Sanjay; Sarkar, Palash
    Abstract: In 2017, India enacted a new taxation law called the Goods and Services Tax (GST). This law created a GST Council with representatives of the Union government and the Provincial governments. The decision making procedure in the GST Council is specified to be by weighted voting. This work performs a detailed study of such a mechanism using the framework of formal voting games. On a theoretical note, we introduce several new notions regarding blocking dynamics of voting games. These are then applied to the study of voting in the GST context. We identify a set of basic desiderata and propose some modifications to the voting rule in the GST Act.
    Keywords: Goods and Services Tax (GST); GST Council; Weighted majority voting games; Winning and blocking coalition; Blocking power; Efficiency; Influence
    JEL: C71 D7 D72 D73 G28 H1 H2 H71 H77 Y10 Z18
    Date: 2018–04–16
  4. By: Nizar Allouch (University of Kent); Maya Jalloul (Queen Mary University of London)
    Abstract: This paper investigates a model of strategic interactions in financial networks, where the decision by one agent on whether or not to default impacts the incentives of other agents to escape default. Agents' payoffs are determined by the clearing mechanism introduced in the seminal contribution of Eisenberg and Noe (2001). We first show the existence of a Nash equilibrium of this default game. Next, we develop an algorithm to find all Nash equilibria that relies on the financial network structure. Finally, we explore some policy implications to achieve efficient coordination.
    Keywords: Systemic risk, default, financial networks, coordination games, central clearing, counterparty, financial regulation
    JEL: C72 D53 D85 G21 G28 G33
    Date: 2018–02–06
  5. By: Bernd Irlenbusch; Rainer Michael Rilke; Gari Walkowitz
    Abstract: We analyze the effects of limited feedback on beliefs and contributions in a repeated public goods game setting. In a first experiment, we test whether exogenously determined feedback about a good example (i.e., the maximum contribution in a period) in contrast to a bad example (i.e., the minimum contribution in a period) induces higher contributions. We find that when the type of feedback is not transparent to the group members, good examples boost cooperation while bad examples hamper it. There is no difference when the type of feedback is transparent. In a second experiment, feedback is endogenously chosen by a group leader. The results show that a large majority of the group leaders count on the positive effect of providing a good example. This is true regardless whether they choose the feedback type to be transparent or non-transparent. Half of the group leaders make the type of feedback transparent. With endogenously chosen feedback about good examples no difference in contributions can be observed among transparent and non-transparent feedback selection. In both experiments feedback shapes subjects’ beliefs. With exogenously chosen feedback, transparent feedback tends to reduce beliefs when good examples are provided as feedback and tends to increase beliefs in when bad examples are provided as feedback compared to the respective non-transparent cases. Our results shed new light on the design of feedback provision in public goods settings.
    Keywords: Feedback Design, Transparency, Public Goods, Imperfect Conditional Cooperation, Experiment
    JEL: H41 C92 D82
    Date: 2018–04–04
  6. By: Raouf Boucekine (Aix-Marseille University (IMéRA and AMSE), CNRS and EHESS); Fabien Prieur (EconomiX, University Paris Nanterre); Chrysovalantis Vasilakis (University of Bangor and IRES, Université catholique de Louvain); Benteng Zou (CREA, Université du 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
  7. By: Sean HORAN; Martin J. OSBORNE; M. Remzi SANVER
    Abstract: A collective choice rule selects a set of alternatives for each collective choice problem. Suppose that the alternative x is in the set selected by a collective choice rule for some collective choice problem. Now suppose that x rises above another selected alternative y in some individual’s preferences. If the collective choice rule is “positively responsive”, x remains selected but y is no longer selected. If the set of alternatives contains two members, an anonymous and neutral collective choice rule is positively responsive if and only if it is majority rule (May 1952). If the set of alternatives contains three or more members, a large set of collective choice rules satisfy these three conditions. We show, however, that in this case only the rule that assigns to every problem its strict Condorcet winner satisfies the three conditions plus Nash’s version of “independence of irrelevant alternatives” for the domain of problems that have strict Condorcet winners. Further, no rule satisfies the four conditions for the domain of all preference relations.
    Keywords: Majority rule, Condorcet winner, May's theorem, positive responsiveness, Nash independence
    JEL: D70 D71
    Date: 2018
  8. By: Anesi, Vincent; Bowen, T. Renee
    Abstract: We study conditions under which optimal policy experimentation can be implemented by a committee. We consider a dynamic bargaining game in which, each period, committee members choose to implement a risky reform or implement a policy with known returns. We first show that when no redistribution is allowed the unique equilibrium outcome is generically inefficient. When committee members are allowed to redistribute resources (even arbitrarily small amounts), there always exists an equilibrium that supports optimal experimentation for any non-collegial voting rule. With collegial voting rules, however, optimal policy experimentation is possible only with a sufficient amount of redistribution. We conclude that veto rights, not constraints on redistribution, constitute the main obstacle to optimal policy experimentation.
    Keywords: Committees; Endogenous Status Quo; Experimentation; redistribution; reforms; Voting rules
    JEL: C73 C78 D61 D71 H23
    Date: 2018–03
  9. By: Bouton, Laurent; Conconi, Paola; Pino, Francisco; Zanardi, Maurizio
    Abstract: We study how electoral incentives affect policy choices on secondary issues, which only minorities of voters care intensely about. We develop a model in which office and policy motivated politicians choose to support or oppose regulations on these issues. We derive conditions under which politicians flip-flop, 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 effect on Democratic senators and a pro-environment effect on Republican senators. These effects 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; Environment; Gun control; Reproductive Rights.
    Date: 2018–03
  10. By: Hulya Eraslan (Rice University, Department of Economics); Saltuk Ozerturk (Southern Methodist University, Department of Economics)
    Abstract: We develop a model to study the political economy implications of information gatekeeping, i.e., a policy of granting access only to friendly media outlets and denying access to critical ones. While an incumbent prefers positive bias, granting access improves her re-election probability only if coverage is sufficiently credible in the eyes of the public. Information gatekeeping can induce a quid pro quo relationship: media provides coverage with positive bias in exchange of future access, thereby affecting electoral outcomes in favor of incompetent incumbents. The degree of access media enjoy increases with competence of incumbents over those issues under public focus.
    Keywords: Information gatekeeping, media outlet, electoral competition, access, media bias.
    JEL: D72 D83 L82
    Date: 2018–03
  11. By: lapointe, Simon
    Abstract: This paper studies voters' preferences on municipal borders in a setting with cohabiting linguistic communities. It takes advantage of unique data from referendum results in the Canadian province of Quebec in 2004, which allows a direct investigation of voter preferences. I find that differences in income and language affect the likelihood of secession. Notably, I also find that these effects are interdependent, suggesting that the support for a local secession is affected to some degree by out-group aversion. Finally, I find that voters are willing to pay additional taxes to live in their jurisdiction of choice.
    Keywords: Secession; Diversity; Voter Behaviour; Municipal Mergers., Local public finance and provision of public services, D72, H73, H77,
    Date: 2018
  12. By: Emerson Melo (Indiana University, Department of Economics)
    Abstract: This paper studies strategic interaction in networks. We focus on games of strategic substitutes and strategic complements, and departing from previous literature, we do not assume particular functional forms on players' payoffs. By exploiting variational methods, we show that the uniqueness, the comparative statics, and the approximation of a Nash equilibrium are determined by a precise relationship between the lowest eigenvalue of the network, a measure of players' payoff concavity, and a parameter capturing the strength of the strategic interaction among players. We apply our framework to the study of aggregative network games, games of mixed interactions, and Bayesian network games.
    Keywords: Network Games, Variational Inequalities, Lowest Eigenvalue, Shock Propagation
    JEL: C72 D85 H41 C61 C62
    Date: 2018–02
  13. By: Mamadou Gueye; Nicolas Quérou; Raphael Soubeyran
    Abstract: In this paper, we use a laboratory experiment to analyze the relationship between equity and coordination success in a game with Pareto ranked equilibria. Equity is decreased by increasing the coordination payoffs of some subjects while the coordination payoffs of others remain unchanged. Theoretically, in this setting, difference aversion may lead to a positive relationship between equity and coordination success, while social welfare motivations may lead to a negative relationship. Using a within-subject experimental design, we find that less equity unambiguously leads to a higher level of coordination success. Moreover, this result holds even for subjects whose payoffs remain unchanged. Our results suggest that social welfare motivations drives the negative relationship between equity and coordination success found in this experiment. Moreover, our data suggest that the order of treatment matters. Groups facing first the treatment with high inequality in coordination payoffs, then the treatment with low inequality in coordination payoffs, reach the Pareto dominant equilibrium more often in both treatments compared to groups playing first the treatment with low inequality in coordination payoffs, then the treatment with high inequality in coordination payoffs.
    Keywords: coordination game, equity, effciency, difference aversion, social welfare motivation
    JEL: C70 C72 C92 C91 D63
    Date: 2018–04
  14. By: Mervi Huhtelin; Suvi Nenonen; Juha-Matti Junnonen; Arja-Liisa Kaasinen; Minna Andersson
    Abstract: Practitioners and researchers are of constant quest for a more accurate understanding of the places ability to support functionality and building performance to be able to create places that support the functions intended by the purpose of a place. Interorganizational product development, focus on ideation phase, is one of the most intriguing areas due to its vital importance of company competitiveness. The role of trust and the quality of the place are continuous interaction. The importance of trust in ideation phase and the characteristics of a place to support ideation phase are studied with the aspiration to gain more understanding about the relationship between trust and place.The goal of this paper is to provide an overview of the importance of trust in ideation phase of an intraorganizational product development project and study, what kind of physical and virtual spaces support that phase. More precisely the aim is to study trust in connection with participants willingness and ability to do his or her responsibilities in that phase, the willingness and ability to listen and resolve conflicting objectives, willingness to support all the participants, so that the project is successful in accordance with the objectives of all parties and the ability to detect and take into account the essential objectives in terms of the overall goals. How to describe the relationship between the importance of trust and requirements for the place in ideation phase of an intraorganizational product development project?Methods, face-to-face interview for 10 participants was conducted and the answers analyzed with content analysis.The conclusion of this study is that a space supporting idea generation on interorganizational product development process, should support creative, visual and energetic teamwork, whether the platform is physical or virtual. A place supporting ideation phase was described to be informal and open, shared between team members. It should have elements that support democracy among the team members. It should support the communication and formation of shared language, values and goal. Trust for team members having good will towards each other, affect based trust, was considered more important as the cognition based trust. In ideation phase there was an emphasis towards trust supporting team work and space supporting team interaction.The practical implications can be drawn to guide managers in campus development and developpers of innovation
    Keywords: Big Room; Interaction; interorganizational product development; knowledge co-creation; Trust
    JEL: R3
    Date: 2017–07–01
  15. By: Eric Kamwa (LC2S - Laboratoire Caribéen de Sciences Sociales - UAG - Université des Antilles et de la Guyane); Vincent Merlin (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR1 - Université de Rennes 1 - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In most of the social choice literature dealing with the computation of the exact probability of voting events under the impartial culture assumption, authors deal with no more than four constraints to describe voting events. With more than four constraints, most of the authors rely on Monte-Carlo simulations. It is usually more tricky to estimate the probability of events described by five constraints. Gehrlein and Fishburn (1980) have tried, but their conclusions are based on conjectures. In this paper, we circumvent this conjecture by having recourse to the technique suggested by Saari and Tataru (1999) in order to compute the limit probability of the consistency of collective rankings when there are four competing alternatives given that the decision rule is a scoring rule. We provide a general formula for the limit probability of the consistency and we determine the optimal decision rules among the scoring rules that provide the best guarantee of consistency. Given the collective ranking on a set A, we have consistency if the collective ranking on B a proper subset of A is not altered after some alternatives are removed from A.
    Date: 2018–04–03
  16. By: Alexander V. Karpov (National Research University Higher School of Economics)
    Abstract: This paper presents a novel combinatorial approach for voting rule analysis. Applying reversal symmetry, we introduce a new class of preference profiles and a new representation (bracelet representation). By applying an impartial, anonymous, and neutral culture model for the case of three alternatives, we obtain precise theoretical values for the number of voting situations for the plurality rule, the run-off rule, the Kemeny rule, the Borda rule, and the scoring rules in the extreme case. From enumerative combinatorics, we obtain an information utilization index for these rules. The main results are obtained for the case of three alternative
    Keywords: ANEC, IANC, plurality, run-off, Kemeny, Borda, scoring rules, reversal symmetry
    JEL: D70
    Date: 2018
  17. By: Tatyana Rudneva (National Research University Higher School of Economics)
    Abstract: This paper concentrates on the activities of different actors on the international arena in the area of security, their cooperation with each other and the overall role diplomatic activities play in the twenty-first century global security governance. After the two worlds wars the international community adopted the principle of collective defence and tried to establish a comprehensive multilevel international security system headed by the UN. Nation-states ceased to be the only actors participating in the international relations, instead they acquired the role of the smallest elements in a global UN-system, often linked together by regional intergovernmental organisations (ROs) to build smaller regional subsystems. On top of that, they still enjoyed all the powers they had as sovereign states. Given the non-hierarchical character of the described system the functions of its components often overlapped and intertwined. With the rising involvement of non-state actors, the system is as intricate as ever. For the system to be effective, it is very important that all the actors are able to participate in the governance processes adequately and equitably. In the age of urgent security challenges, the response has to be quick and concerted. In the present paper, we provide a detailed analysis of the activities of different actors directed at resolving an interstate conflict. We chose to focus on the 2008 Russia-Georgia conflict in South Ossetia, in which directly or indirectly was involved a whole bunch of intergovernmental organisations (CSTO, OSCE, SCO, UN, EU, NATO), sovereign state and non-state actors. It is particularly remarkable that despite the fact that both states were members of the UN and a number of ROs, which should have been enough to ensure proper cooperation, there were still organisations and institutions involved neither of the states were members of, as, for example, the EU. Thus, in regard to the activities of different actors the 2008 Russia-Georgia conflict is illustrative of at least two phenomena: (i) actors trying to exert influence beyond the territory of their concern (ii) actors trying to exert influence beyond their policy domain. Using case-study approach, the paper will present an investigation of these two phenomena and the logic behind them. We will scrutinise the actual way the conflict was handled and what role each of the actors involved played in resolving the conflict in order to determine why they chose to participate in the first place, to define their goals and objectives and to estimate the influence each of them had on the outcome and the general ability of the existing system to provide a concerted response to the challenges of global security despite coinciding scopes. The findings of this study will help to draw conclusions about the role of different players in the global security governance and evaluate the efficiency of the existing global governance mechanisms
    Keywords: global governance conflict resolution security governance Russia Georgia
    JEL: Z
    Date: 2018
  18. By: Jørgen Skatland; Ole Møystad
    Abstract: A distinct feature that characterise the building project as a cognitive process is the transformation of thoughts into built physical objects. Being a complex human activity, this process typically involves several influential actors, each driven in different ways by their own aims, competencies and goals. A critical challenge to the value potential of the project development, is that of retaining a shared goal across the influential actors and their different agendas.This paper investigates modalization as it unfolds in a collaborative project process as the cognitive feature of qualifying and disseminating input (information) towards a project`s development from concept to physical object. The case study furthermore goes to demonstrate how certain modalities carry on as affordances between the new built environment and its users.By mapping the information content of the cognitive process of early phase concept development in an empirical case study of an actual, built project, we aim to re-engineer the synthetic process of concept development. In doing so we gain an analytic viewpoint on the cognitive process, and furthermore provide some new insights into the problem of retaining the built object as a shared goal across the project organisation and through the construction process.Our findings indicate that a large share of conceptual concerns were diverted towards processual concerns such as "how to get it built" as opposed to a focus on "what to build" – as in the future affordances of the physical product of the development. Upon uncovering this difference between the cognitive modalities of process VS product concerns, we aim to contextualise this dynamic by comparing the metaphysical and pragmatic difference, reflected by the ontological transformation from concept to physical object. It is this transformation that produces the affordances that represent the value of the architectural object.By connecting modalities of information to physical modalities, we aim to make a direct connection between distinct features of cognition and the added value potential embedded in the affordances of the product in a project development. This production of added value, in the life of the user, depends on directing the cognitive labour of a project team towards a shared object of thought, which in the case of a building project must be the physical object, as this is the cognitive joint which enables continuity between design, (production) and use.
    Keywords: Added Value; case studies; Cognition; Information Theory; Project Development
    JEL: R3
    Date: 2017–07–01

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