nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2018‒04‒30
seventeen papers chosen by
Stan C. Weeber, McNeese State University

  1. Approval Voting and Shapley Ranking By Pierre Dehez; Victor Ginsburgh
  2. Diversity and Group Performance in a Complex Real Estate Project Situation By Liesa Schrand
  3. Decentralization, spending efficiency and pro-poor outcomes in Morocco By Maria EL KHDARI; Babacar SARR
  4. How Social Preferences Influence the Stability of a Climate Coalition By Lin, Yu-Hsuan
  5. Public Opinion, Elections, and Environmental Fiscal Policy By Chortareas, Georgios; Logothetis, Vassilis; Papandreou, Andreas
  6. Deconcentration, political and fiscal decentralization, in Morocco By Maria EL KHDARI
  7. Farsighted Rationality By Karos, Dominik; Kasper, Laura
  8. The Political Impact of Immigration: Evidence from the United States By Mayda, Anna Maria; Peri, Giovanni; Steingress, Walter
  9. Radical Right Populism and the Role of Positional Deprivation and Inequality By Brian Burgoon; Sam van Noort; Matthijs Rooduijn; Geoffrey Underhill
  10. Can Media Drive the Electorate? The Impact of Media Coverage on Party Affiliation and Voting Intentions By Dewenter, Ralf; Linder, Melissa; Thomas, Tobias
  11. Stochastic Petropolitics: The Dynamics of Institutions in Resource-Dependent Economies By Raouf Boucekkine; Fabien Prieur; Chrysovalantis Vasilakis; Benteng Zou
  12. Information Flows, the Accuracy of Opinions, and Crashes in a Dynamic Network By Phillip Monin; Richard Bookstaber
  13. It's never too late: Funding dynamics and self pledges in reward-based crowdfunding By Crosetto, P.; Regner, T.
  14. A Theory of Armed Clientelism By Jorge Gallego
  15. Women, Rails and Telegraphs: An Empirical Study of Information Diffusion and Collective Action By Camilo García-Jimeno; Angel Iglesias; Pinar Yildirim
  16. Challenging conventional wisdom: Experimental evidence on heterogeneity and coordination in avoiding a collective catastrophic event By Waichman, Israel; Requate, Till; Karde, Markus; Milinski, Manfred
  17. Joint use of the mean and median for multi criteria decision support: the 3MCD method By Rufin-Benoît M. Ngoie; Zoïnabo Savadogo; Eric Kamwa; Berthold Ulungu

  1. By: Pierre Dehez; Victor Ginsburgh
    Abstract: Approval voting allows voters to list any number of candidates. Their scores are obtained by summing the votes cast in their favor. Fractional voting instead follows the One-person-onevote principle by endowing voters with a single vote that they may freely distribute among candidates. In this paper, we show that to be fair, such a ranking requires a uniform distribution. It corresponds to Shapley ranking that was introduced to rank wines as the Shapley value of a cooperative game with transferable utility. We analyze the properties of these "ranking games" and provide an axiomatic foundation to Shapley ranking. We also analyze Shapley ranking as a social welfare function and compare it to approval ranking.
    Date: 2018–04
  2. By: Liesa Schrand
    Abstract: Project work is a fact of modern work environments. Especially given the increasingly complex nature of real estate projects, group interaction and communication is essential to develop innovative solutions for customers. Therefore, many researchers have hypothesized that mixed working groups yield better results than uniform groups.Scientists of different social sciences have developed two opposing theories, how group diversity might impact the group’s performance: One group of researchers argues that work-group diversity may have a positive effect (information/decision making theory), while the opposing group argues that a negative effect is more likely (social categorization theory and similarity/attraction theory). The information/decision-making theory conjectures that within heterogeneous groups the variety of perspectives and the broader range of knowledge and skills fosters creativity and innovation as well as the quality of decision-making and consequently group performance (Cox und Blake, 1991; Jehn et. al., 1999).This view is challenged by the proponents of the social categorization theory as well as by the similarity/attraction theory: These researchers argue that homogenous teams show a greater social cohesion, which enables better communication. Then, significant work-group diversity would lead to more conflict situations, lower job satisfaction and higher staff turnover, and this would lower group performance (Thurner, 1987; Williams and O’Reilly, 1998).In this study we investigate the relationship between group diversity and group performance in real estate projects. As real estate projects are highly complex and distinct they usually require diverse qualifications and personal qualities from the relevant parties as well as good communication skills. The question, whether group diversities lead to better group performance is therefore highly relevant for the specific nature of real estate projects.We test the impact of group diversity on overall group performance with a unique data set: We collected the results of 200 project works of real estate executive education students at the IREBS Real Estate Academy from 2010 until 2015. Several group-relevant factors are controlled for, including age, sex, educational and professional background of the team members as well as the group size and the academic performance of the team.
    Keywords: group composition; group outcome; mixed teams; project work
    JEL: R3
    Date: 2017–07–01
  3. By: Maria EL KHDARI; Babacar SARR
    Abstract: This paper studies how decentralization affects poverty, vulnerability, and inequality in Morocco, in the context of ongoing regionalization reforms. We use different non-parametric approaches to assess spending efficiency of Moroccan municipalities and regions over the period 2005-2009. The results indicate that the efficiency of spending in improving pro-poor outcomes is dependent on the fiscal autonomy of subnational governments. While the impact of transfer dependency is not statistically significant, more granular data show that formula-based (unconditional) transfers significantly improve spending efficiency when the opposite is true for ad-hoc (conditional) transfers. Furthermore, we investigate the impact of political decentralization and find that local spending is less efficient in regions where municipal governments have a greater responsibility for spending compared to the regional government. This finding also holds in more fragmented regions with a high number of municipalities. Finally, we test whether there is an electoral budget cycle in Morocco and find that spending efficiency decreases the year of local elections, but increases with the level of education of elected officials.
    Keywords: Decentralization, Morocco, Poverty, Vulnerability, Inequality, Public spending efficiency, Data envelopment analysis, Partial Frontier Analysis.
    JEL: H7 C14 H5 C23 I3
    Date: 2018–04
  4. By: Lin, Yu-Hsuan
    Abstract: This study examines the impact of social preferences on the individual incentives of participating in climate coalitions with laboratory experimental evidences. The theoretical result suggests that, when a player was inequality-neutral, a dominant strategy equilibrium could exist. However, individuals with social preference may lead a vacillated coalition formation. Joining or not joining depend on the player was critical or non-critical to an effective coalition respectively. The laboratory experimental result shows that players were inequality-averse and the coalition was usually larger than the equilibrium size but unstable. 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. Our findings help to understand the climate coalition formation.
    Keywords: international environmental agreements; social preference; inequality-aversion; experimental design; climate coalition
    JEL: C91 D63 D71 Q54 Q58
    Date: 2018–03
  5. By: Chortareas, Georgios (King's College London and National and Kapodistrian University of Athens); Logothetis, Vassilis (Cardiff Business School); Papandreou, Andreas (National and Kapodistrian University of Athens)
    Abstract: We investigate how public opinion along with the electoral process affect the strength of environmental fiscal policies in the European Union (EU). Our analysis accounts for a set of economic, institutional, and political factors that can affect environmental taxes and expenditures. We pursue a dynamic panel data analysis covering 27 EU countries using public opinion data. We produce evidence showing that public concern for the environment, as gauged by opinion surveys, positively affects environmental protection expenditures, while elections negatively affect environmental tax revenues and environmental protection expenditures shrink in the aftermath of elections. We do not find evidence of partisan effects. The effect of public opinion and elections on environment-related fiscal decisions depends on the degree of integration with the global economy as well as several institutional factors including the level of corruption and the soundness of the rule of law. We also document that the results are impervious to a wide set of robustness tests.
    Keywords: Environmental Protection, Taxes and Expenditures, Public Opinion, European Union, Panel Data
    JEL: D72 Q58 C23
    Date: 2018–04
  6. By: Maria EL KHDARI
    Abstract: The paper examines how the Government of Morocco has addressed the issue of decentralization in recent years and how these processes have evolved and affected fiscal and public policies. More specifically, this paper analyzes the current legislative and institutional provisions governing administrative, political and fiscal decentralization in Morocco and presents a detailed analysis of the decentralized tax system. It analyses the role of each tier and the political, administrative and fiscal prerogatives of their respective councils. It appears from this analysis that the Moroccan system is still largely centralized. First, through the continued control of the central government via the tutelle. Second, because of the low financial autonomy of the local governments which remain widely dependent on intergovernmental transfers. Finally, it appears that the shared management of local taxation by different tiers of government can result in a lack of communication and information sharing as well as a lack of commitment from those that manage the collection on behalf of others. The regional level should be given more power to oversee and harmonize the prerogatives of each level of subnational government.
    Keywords: Deconcentration, Political decentralization, Fiscal decentralization, Local taxes, Local governments, Morocco.
    JEL: D72 H7 H2 H1
    Date: 2018–04
  7. By: Karos, Dominik (General Economics 1 (Micro)); Kasper, Laura (universitaat des saarlandes; saarland university)
    Abstract: Farsighted deviations are based on agents' abilities to compare the outcome of a farsighted deviation to the status quo. However, agents do not account for deviations by others in case they do not change the status quo; so, they are not fully farsighted. We use extended expectation functions to capture a coalition's belief about subsequent moves of other coalitions in both cases. We provide three stability and optimality axioms on coalition behavior and show that an expectation function satisfies these axioms if and only if it corresponds to an equilibrium of the abstract game that is stable with respect to coalitional deviations. We provide applications of our solution for games in characteristic function form and matching problems.
    Keywords: abstract games, farsighted stability, expectation functions, coalition stable equilibrium
    JEL: C71 C72
    Date: 2018–04–26
  8. By: Mayda, Anna Maria; Peri, Giovanni; Steingress, Walter
    Abstract: In this paper we study the impact of immigration to the United States on the vote for the Republican Party by analyzing county-level data on election outcomes between 1990 and 2010. Our main contribution is to separate the effect of high-skilled and low-skilled immigrants, by exploiting the different geography and timing of the inflows of these two groups of immigrants. We find that an increase in the first type of immigrants decreases the share of the Republican vote, while an inflow of the second type increases it. These effects are mainly due to the local impact of immigrants on votes of U.S. citizens and they seem independent of the country of origin of immigrants. We also find that the pro-Republican impact of low-skilled immigrants is stronger in low-skilled and non-urban counties. This is consistent with citizens' political preferences shifting towards the Republican Party in places where low-skilled immigrants are more likely to be perceived as competition in the labor market and for public resources.
    Keywords: Economic and Fiscal Channels; Electoral Effects; Immigration; Republican Party
    JEL: F22 J61
    Date: 2018–04
  9. By: Brian Burgoon; Sam van Noort; Matthijs Rooduijn; Geoffrey Underhill
    Abstract: This paper explores how support for radical right populist parties may be shaped by new measures of deprivation and inequality based on growth-incidence-curves, gauging growth in real household income across a country’s income deciles and calculating a given decile’s gains relative to the gains of other deciles. The paper argues that such positional measures capture drivers of economic resentment relevant to radical-right populism. First, radical right populism is more likely among individuals facing more ‘positional deprivation’, those in deciles with gains that are smaller than the gains of the average, richest or poorest deciles in their own country. Second, subjective low income more strongly spurs support for radical right populist parties in polities with higher ‘positional inequality’, where the wealthiest deciles experience greater gains than (or suffer less than) the median or poorest earners. The paper tests these expectations using individual-level survey data from sixteen European countries. It finds support for the arguments, not only in patterns of support and voting for parties in the radical right party family but also in patterns of support and voting for parties expressing more anti-globalization nationalism and authoritarianism in their party manifestos.
    Keywords: politics, electoral, voter, income distribution, radical-right populism, positional deprivation
    Date: 2018–03
  10. By: Dewenter, Ralf (Helmut Schmidt University, Hamburg); Linder, Melissa (Helmut Schmidt University, Hamburg); Thomas, Tobias (EcoAustria – Institute for Economic Research, Austria, and Düsseldorf Institute for Competition Economics (DICE),)
    Abstract: As the rise of populist and right-wing political movements is connected to extensive media coverage, the question arises whether media report more on political parties because of their success or if their success is caused by media reports. To tackle this question, we investigate how media coverage affects short- and long-term political preferences, namely party affiliation and voting intention. For our empirical analysis, we merge 14 years of human-coded data obtained from leading media in Germany with results of the comprehensive German Politbarometer survey from February 1998 through December 2012. To account for endogeneity, we employ instrumental variable estimations. In addition, we control for a multitude of (internal) personal characteristics, such as age, and gender, as well as for (external) macroeconomic variables, such as business climate, unemployment, and inflation. The results show that media coverage of a political party has a positive and significant effect on the short-term voting intention for this party. When media outlets cover a political party more positively, the electorate has a greater tendency to vote for it. However, for long-term party affiliation, the effect vanishes. This is consistent with the economic theory. Long-term preferences are stable and, thus, contemporary events, such as media coverage, hardly affect supposedly stable preferences. However, in the long-term, party affiliation might also be affected.
    Keywords: political preferences; voting intention; media impact
    JEL: C40 D72
    Date: 2018–04–26
  11. By: Raouf Boucekkine (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique - AMU - Aix Marseille Université - EHESS - École des hautes études en sciences sociales, IMéRA - Institute for Advanced Studies - Aix-Marseille University, IUF - Institut Universitaire de France - M.E.N.E.S.R. - Ministère de l'Éducation nationale, de l’Enseignement supérieur et de la Recherche); Fabien Prieur (University Paris X-Nanterre); Chrysovalantis Vasilakis (University of Bangor - University of Bangor, UCL IRES - Institut de recherches économiques et sociales - UCL - Université Catholique de Louvain); Benteng Zou (CREA - Center for Research in Economic Analysis - - 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
    Date: 2018–04
  12. By: Phillip Monin (Office of Financial Research); Richard Bookstaber (University of California)
    Abstract: Markets coordinate the flow of information in the economy, aggregating it through the price mechanism. We develop a dynamic model of information transmission and aggregation in financial and other social networks in which continued membership in the network is contingent on the accuracy of opinions. Agents have opinions about a state of the world and form links to others in a directed fashion probabilistically. Agents update their opinions by averaging those of their connections, weighted by how long their connections have been in the system. Agents survive or die based on how far their opinions are from the true state. In contrast to the results in the extant literature on DeGroot learning, we show through simulations that for some parameterizations the model cycles stochastically between periods of high connectivity, in which agents arrive at a consensus opinion close to the state, and periods of low connectivity in which agents’ opinions are widely dispersed. We add varying degrees of homophily through a model parameter called tribal preference and find that crash frequency is decreasing in the degree of homophily. Our results suggest that the information aggregation function of markets can fail solely because of the dynamics of information flows, irrespective of shocks or news.
    Keywords: social networks, DeGroot learning, dynamic network formation, information transmission, nonlinear dynamical systems, crashes
    Date: 2017–03–02
  13. By: Crosetto, P.; Regner, T.
    Abstract: Crowdfunding recently emerged as an alternative funding channel for entrepreneurs. We use pledge-level data from Startnext, the biggest German platform, to gain insights on funding dynamics and pledgers’ motivations. We find that the majority of projects that eventually succeed are not on a successful track at 75% of their funding period. These late successes are boosted by information cascades during the final 25% of the funding duration. We conclude – in contrast with earlier literature – that project success is only partially path-dependent. While early pledges do anticipate project success, a lack of them does not necessarily mean that projects will fail. Interviews and questionnaire responses indicate that projects’ communication efforts play a role in making severely under track projects succeed eventually. Moreover, our dataset uniquely allows us to quantify the extent of self funding. Self pledges account for about 10% of all initial pledges and 9% of all pledges that secure funding. Nonetheless, the late surges at severely under track projects are mostly driven by external funders. Furthermore, we find no evidence of subsequent herding triggered by self pledges.
    JEL: L26 D03 G32 O31
    Date: 2018
  14. By: Jorge Gallego
    Abstract: Armed clientelism is a particular form of patronage in which politicians and non-state armed groups establish a symbiotic relationship where the former provides economic resources, judicial protection, or other benefits, while the latter provides political support and votes. In this paper a theory of armed clientelism is presented, which shows that when politicians establish illegal alliances with armed groups and mafias, they face a political tradeoff: illegal alliances augment the probability of being elected, but generate the risk of being removed from office. The model predicts that in a context in which a mafia controls a district or a town, armed clientelism is more likely when social diversity among the constituency is high, the judicial system is inefficient, party identification of citizens to clientelistic parties is low, and candidates are highly budget-constrained. It also shows that armed clientelism is more likely when the illegal group and the machine are ideologically aligned.
    Date: 2018–03–01
  15. By: Camilo García-Jimeno; Angel Iglesias; Pinar Yildirim
    Abstract: How do social interactions shape collective action, and how are they mediated by the availability of networked information technologies? To answer these questions, we study the Temperance Crusade, one of the earliest instances of organized political mobilization by women in the U.S. This wave of protest activity against liquor dealers spread between the winter of 1873 and the summer of 1874, covering more than 800 towns in 29 states. We first provide causal evidence of social interactions driving the diffusion of the protest wave, and estimate the roles played by information traveling along railroad and telegraph networks. We do this by relying on exogenous variation in the rail network links generated by railroad worker strikes and railroad accidents. We also develop an event-study methodology to estimate the complementarity between rail and telegraph networks in driving the spread of the Crusade. We find that railroad and telegraph-mediated information about neighboring protest activity were main drivers of the diffusion of the protest movement. We also find strong complementarities between both networks. Using variation in the types of protest activities of neighboring towns and in the aggregate patterns of the diffusion process, we also find suggestive evidence of social learning as a key mechanism behind the effect of information on protest adoption.
    JEL: D71 D83 N11 N31 N71 O18 Z12
    Date: 2018–04
  16. By: Waichman, Israel; Requate, Till; Karde, Markus; Milinski, Manfred
    Abstract: Avoiding a catastrophic climate change event is a global public good characterized by several dimensions, notably heterogeneity between the parties involved. It is often argued that such heterogeneity between countries is a major obstacle to cooperative climate policy. We challenge this belief by experimentally simulating two important heterogeneities, in wealth and loss, when dangerous climate change occurs. We find that under loss heterogeneity the success rate in achieving sufficient mitigation to prevent catastrophic climate change is higher than with homogeneous parties. We also observe that neither endowment heterogeneity nor the combination of endowment and loss heterogeneities lead to significantly different success rates than with homogeneous parties. Our findings suggest that heterogeneities may facilitate rather than hinder successful international climate policy negotiations.
    Keywords: global public good,climate change negotiation,collective-risk social dilemma,endowment heterogeneity,loss heterogeneity,focal point
    JEL: C92 D74 H41 Q54
    Date: 2018
  17. By: Rufin-Benoît M. Ngoie; Zoïnabo Savadogo; Eric Kamwa (LC2S - Laboratoire Caribéen de Sciences Sociales - UAG - Université des Antilles et de la Guyane); Berthold Ulungu
    Abstract: Most multicriteria aggregation functions are designed in a mono-decision-maker context. Using them for multi-decision-maker problems requires a prior transformation of the individual data of each decision-maker into a collective datum. Recently a method for the aggregation of data in the context of social choices has been introduced by Ngoie et al. (2015a): The Mean-Median Compromise Method (MMCM). In this paper, we suggest an adaptation of the MMCM to multi-criteria multi-decision-maker problems: the Mean and Median for Multi-Criteria Decision (3MCD). We also examine some properties of this rule.
    Keywords: Mean,Majority Judgment,Multi-Criteria Decision,Median
    Date: 2018–04–06

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