nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2018‒07‒16
sixteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Extensions of the Simpson voting rule to the committee selection setting By Daniela Bubboloni; Mostapha Diss; Michele Gori
  2. Negative advertising and electoral rules: an empirical evaluation of the Brazilian case By Danilo P. Souza; Marcos Y. Nakaguma
  3. Tax-Exempt Lobbying: Corporate Philanthropy as a Tool for Political Influence By Bertrand, Marianne; Bombardini, Matilde; Fisman, Raymond; Trebbi, Francesco
  4. Formation of coalition structures as a non-cooperative game By Dmitry Levando
  5. International Environmental Agreements - The Impact of Heterogeneity among Countries on Stability By Effrosyni Diamantoudi; Eftichios Sartzetakis; Stefania Strantza
  6. Take-up and Targeting: Experimental Evidence from SNAP By Finkelstein, Amy; Notowidigdo, Matthew J.
  7. Exploring the Effects on the Electoral College of National and Regional Popular Vote Interstate Compact: An Electoral Engineering Perspective By Laurent, Thibault; Le Breton, Michel; Lepelley, Dominique; de Mouzon, Olivier
  8. Not all Group Members are created Equal: Heterogeneous Abilities in Inter-group Contests By Francesco Fallucchi; Enrique Fatas; Felix Koelle; Ori Weisel
  9. Legal and Political Agreements for Sharing International Rivers with Water Shortage By Takayuki Oishi
  10. Killing Social Leaders for Territorial Control: The Unintended Consequences of Peace By Mounu Prem; Andrés F. Rivera; Dario A. Romero; Juan F. Vargas
  11. Inclusive Cognitive Hierarchy in Collective Decisions By Yukio Koriyama; Ali Ozkes
  12. Interdependence and superordinate goals: The revenge of the dualists By W.F. Lawless
  13. Borda Count Method for Fiscal Policy- A Political Economic Analysis - By Ryo Ishida; Kazumasa Oguro
  14. Soviet legacies of economic development, oligarchic rule and electoral quality in Eastern Europe’s partial democracies: the case of Ukraine By Lankina, Tomila V.; Libman, Alexander
  15. Cohesive Institutions and Political Violence By Fetzer, Thiemo; Kyburz, Stephan
  16. Interactive Information Design By Tomala, Tristan; Koessler, Frederic; Laclau, Marie

  1. By: Daniela Bubboloni (Dipartimento di Matematica e Informatica “Ulisse Dini” Università degli Studi di Firenze, viale Morgagni, 67/a, 50134, Firenze, Italy); Mostapha Diss (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint-Etienne, France); Michele Gori (Dipartimento di Scienze per l’Economia e l’Impresa, Università degli Studi di Firenze, via delle Pandette 9, 50127, Firenze, Italy)
    Abstract: Committee selection rules are procedures selecting sets of candidates of a given size on the basis of the preferences of the voters. There are in the literature two natural extensions of the well-known single-winner Simpson voting rule to the multiwinner setting. The first method gives a ranking of candidates according to their minimum number of wins against the other candidates. Then, if a fixed number k of candidates are to be elected, the k best ranked candidates are chosen as the overall winners. The second method gives a ranking of committees according to the minimum number of wins of committee members against committee nonmembers. Accordingly, the committee of size k with the highest score is chosen as the winner. We propose an in-depth analysis of those committee selection rules, assessing and comparing them with respect to several desirable properties among which unanimity, fixed majority, non-imposition, stability, local stability, Condorcet consistency, some kinds of monotonicity, resolvability and consensus committee. We also investigate the probability that the two methods are resolute and suffer the reversal bias, the Condorcet loser paradox and the leaving member paradox. We compare the results obtained with the ones related to further well-known committee selection rules. The probability assumption on which our results are based is the widely used Impartial Anonymous Culture.
    Keywords: Multiwinner Elections, Committee Selection Rule, Simpson Voting Rule, Paradoxes, Probability
    JEL: D71 D72
    Date: 2018
  2. By: Danilo P. Souza; Marcos Y. Nakaguma
    Abstract: This paper assesses how electoral institutions shape candidates’ incentives about their political advertising strategies. Taking advantage of a discontinuity in the assigment of brazilian municipal election rules, we use a RDD approach to assess how the candidates campaign tone is affected by a shift from a single-ballot to a runoff system. Using an unique database about litigations involving mayor candidates in the elections of 2012 and 2016, results show that 2nd and 3rd placed candidates in the first round of a runoff election have a probability more than 50 p.p. higher of being part in a litigation regarding negative advertising when compared to a single round election.
    Keywords: elections; negative advertising; political advertising
    JEL: D72 D79 C29
    Date: 2018–07–03
  3. By: Bertrand, Marianne; Bombardini, Matilde; Fisman, Raymond; Trebbi, Francesco
    Abstract: We explore the role of charitable giving as a means of political influence, a channel that has been heretofore unexplored in the political economy literature. For philanthropic foundations associated with Fortune 500 and S&P500 corporations, we show that grants given to charitable organizations located in a congressional district increase when its representative obtains seats on committees that are of policy relevance to the firm associated with the foundation. This pattern parallels that of publicly disclosed Political Action Committee (PAC) spending. As further evidence on firms' political motivations for charitable giving, we show that a member of Congress's departure leads to a short-term decline in charitable giving to his district, and we again observe similar patterns in PAC spending. Charities directly linked to politicians through personal financial disclosure forms fled in accordance to Ethics in Government Act requirements exhibit similar patterns of political dependence. Our analysis suggests that firms deploy their charitable foundations as a form of tax-exempt influence seeking. Based on a straightforward model of political influence, our estimates imply that 7.2 percent of total U.S. corporate charitable giving is politically motivated, an amount that is economically significant: it is 280 percent larger than annual PAC contributions and about 40 percent of total federal lobbying expenditures. Given the lack of formal electoral or regulatory disclosure requirements, charitable giving may be a form of political influence that goes mostly undetected by voters and shareholders, and which is directly subsidized by taxpayers.
    Date: 2018–06
  4. By: Dmitry Levando (National Research University Higher School of Economics [Moscow], CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Traditionally social sciences are interested in structuring people in multiple groups based on their individual preferences. This paper suggests an approach to this problem in the framework of a non-cooperative game theory. Definition of a suggested finite game includes a family of nested simultaneous non-cooperative finite games with intra- and inter-coalition externalities. In this family, games differ by the size of maximum coalition, partitions and by coalition structure formation rules. A result of every game consists of partition of players into coalitions and a payoff profile for every player. Every game in the family has an equilibrium in mixed strategies with possibly more than one coalition. The results of the game differ from those conventionally discussed in cooperative game theory, e.g. the Shapley value, strong Nash, coalition-proof equilibrium, core, kernel, nucleolus. We discuss the following applications of the new game: cooperation as an allocation in one coalition, Bayesian games, stochastic games and construction of a non-cooperative criterion of coalition structure stability for studying focal points.
    Keywords: Noncooperative games,Nash equilibrium,Shapley value,strong equilibrium,core
    Date: 2017–05
  5. By: Effrosyni Diamantoudi (Department of Economics, Concordia University); Eftichios Sartzetakis (Department of Economics, University of Macedonia); Stefania Strantza (Department of Economics, Concordia University)
    Abstract: The present paper examines the stability of self-enforcing International Environmental Agreements (IEAs) among heterogeneous countries in a twostage emission game. In the first stage each country decides whether or not to join the agreement, while in the second stage the quantity of emissions is chosen simultaneously by all countries. We use quadratic benefit and environmental damage functions and assume k types of countries that differ in their sensitivity to the global pollutant. We find that the introduction of heterogeneity does not yield larger stable coalitions. In particular, we show that, in the case of two types, when stable coalitions exist their size is very small, and, if the asymmetry is strong enough, they include only one type of countries. Moreover, heterogeneity can reduce the scope of cooperation relative to the homogeneous case. We demonstrated that introducing asymmetry into a stable, under symmetry, agreement can disturb stability.
    Keywords: Environmental Agreements
    JEL: D6 Q5 C7
    Date: 2018–07
  6. By: Finkelstein, Amy (MIT); Notowidigdo, Matthew J. (Northwestern University)
    Abstract: This paper develops a framework for evaluating the welfare impact of various interventions designed to increase take-up of social safety net programs in the presence of potential behavioral biases. We calibrate the key parameters using a randomized field experiment in which 30,000 elderly individuals not enrolled in – but likely eligible for – the Supplemental Nutrition Assistance Program (SNAP) are either provided with information that they are likely eligible, provided with this information and also offered assistance in applying, or are in a "status quo" control group. Only 6 percent of the control group enrolls in SNAP over the next 9 months, compared to 11 percent of the Information Only group and 18 percent of the Information Plus Assistance group. The individuals who apply or enroll in response to either intervention receive lower benefits and are less sick than the average enrollee in the control group. The results are consistent with the existence of optimization frictions that are greater for needier individuals, suggesting that the poor targeting properties of the interventions reduce their welfare gains.
    Keywords: SNAP, food stamps, take-up, targeting, welfare
    JEL: C93 H53 I38
    Date: 2018–05
  7. By: Laurent, Thibault; Le Breton, Michel; Lepelley, Dominique; de Mouzon, Olivier
    Abstract: The main purpose of this paper is to explore the consequences of the formation of either a Regional Popular Vote Interstate compact or a National Popular Vote Interstate compact on the functioning of the Electoral College. The two versions of interstate Compact which are considered here differ in only one respect: in one case the interstate compact allocates its electoral votes to the regional popular winner while in the other case it allocates these votes to the national popular winner. They both differ from the ongoing National Popular Vote Interstate Compact as it is assumed that the agreement is effective as soon as the members sign it. The decisiveness and welfare analysis are conducted for a simplified symmetric theoretical version of the Electoral College where the malapportionment problems are absent. The three most popular probabilistic models are considered and the study is conducted either from the self-interest perspective of the initiators of the interstate compact or from a general interest perspective. The analysis combines analytical arguments and simulations.
    Keywords: Electoral College; Voting Power
    JEL: D71 D72
    Date: 2018–05
  8. By: Francesco Fallucchi (LISER); Enrique Fatas (Loughborough University and Universidad del); Felix Koelle (University of Cologne); Ori Weisel (Tel Aviv University)
    Abstract: Competition between groups is ubiquitous in social and economic life, and groups are typically not created equal. Here we experimentally investigate the implications of this general observation on the unfolding of symmetric and asymmetric competition between groups that are either homogeneous or heterogeneous in the ability of their members to contribute to the success of the group. Our main finding is that, in contrast with a number of theoretical predictions, efforts in contests involving heterogeneous groups are higher than in contests involving only homogeneous groups, leading to reduced earnings (to contest participants) and increased inequality. This effect is particularly pronounced in asymmetric contests, where both homogeneous and heterogeneous groups increase their efforts. We find that asymmetry between groups changes the way group members condition their efforts on those of their peers. Implications for contest designers are discussed.
    Keywords: Contests, groups, abilities, heterogeneity, experiments
    Date: 2018–06
  9. By: Takayuki Oishi
    Abstract: We develop normative investigation of sharing international rivers. First, we pro- pose the model of water problems in the situation where a river áows through several states with the possibility of water shortage. We derive claims problems from the water problems. We axiomatize the family of convex combinations of the propor- tional and the equal awards rules for water claims problems. Using a unique claim vector constrained by geographic factors of a watercourse and the majority voting rule, we demonstrate how to determine the legal and political agreement of water problems.
    Keywords: international river; claims problems; axiomatization; proportional rules; equal awards rules; median voter theorem
    JEL: D63 K32
    Date: 2018–05
  10. By: Mounu Prem; Andrés F. Rivera; Dario A. Romero; Juan F. Vargas
    Abstract: We study the unintended consequences of the recent peace process in Colombia, that ended over five decades of internal armed conflict with the FARC insurgency. Using a triple differences empirical strategy, we show that the permanent ceasefire that started in December 2014 in the context of the peace negotiations was followed by an increase in the killing of social leaders in previously FARC-dominated territories, perpetrated by other armed groups seeking control of these areas. Con- sistent with our interpretation that local social leaders are killed to thwart collective action and mobilization at the municipal level, we show that the targeting of social leaders is not explained by the behavior of the overall homicide rate and that it is exacerbated in municipalities with weaker state capacity and an inefficient local judi- ciary. Our results suggest that partial pacification processes can exacerbate violence by other existing armed groups, aimed at controlling pacified territories.
    Keywords: Social leaders, Peace process, Armed conflict, Territorial control
    JEL: D72 D74
    Date: 2018–06–27
  11. By: Yukio Koriyama (CREST, Ecole Polytechnique, Université Paris-Saclay); Ali Ozkes (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE)
    Abstract: We study the implications of structural models of non-equilibrium thinking, in which players best respond while holding heterogeneous beliefs on the cognitive levels of others. We introduce an inclusive cognitive hierarchy model, in which players are capable of projecting the self to others in regard to their cognitive level. The model is tested in a laboratory experiment of collective decision-making, which supports inclusiveness. Our theoretical results show that inclusiveness is a key factor for asymptotic properties of deviations from equilibrium behavior. Asymptotic behavior can be categorized into three distinct types: naïve, Savage rational with inconsistent beliefs, and sophisticated.
    Keywords: collective decision-making, bounded rationality, cognitive hierarchy, information aggregation
    JEL: C92 D72 D91
    Date: 2018–06
  12. By: W.F. Lawless (Paine College, Augusta, GA)
    Abstract: Appearances can be misleading, but not in the social sciences. Based on the statistical aggregation of intuitions (observations, self-reports, interviews) about reality across individuals that converge while seeking a 1:1 relation, the primary model of decision making attempts to make intuitions rational. But despite its many claims to the contrary, the social sciences have failed in building a successful predictive theory, including in economics where the results from this failure, re-labeled as irrational, have won Nobel prizes, yet irrational humans in freely organized and competitive teams strangely manage to be extraordinarily innovative. In contrast to traditional social science, the most predictive theory in all of science is the quantum theory, each prediction confirmed by new discoveries leading to new predictions and further discoveries, but the dualist nature of the quantum theory makes it counterintuitive despite more than a century of intense, unflagging debate. By re-introducing dualism into social science with a quantum-like theory of social interdependence, we offer an opportunity to rehabilitate social science by successfully making predictions and new discoveries about human teams that account for the abysmal performance of interdisciplinary science teams; that generalizes to the newly arising problem of how to engineer hybrid teams (arbitrary combinations of autonomous humans, machines and robots); and that explains the counterintuitive prediction that highly interdependent teams do not generate Shannon information, but instead “darken†as a team becomes perfect, meaning, intuitively, that structural information about a team can be gained only under competition.
    Keywords: interdependence, convergence, mathematical models
    Date: 2018–05
  13. By: Ryo Ishida (Policy Research Institute, Ministry of Finance); Kazumasa Oguro (Faculty of Economics, Hosei University)
    Abstract: Survey data reveals that government budgets tend to go into the red. Public Choice economists as well as public finance economists have been interested in this phenomenon. This paper presents a new explanation for this tendency from the political economic point of view; the current voting system might have a tendency to bring about a budget deficit. If policy choices only deal with the current tax rate and do not take into account the intertemporal tax rate, budget-balanced choice is difficult to be chosen. Even if voting choices take into account intertemporal aspects, we show that a budget-balanced choice is difficult to be chosen under relative majority rule. We further demonstrate that the Borda count method might overcome this issue.
    Keywords: relative majority rule, Borda count method, deficit
    JEL: D72 H41 H62
    Date: 2017–05
  14. By: Lankina, Tomila V.; Libman, Alexander
    Abstract: Can economic development retard democracy, defying expectations of classic modernization theorizing? If so, under what conditions? Our paper addresses the puzzle of poor democratic performance in highly urbanized and industrialized post-communist states. We assembled an original dataset with data from Ukraine’s local and national elections and constructed district- (rayon) and region- (oblast) level indices of electoral quality. Regions and districts that score higher on developmental indices also score lower on electoral quality, including in Ukraine’s Western regions conventionally considered more democratic than the predominantly Russian-speaking Eastern regions. We explain these outcomes with reference to the peculiarities of Soviet industrial development, which facilitated the emergence of “oligarchs” in territories housing Soviet-era mega-industries. Our research contributes to comparative debates about the links between economic development and democracy.
    JEL: J1
    Date: 2019–10
  15. By: Fetzer, Thiemo (University of Warwick); Kyburz, Stephan (Center for Global Development)
    Abstract: Can institutionalized transfers of resource rents be a source of civil conflict? Are cohesive institutions better in managing distributive conflicts? We study these questions exploiting exogenous variation in revenue disbursements to local governments together with new data on local democratic institutions in Nigeria. We make three contributions. First, we document the existence of a strong link between rents and conflict far away from the location of the actual resource. Second, we show that distributive conflict is highly organized involving political militias and concentrated in the extent to which local governments are non-cohesive. Third, we show that democratic practice in form having elected local governments significantly weakens the causal link between rents and political violence. We document that elections (vis-a-vis appointments), by producing more cohesive institutions, vastly limit the extent to which distributional conflict between groups breaks out following shocks to the available rents. Throughout, we confirm these findings using individual level survey data.Keywords: conflict, ethnicity, natural resources, political economy, commodity prices. JEL Classification: Q33, O13, N52, R11, L71
    Date: 2018
  16. By: Tomala, Tristan; Koessler, Frederic; Laclau, Marie
    Abstract: We study the interaction between multiple information designers who try to influence the behavior of a set of agents. When the set of messages available to each designer is finite, such games always admit subgame perfect equilibria. When designers produce public information about independent pieces of information, every equilibrium of the direct game (in which the set of messages coincides with the set of states) is an equilibrium with larger (possibly infinite) message sets. The converse is true for a class of Markovian equilibria only. When designers produce information for their own corporation of agents, pure strategy equilibria exist and are characterized via an auxiliary normal form game. In an infinite-horizon multi-period extension of information design games, a feasible outcome which Pareto dominates a more informative equilibrium of the one-period game is supported by an equilibrium of the multi-period game.
    Keywords: Bayesian persuasion; information design; sharing rules; splitting games; statistical experiments.
    JEL: C72 D82
    Date: 2018–04–25

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