nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2018‒09‒10
eighteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Voting on Multiple Issues: What to Put on the Ballot? By Alex Gershkov; Benny Moldovanu; Xianwen Shi
  2. Persistence of Power: Repeated Multilateral Bargaining By Agranov, Marina; Cotton, Christopher; Tergiman, Chloe
  3. The role of Civil Society in the European Integration Process in Kosovo: EU mechanisms and instruments for NGO Sector development By Ardian Kastrati
  4. Migration, Political Institutions, and Social Networks By Catia Batista; Julia Seither; Pedro C. Vicente
  5. The Political Economy of Public Debt: A Laboratory Study By Battaglini, Marco; Nunnari, Salvatore; Palfrey, Thomas R
  6. Legislative Bargaining and Partisan Delegation By Thomas Choate; John A Weymark; Alan E. Wiseman
  7. Office-Holding Premia and Representative Democracy By Jan Auerbach
  8. Integrated Co-cultural Communication Accommodation Strategies By zhaoxun song
  9. Coordination as an Unintended Benefit: Lab-in-the-Field Evidence from a Conditional Cash Transfer Program By Sandra Polania Reyes
  10. On the gamma-core of asymmetric aggregative games By Stamatopoulos, Giorgos
  11. The Political Economy of Patrons, Brokers, and Voters By Gallego, J; Li, C; Wantchekon, L
  12. Living a Lie: Theory and Evidence on Public Preference Falsification By John Duffy; Jonathan Lafky
  13. Race and Gender Affinities in Voting: Experimental Evidence By Penney, Jeffrey; Tolley, Erin; Goodyear-Grant, Elizabeth
  14. The role of collective remittances in community development: the case of Hometown Associations By Barbara Bonciani
  15. Social Influence in Prosocial Behavior:Evidence from a Large-Scale Experiment By Götte, Lorenz; Tripodi, Egon
  16. Heterogeneity, Vetoes, and Exit Clauses in Federal Systems By Martijn Huysmans
  17. Opening Adaptation Windows onto Public Financial Management Reform Gaps in Mozambique By Matt Andrews; Salimah Samji; Tim McNaught
  18. Group-Shift and the Consensus Effect, Second Version By David Dillenberger; Colin Raymond

  1. By: Alex Gershkov; Benny Moldovanu; Xianwen Shi
    Abstract: We study a multi-dimensional collective decision problem under incomplete information. Agents have Euclidean preferences and vote by simple majority on each issue (dimension), yielding the coordinate-wise median. Judicious rotations of the orthogonal axes -- the issues that are voted upon -- lead to welfare improvements. If the agents' types are drawn from a distribution with independent marginals then, under weak conditions, voting on the original issues is not optimal. If the marginals are identical (but not necessarily independent), then voting first on the total sum and next on the differences is often welfare superior to voting on the original issues. We also provide various lower bounds on incentive efficiency: in particular, if agents' types are drawn from a log-concave density with I.I.D. marginals, a second-best voting mechanism attains at least 88% of the first-best efficiency. Finally, we generalize our method and some of our insights to preferences derived from distance functions based on inner products.
    Keywords: Multidimensional Voting, Mechanism Design, Rotation, Strategy-Proof Mechanisms, Budgeting Procedure
    JEL: D82 D72 D78
    Date: 2018–09–05
  2. By: Agranov, Marina; Cotton, Christopher; Tergiman, Chloe
    Abstract: In a variety of settings, budgets are set by a committee that interacts repeatedly over many budget cycles. To capture this, we study a model of repeated multilateral bargaining by a budget committee. Our focus is on the transition of agenda setting power from one cycle to the next, and how such considerations affect bargaining and coalition formation over time. Specifically, we compare a rule that approximates the budget process in many parliamentary democracies in which a vote of confidence is traditionally attached to each budget proposal, and a rule that approximates the budget process in congressional systems where party leadership must maintain the support of a majority of other legislators to hold onto power. As is standard in the literature, we use stationary equilibrium refinements to make predictions about behavior in our environments. In a controlled laboratory experiment, we find no support for the standard equilibrium refinements used in the literature. In sharp contrast to the theoretical predictions, in the experiment, both rules give rise to stable and persistent coalitions in terms of coalition size, identity, and shares of coalition partners and feature high persistence of agenda-setter power. Our results call into question the validity of restricting attention to history independent strategies in dynamic bargaining games. We conclude by showing that weakening the standard equilibria concepts to allow players to condition on one piece of history (the most recent deviator) is enough to generate equilibria which are consistent with outcomes and behavior observed in the experiments.
    Keywords: Financial Economics, Political Economy
    Date: 2016–12
  3. By: Ardian Kastrati (University of Prishtina)
    Abstract: European integration is one of the most demanding processes for Kosovo institutions and society. While citizens of Kosovo overwhelmingly support membership in the European Union, assessment reports specify that Kosovo and its institutions still need serious reform to achieve this goal. The integration process offers mechanisms that civil society namely NGO sector can use in order to monitor and give direct contribution for this process, which could also impact to transform Kosovo institutions and society. The Annual Progress Report of the European Commission requires from governments and institutions of countries aspiring for integration to the EU to pursue sound governance practices that allow civil societies to have an impact on policy and decision-making processes. Relying on this requirement, NGOs can use the process as a way to shape the organization and function in their society and institutions. The role of Kosovo NGO?s whose focus is political activism that tends to increase demands for democratic participation in the political system is very important for Kosovo?s EU Integration process. NGO?s apart from monitoring role towards the Government, they can become one of the main partners for EU Integration Process, especially to the European Commission (EC). The aim of this paper is to analyze the role of NGO?s as part of civil society in the whole process of EU integration and current possibilities for improving their capacities and contributions towards the public policy and decision making process.
    Keywords: NGO Sector, EU Integration in Kosovo, Kosovo Institutions, Decision Making
    JEL: D72
    Date: 2018–07
  4. By: Catia Batista (Universidade Nova de Lisboa, CReAM, IZA and NOVAFRICA); Julia Seither (Universidade Nova de Lisboa, University of California at Berkeley, and NOVAFRICA); Pedro C. Vicente (Universidade Nova de Lisboa, BREAD, and NOVAFRICA)
    Abstract: What is the role of international migrants and, specifically, migrant networks in shaping political attitudes and behavior in migrant sending countries? Our theoretical framework proposes that migration might change individual social identities and thus stimulate intrinsic motivation for political participation, while it may also improve knowledge about better quality political institutions. Hence, international migration might increase political awareness and participation both by migrants and by other individuals in their networks. To test this hypothesis, we use detailed data on different migrant networks (geographic, kinship, and chatting networks), as well as several different measures of political participation and electoral knowledge (self-reports, behavioral, and actual voting measures). These data were purposely collected around the time of the 2009 elections in Mozambique, a country with substantial emigration to neighboring countries – especially South Africa - and with one of the lowest political participation rates in the region. The empirical results show that the number of migrants an individual is in close contact with via regular chatting significantly increases political participation of residents in that village – more so than family links to migrants. Our findings are consistent with both improved knowledge about political processes and increased intrinsic motivation for political participation being transmitted through migrant networks. These results are robust to controlling for self-selection into migration as well as endogenous network formation. Our work is relevant for the many contexts of South-South migration where both countries of origin and destination are recent democracies. It shows that even in this context there may be domestic gains arising from international emigration.
    Keywords: International migration, social networks, political participation, information, diffusion of political norms, governance
    JEL: D72 D83 F22 O15
    Date: 2018–08
  5. By: Battaglini, Marco; Nunnari, Salvatore; Palfrey, Thomas R
    Abstract: This paper reports the results from a laboratory experiment designed to study political distortions in the accumulation of public debt. A legislature bargains over the levels of a public good and of district specific transfers in two periods. The legislature can issue or purchase risk-free bonds in the first period and the level of public debt creates a dynamic linkage across policymaking periods. In line with the theoretical predictions, we find that public policies are inefficient and efficiency is increasing in the size of the majority requirement, with higher investment in public goods and lower debt associated with larger majority requirements. Debt is lower when the probability of a negative shock to the economy in the second period is higher indicating that even in a political equilibrium debt is used to smooth consumption and to insure against political uncertainty. Finally, also in line with the theoretical predictions, we find that dynamic distortions are eliminated independently of the voting rule when the first period majority can commit to a policy for the second period. The experiment however highlights two phenomena that are surprising in terms of standard theory and have not been previously documented. First, balancing the budget in each period is a focal point, leading to lower distortions than predicted. Second, higher majority requirements induce significant delays in reaching an agreement.
    Keywords: Bargaining; Dynamic Political Economy; Laboratory experiments; public debt
    JEL: C78 C92 D71 D72 H41 H54
    Date: 2018–08
  6. By: Thomas Choate (Graduate School of Business, Stanford University); John A Weymark (Department of Economics, Vanderbilt University); Alan E. Wiseman (Department of Political Science, Vanderbilt University)
    Abstract: We use an extension of the Baron–Ferejohn model of legislative bargaining in which there are three legislators, two of whom have partisan ties, to analyze the division of a fixed political resource in a majoritarian legislature. A legislator's preferences depend on the shares that he and any copartisan receive. We ask if there are circumstances under which a partisan legislator is willing to delegate proposal-making authority to a party leader so as to take advantage of the special proposal rights accorded by the legislature to this office rather than retaining equal-recognition proposal rights for himself. We show that this is the case only if (i) the leader's proposal recognition probability is larger than the probability that one of the partisans is recognized when the legislators act independently, (ii) partisan affiliation is sufficiently strong, and (iii) the legislators are sufficiently impatient. The relevance of this result for Aldrich and Rohde's conditional party government thesis and Krehbiel's First Congressional Parties Paradox are considered.
    Keywords: Baron–Ferejohn legislative bargaining, political partisanship, proposal delegation, strong political party
    JEL: F4
    Date: 2018–08–24
  7. By: Jan Auerbach (Department of Economics, University of Exeter)
    Abstract: I consider a policy issue stylized as redistribution in a representative democracy in which holding o ce o ers an income premium. Predominance of high earners in the legislature likely implies that not a single lawmaker shares the policy preferences of lower- income citizens, because it arises in only two ways. First, chance favors high-income candidates while in the majority of districts, the strict majority of political candidates are lower-income citizens, which seems counterfactual. Second, high o ce-holding premia induce legislators from all backgrounds to oppose redistribution once in o ce. Either legislators are recruited from an elite, or some forget where they came from.
    Keywords: Representative Democracy, Legislature, Legislators, Representatives, Repre- sentation, Policy Preferences, Citizen-Candidates, O ce-Holding Premia, Redistribution.
    JEL: D72
    Date: 2018
  8. By: zhaoxun song (Hong Kong Hang Seng Management College)
    Abstract: Communication accommodation theory (CAT) describes the ways that people adjust their behavior while interacting with others, whether that is to gain approval or influence perception. CAT summarizes three adaption strategies: convergence, maintenance, and divergence. Convergence is used when we are seeking to connect with someone and gain their approval and divergence is used when we are trying to distance ourselves from others, seeking to maintain our social identity and voice. Co-cultural theory (CT) explores the communication strategies that non-dominant group members use when interacting within dominant society. CT proposes three preferred outcomes in co-cultural communication process: assimilation, accommodation, or separation. Assimilation means individuals attempt to ?fit in? the dominant group while accommodation means individuals participate in the activities of the dominant group without losing their cultural identity. Separation means that the non-dominant individual resists interactions with the dominant groups. Both CAT and CT are widely applied to the studies of the lived experiences and the communicative interactions employed by members with different cultural backgrounds. The accommodation strategies obtained from the empirical studies using different theories are identical or similar in many ways. However, there are few attempts from scholars to integrate the existing CAT and CT accommodation strategies into a comprehensive and heuristic whole. The aim of this paper, based on a thorough review of the existing CAT and CT literature, is to identify and integrate the relevant accommodation strategies adopted by co-cultural members. The integrated co-cultural communication accommodation strategies will provide a practical theoretical framework for the future researches on the non-dominant group members with different cultural backgrounds in their communication accommodation process.
    Keywords: Communication Accommodation Theory; Co-cultural Theory; Co-cultural Communication Accommodation Strategies
    Date: 2018–07
  9. By: Sandra Polania Reyes
    Abstract: This study tests an unintended benefit of a Conditional cash transfer program in Colombia: an improvement in coordination among its beneficiaries. A sample of 714 beneficiaries participate in a minimum effort coordination game. Those enrolled in the program for over a year are not just coordinating; they are more likely to exert the highest level of effort and reach higher earnings. Collected data is sufficiently rich to establish that improvement in coordination is not due to potential confounding mechanisms such as willingness to cooperate, connectivity or socio-economic characteristics. A structural choice model of the individual decision to coordinate sheds light on the role of beliefs about others’ behavior and suggests the presence of a coordination device to avoid the risk dominant equilibrium: the certainty in assessing what others might do. Participants are required to interact with local program officials, community leaders and fellow beneficiaries. We argue that this social component of the CCT changed the structure of beliefs about others’ behavior, which allowed beneficiaries to overcome coordination failures. The findings support nascent initiatives to influence beliefs through policy interventions.
    Keywords: field experiments, coordination, conditional cash transfer programs, cooperation
    JEL: C92 D70 D78 Z13
    Date: 2018–08–08
  10. By: Stamatopoulos, Giorgos
    Abstract: This paper analyzes the core of cooperative games generated by asymmetric aggregative normal-form games, i.e., games where the payoff of each player depends on his strategy and the sum of the strategies of all players. We assume that each coalition calculates its worth presuming that the outside players stand alone and select individually optimal strategies (Chander & Tulkens 1997). We show that under some mild monotonicity assumptions on payoffs, the resulting cooperative game is balanced, i.e. it has a non-empty gamma-core. Our paper thus offers an existence result for a core notion that is considered quite often in the theory and applications of cooperative games with externalities.
    Keywords: cooperative game; aggregative game; balancedness; core
    JEL: C71
    Date: 2018–08–11
  11. By: Gallego, J; Li, C; Wantchekon, L
    Abstract: Formal models of political clientelism tend to focus on vote buying, the exchange of cash and goods for votes on election day. However, other components of the phenomenon, such as patronage, the exchange of public jobs and contracts for political support, are more important in order to understand the pervasive consequences of clientelism. We develop a game-theoretic model of patronage, in which candidates must decide between broker-mediated electoral strategies versus grassroots campaigns. Our model shows that patronage is more likely when public offices are relatively more valuable for brokers, a condition that is typical of institutional configurations that foster corruption. Moreover, setups that constrain candidates from funding grassroots campaigns and weaken ties between politicians and citizens make broker-mediated campaigns more likely. We show that patronage negatively affects citizens’ welfare, as winning brokers end up being appointed to public office, undermining the quality of civil servants and public goods provision.
    Keywords: Patronage, Clientelism, Corruption, Agency, Grassroots Campaigns
    Date: 2018–08–27
  12. By: John Duffy (Department of Economics, University of California-Irvine); Jonathan Lafky (Carleton College)
    Abstract: We propose a model of how public behavior changes in response to the evolution of privately held preferences. Our aim is to rationalize the tendency for individuals who hold minority viewpoints to falsely report their preferences by taking actions favored by the majority. We do this using a game involving a tension between honest expression of one's true preferences and a desire to conform to the behavior of others. In an experimental test of our model, we find confirmatory support for the model's main predictions, that even after a majority of the population shares what was previously an unpopular minority opinion, a lack of mutual awareness among members of the new majority can allow continued public support for the old status quo, and that the onset and speed of transitions to new, majority-held opinions depend on the relative difference in rewards from conformity versus truthful expression.
    Keywords: Conflict; conformity; social change; hypocrisy; insincerity; groupthink; pluralistic ignorance; preference falsification; experimental economics
    JEL: C92 D74 D82 D83
    Date: 2018–08
  13. By: Penney, Jeffrey; Tolley, Erin; Goodyear-Grant, Elizabeth
    Abstract: We analyze the results of a large-scale experiment wherein subjects participate in a hypothetical primary election and must choose between two fictional candidates who vary by sex and race. We find evidence of affnities along these dimensions in voting behaviour. A number of phenomena regarding these affnities and their interactions are detailed and explored. We find that they compete with each other on the basis of race and gender. Neuroeconomic metrics suggest that people who vote for own race candidates tend to rely more on heuristics than those who do not.
    Keywords: Financial Economics, Public Economics
    Date: 2016–10
  14. By: Barbara Bonciani (CNR-IRCRES, National Research Council, Research Institute on Sustainable Economic Growth, via Real Collegio 30, Moncalieri (TO) – Italy and Department of Civilization and Form of Knowledge, University of Pisa, Via Paoli 15, Pisa – Italy)
    Abstract: Remittances to developing countries exceeded $438 billions in 2015[1]. This amount is three times larger than overseas development assistance. Those flows have become an important source of money in these countries, playing a key role in the survival strategy of many people. Differently to personal remittance flows spent on household expenditures for consumption purposes, collective remittances are used for investment in social and productive projects in the villages or municipalities of origin. This paper explores the role of Hometown Associations (HTAs) as new actors in transnational funding strategies within collective remittance management. HTAs are involved in various community projects ranging from building of infrastructures to social benefits, with potential beneficial effects on the community of origin. In recent years, different subjects engaged in development issues have shown their interest in working in partnership with HTAs. The strength of the development programmes managed by HTAs derives by several factors, such as their knowledge of local needs and the capabilities of harmonizing local demand with support programmes. In spite of this, there are still some obstacles that need to be overcome to improve their full potential as agents of development. In this framework, both Governments and International organizations can play an important role in supporting HTAs to improve their organizational and technical capabilities.
    Keywords: Collective remittances, local development, Hometown associations, cultural identity, governance
    JEL: J6 J15
    Date: 2018–01
  15. By: Götte, Lorenz; Tripodi, Egon
    Abstract: We propose an experiment that prevents social learning and allows to disentangle mechanisms of social influence. Subjects observe another individual's incentives, but not their behavior. We find conformity: when individuals believe that incentives make others contribute more, they also increase their contributions. Conformity is driven by individuals who feel socially close to their partner. However, when incentives don't raise others' contributions, individuals reduce contributions. This pattern cannot be explained by incentive inequality (Breza et al., 2017). We conclude that norm adherence is weakened when incentives are ineffective. Our results show that information about others' economic environment generates social influence
    Keywords: Online Experiment; prosocial behavior; social influence
    Date: 2018–07
  16. By: Martijn Huysmans
    Abstract: The vast majority of federations lack exit clauses. Existing theoretical explanations of this stylized fact focus on issues of credible commitment, signaling, and the risk of strategic exploitation. However, such accounts are unable to explain the adoption by the European Union (EU) of Article 50, which allows withdrawal. I contend and demonstrate empirically that in the case of the EU, an exit-voice logic lies at the basis of Article 50. More generally, in heterogeneous (quasi-)federations formed through voluntary accession, prospective members may require an exit right in order to join, especially if they will not have a veto against policy changes. This hypothesis is borne out empirically by a probit regression on the positions of 94 delegates at the European Convention, which shows that heterogeneity drove support for an exit right.
    Keywords: exit, withdrawal, secession, federalism, European Union
    JEL: D70 H77 P48
    Date: 2018
  17. By: Matt Andrews (Center for International Development at Harvard University); Salimah Samji (Center for International Development at Harvard University); Tim McNaught (Center for International Development at Harvard University)
    Abstract: Governments across the world regularly pursue reforms that achieve less than was originally expected or is needed to make the state function better. The limits to reform success are often obvious in even the early days of reform, where gaps and weaknesses manifest. Many governments have no mechanisms built into their reform processes to see these gaps and weaknesses, however, and persist with predefined reform plans instead of adapting designs to close the gaps and address weaknesses. One antidote to this challenge is to create reflection points where reformers scrutinize their progress to identify weaknesses, reflect on these weaknesses, and adapt their next steps to address the weaknesses. In the spirit of John Kingdon’s work on ‘policy windows’, we call these reflection points ‘adaptation windows’—moments where reformers acknowledge problems in their reforms, adapt reforms to address such, and mobilize support for this adaptation. This paper discusses an effort to open an adaptation window for reformers to ‘see’ and then respond to public financial management (PFM) reform gaps and weaknesses in Mozambique. The paper details why and how this work was pursued, and also reflects on results of the government’s reflection at the adaptation window.
    Keywords: Mozambique, PFM
    Date: 2018–05
  18. By: David Dillenberger (Department of Economics, University of Pennsylvania); Colin Raymond (Department of Economics, Amherst University)
    Abstract: Individuals often tend to conform to the choices of others in group decisions, compared to choices made in isolation, giving rise to phenomena such as group polarization and the bandwagon effect. We show that this behavior, which we term the consensus effect, is equivalent to a well-known violation of expected utility, namely strict quasi-convexity of preferences. In contrast to the equilibrium outcome when individuals are expected utility maximizers, quasi-convexity of preferences imply that group decisions may fail to properly aggregate preferences and strictly Pareto-dominated equilibria may arise. Moreover, these problems become more severe as the size of the group grows.
    Keywords: Aggregation of Preferences, Choice Shifts in Groups, Consensus Effect, Non-Expected Utility, Quasi-Convex Preferences
    JEL: D71 D81
    Date: 2016–09–30

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