nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2018‒10‒01
fourteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Immigration and far-right voting: Evidence from Greece By Chletsos, Michael; Roupakias, Stelios
  2. Liberal Radicalism: Formal Rules for a Society Neutral among Communities By Vitalik Buterin; Zoe Hitzig; E. Glen Weyl
  3. How to model fake news By Dorje C. Brody; David M. Meier
  4. Political Openness and Armed Conflict: Evidence from Local Councils in Colombia By Hector Galindo Silva
  5. A Dynamic Model of Political Party Equilibrium: The Evolution of ENP in Canada, 1870–2011 By J. Stephen Ferris; Stanley L. Winer; Derek Olmstead
  6. Common ranking and stability of overlapping coalitions By MAULEON Ana,; ROEHL Nils,; VANNETELBOSCH Vincent,
  7. Power values and framing in game theory By Mágó, Mánuel
  8. Essays on risk exchanges within a collective By Pazdera, Jaroslav
  9. R&D network formation with myopic and farsighted firms By MAULEON Ana,; SEMPERE-MONERRIS Jose J.,; VANNETELBOSCH Vincent,
  10. Economic Performance and Electoral Volatility: Testing the Economic Voting Hypothesis on Indian States, 1957–2013 By Bharatee Bhusana Dash; J. Stephen Ferris
  11. Exploring the key issues and stakeholders associated with the application of rainwater systems within the Amazon Region By Pedro Pablo Cardoso; Andrew Swan; Ronaldo Mendes
  12. Measuring Electoral Competitiveness: With Application to the Indian States By Bharatee Bhusana Dash; J. Stephen Ferris; Stanley L. Winer
  13. Political parties and climate change policy: why do parties sometimes talk about it, but sometimes keep silent By Baiba Witajewska-Baltvilka
  14. Repeated Coordination with Private Learning By Pathikrit Basu; Kalyan Chatterjee; Tetsuya Hoshino; Omer Tamuz

  1. By: Chletsos, Michael; Roupakias, Stelios
    Abstract: In this paper we analyze the impact of immigration on Greek politics over the 2004-2012 period, exploiting panel data on 51 Greek regional units. We account for potential endogenous clustering of migrants into more “tolerant” regions by using a shift-share imputed instrument, based on their allocation in 1991. Overall, our results are consistent with idea that immigration is positively associated with the vote share of extreme-right parties. This finding appears to be robust to alternative controls, sample restrictions and different estimation methods. We do not find supportive evidence for the conjecture that natives “vote with their feet”, i.e. move away from regions with high immigrant concentrations. We also find that the political success of the far-right comes at the expense of “Leftist” parties. Importantly, concerns on criminality and competition for jobs and public resources appear to drive our findings.
    Keywords: Immigration, Elections, Political economy
    JEL: D72 J15 J61
    Date: 2018–08–18
  2. By: Vitalik Buterin; Zoe Hitzig; E. Glen Weyl
    Abstract: We propose a design for philanthropic or publicly-funded seeding to allow (near) optimal provision of a decentralized, self-organizing ecosystem of public goods. The concept extends ideas from Quadratic Voting to a funding mechanism for endogenous community formation. Individuals make public goods contributions to projects of value to them. The amount received by the project is (proportional to) the square of the sum of the square roots of contributions received. Under the "standard model" this yields first best public goods provision. Variations can limit the cost, help protect against collusion and aid coordination. We discuss applications to campaign finance, open source software ecosystems, news media finance and urban public projects. More broadly, we offer a resolution to the classic liberal-communitarian debate in political philosophy by providing neutral and non-authoritarian rules that nonetheless support collective organization.
    Date: 2018–09
  3. By: Dorje C. Brody; David M. Meier
    Abstract: Over the past three years it has become evident that fake news is a danger to democracy. However, until now there has been no clear understanding of how to define fake news, much less how to model it. This paper addresses both these issues. A definition of fake news is given, and two approaches for the modelling of fake news and its impact in elections and referendums are introduced. The first approach, based on the idea of a representative voter, is shown to be suitable to obtain a qualitative understanding of phenomena associated with fake news at a macroscopic level. The second approach, based on the idea of an election microstructure, describes the collective behaviour of the electorate by modelling the voting preferences of individual members of the electorate. It is shown through a simulation study that the mere knowledge that pieces of fake news may be in circulation goes a long way towards mitigating the impact of fake news.
    Date: 2018–09
  4. By: Hector Galindo Silva
    Abstract: In this paper, I empirically investigate how openness of political institutions to diverse representation can impact con ict-related violence. By exploiting plausibly exogenous variations in the number of councillors in Colombian municipalities, I develop two sets of results. First, regression discontinuity estimates show that larger municipal councils have a considerably greater number of political parties with at least one elected representative. I interpret this result as evidence that larger municipal councils are more open to political participation by more groups in society. The estimates also reveal that smaller parties are the main bene ciaries of this greater political openness. Second, regression discontinuity estimates show that political openness substantially decreases con ict-related violence, namely the killing of civilian non-combatants. By exploiting plausibly exogenous variations in local election results, I show that the lower level of political violence stems from greater participation by parties with close links to armed groups. Using data about the types of violence employed by these groups, the provision of local public goods, scal outcomes and coca cultivation, Iargue that armed violence has decreased not because of power-sharing arrangements between the armed groups linked to the parties with more political representation, but rather because armed groups with less political power and visibility are deterred from initiating certain types of violence.
    Keywords: Political openness, violence and armed conflict, councils
    JEL: H72 D72
    Date: 2018–09–04
  5. By: J. Stephen Ferris (Department of Economics, Carleton University); Stanley L. Winer (Department of Economics, Carleton University); Derek Olmstead (Department of Economics, Carleton University)
    Abstract: The effective number of political parties (ENP) in a first-past-the-post single member (SMP) electoral system is analyzed as a dynamic process whereby the tournament nature of the election contest induces excessive entry and sunk entry costs promote persistence even as Duverger-Demsetz type political competition works to winnow unsuccessful minor candidates and parties. The result is a fringe of ever changing marginal parties circulating in long run equilibrium. The factors hypothesized to affect the entry and exit of candidates and parties are analyzed first using an auto-regressive distributed lag (ARDL) model whose advantage is that it allows the separation of an evolving long run equilibrium from short run variations in response to transitory changes in conditioning variables and the process of converging back to the long run equilibrium. The possibility that the short run adjustment process is asymmetric either for parties or candidates is tested using panel estimation techniques.The results are consistent with an observed time path that incorporates slower adjustment to positive as opposed to negative shocks. Variations in the size and trend of both the long and short run are then examined for ENP’s ability to predict changes in the competitiveness of the Canadian federal electoral system.
    Keywords: Expected number of political parties, entry and exit, Duverger’s Law, asymmetric adjustment, ARDL and NARDL modeling
    JEL: D72 C41 C24
    Date: 2018–02–15
  6. By: MAULEON Ana, (Université Saint-Louis Bruxelles and CORE); ROEHL Nils, (University of Paderborn); VANNETELBOSCH Vincent, (CORE, Université catholique de Louvain)
    Abstract: Mauleon, Roehl and Vannetelbosch (GEB, 2018) develop a general theoretical framework to study the stability of overlapping coalition settings. Each group possesses a constitution that contains the rules governing both the composition of the group and the conditions needed to leave the group and/or to become a new member of the group. They propose the concept of constitutional stability to study the group structures that are going to emerge at equilibrium in overlapping coalition settings. They combine requirements on constitutions and preferences for guaranteeing both the existence and the emergence of constitutionally stable group structures. In this paper, we show that an alternative way to exclude the ocurrence of closed cycles is to look for constitutions that allow for a common ranking.
    Keywords: overlapping coalitions, group structures, constitutions, stability, common ranking
    JEL: C72 C78 D85
    Date: 2018–09–05
  7. By: Mágó, Mánuel (Tilburg University, School of Economics and Management)
    Abstract: This dissertation consists of five chapters and covers three topics, all in the broader field of game theory. There are three main chapters. In Chapter 3 the focus is on power measures, functions that assign a power to every node in any graph. The connectivity power measure is introduced and characterized on the class of graphs. The connectivity power measure assigns to every node in any graph the number of connected sets the node is a part of. Chapter 4 focuses on graph games, cooperative games with cooperation restricted by communication networks represented by graphs. The average connected contribution value and the larger family of power values are introduced and axiomatized on the class of graph games. The average connected contribution value of a player in a graph game is defined as the average of the player's marginal contributions in connected coalitions the player is a part of. In Chapter 5 a new framing of the well-studied prisoner’s dilemma game is introduced. The new framing is achieved by representing the game in an unconventional way by telling players that they are deciding what their opponents have to do. It is shown in a laboratory experiment that the framing affects the decisions of subjects.
    Date: 2018
  8. By: Pazdera, Jaroslav (Tilburg University, School of Economics and Management)
    Abstract: This thesis considers a group of investors who have joined their endowments and formed a collective. The collective is assumed to construct an internal (intra-group) market where its members can exchange assets (trade) under conditions that can be different to those that prevail outside of the collective. Two chapters of this thesis focus on the intra-group trades that are both financially fair and Pareto efficient. There are formulated conditions under which there exists a unique set of financially fair and Pareto efficient intra-group trades (redistribution). The results of these chapters were published in Journal of Mathematical Economics and in Insurance: Mathematics and Economics. The last chapter considers a collective in a setting where there are bid-ask spreads on an extra-group market and the collective is free to use its intra-group market. In this setting, we define an equilibrium similar to the competitive equilibria, and we investigate under which bid-ask spreads is the intra-group market superuous or, to the contrary, when the intra-group market can accommodate all equilibrium trades. The chapter also proposes a measure of tendency to trade internally” and offers a link with the term “group heterogeneity”.
    Date: 2018
  9. By: MAULEON Ana, (Université Saint-Louis Bruxelles and CORE); SEMPERE-MONERRIS Jose J., (University of Valencia); VANNETELBOSCH Vincent, (CORE, Université catholique de Louvain)
    Abstract: We study the formation of R&D networks when each firrm benefits from the research done by other firms it is connected to. Firms can be either myopic or farsighted when deciding about the links they want to form. We propose the notion of myopic-farsighted stable set to determine the R&D networks that emerge in the long run. When the majority of firms is myopic, stability leads to R&D networks consisting of either two asymmetric components with the largest component comprises three-quarters of firms or two symmetric components of nearly equal size with the largest component having only myopic firms. But, once the majority of firms becomes farsighted, only R&D networks with two asymmetric components remain stable. Firms in the largest component obtain greater profits, with farsighted firms having in average more collaborations than myopic firms that are either loose-ends or central for spreading the innovation within the component. Besides myopic and farsighted -firms, we introduce yes-firms that always accept the formation of any link and never delete a link subject to the constraint of non-negative profits. We show that yes-firms can stabilize R&D networks consisting of a single component that maximize the social welfare. Finally, we look at the evolution of R&D networks and we find that R&D networks with two symmetric components will be rapidly dismantled, single component R&D networks will persist many periods, while R&D networks consisting of two asymmetric components will persist forever.
    Keywords: networks, R&D collaborations, oligopoly, myopia, farsightedness
    JEL: C70 L13 L20
    Date: 2018–09–05
  10. By: Bharatee Bhusana Dash (National Institute of Public Finance and Policy, (NIPFP) New Delhi, India); J. Stephen Ferris (Department of Economics, Carleton University)
    Abstract: The electoral consequences of variations in economic growth on vote volatility are analyzed on a panel of fourteen Indian states between 1957 and 2013. Two measures of volatility are used: first changes in party vote shares at the assembly level and the state average of volatilities constructed at the constituency level. While the results suggest that both volatilities are reduced by higher income growth rates, volatility at the constituency level is found to be somewhat more sensitive to growth rates. Examination of the periodicity of income growth’s impact finds that the growth rate in the final year of governance has a stronger effect on volatility than does the average income growth rate arising over the entire election cycle. We also find that vote switching responds more to negative rather than positive growth changes and, by decomposing volatility, find that growth changes affect internal vote shifting more than between established parties and new comers. More generally the responsiveness of volatility to set of economic and political characteristics of the state suggests that theories of economic voting have an important role to play in understanding electoral outcomes and hence the process of development
    Keywords: Vote volatility, Economic voting, Indian States, Political business cycle, growth asymmetries
    JEL: D72 O11 O43 R11
    Date: 2018–06–28
  11. By: Pedro Pablo Cardoso (Leeds Beckett University); Andrew Swan (Leeds Beckett University); Ronaldo Mendes (Federal University of Para - Universidade Federal do Para [Belem - Brésil])
    Abstract: This paper presents a case study from the Amazon region of Brazil that explores stakeholder influence over the design and implementation of rainwater harvesting systems. This explorative study is based on the application of Social Network Analysis (SNA). A series of interviews were undertaken with experts in the field and the data was coded and analysed. A stakeholder's map is presented in an attempt to summarise the study's main findings and to graphically illustrate the key stakeholder influences. The primary outcome of this exercise was the identification of the key participants and challenges associated with the implementation of rainwater harvesting systems. This exercise also highlighted the lack of interaction between some stakeholders and the canalization of decision-making powers by a small number of agencies. The scope of the study was limited to a specific geographical region and is therefore context specific. Due to the constraints of this preliminary study, the full potential of SNA has not fully been explored in this analysis. The research has identified some redundancies with regards to the management of water in this region. It has also highlighted other issues associated with 'lack of inclusion' within the decision-making process and planning for the implementation of rainwater systems. The study is considered to be novel within this geographical region. The use of such methods to map stakeholders and to graphically represent influential relationships, as well as the identification of previously unseen key actors should aid future attempts to implement rainwater harvesting schemes within this context.
    Keywords: Water management,Rainwater harvesting systems,Social Network Analysis
    Date: 2018–06–29
  12. By: Bharatee Bhusana Dash (National Institute of Public Finance and Policy, (NIPFP) New Delhi, India); J. Stephen Ferris (Department of Economics, Carleton University); Stanley L. Winer (Department of Economics, Carleton University)
    Abstract: We consider alternative methods of measuring the competitiveness of a majoritarian electoral system in the context of an analysis of Indian State elections. Our analysis highlights a number of weaknesses in the construction and interpretation of commonly used measures such as the effective number of parties, the first versus second place vote margin and safe seats, while presenting these and their proposed alternatives for 14 major Indian states from 1952 to 2009. The alternative indexes we present are based in part on ideas that are longstanding in the literature but have not been fully adopted within the Indian context. These indexes incorporate vote volatility, allow for multi-party competition at the constituency level, and adjust for asymmetry among parties of safe seats in the legislature. We argue that these newly computed indexes capture distinct but related dimensions of electoral competition better than do the extant commonly used measures. The analysis of these indexes is then extended to consider the role of caste, class, regionalism and level of development to reveal interesting patterns of commonality and difference in electoral competition across the states.
    Keywords: electoral competitiveness, effective number of parties and Tpartyness, volatility adjusted vote margins, asymmetry adjusted safe seats, Indian states, caste and class
    JEL: A12 D02 D72 O1
    Date: 2018–07–07
  13. By: Baiba Witajewska-Baltvilka
    Abstract: The paper studies the factors that shape party issue competition on climate change and environmentalism. It covers the quantitative study on political parties' positions in 22 European countries during electoral campaigns between 1990 and 2016, as well as two case studies: Polish electoral campaign in 2011 and German electoral campaign in 2013. The paper concludes that more favourable public opinion towards environment, lower socio-economic inequality and weaker trade unions are associated with high party competition on climate change and environmentalism.
    Keywords: party competition, issue salience, climate change, environmentalism, elections
    JEL: C33 Q50 Q58
    Date: 2018–09
  14. By: Pathikrit Basu; Kalyan Chatterjee; Tetsuya Hoshino; Omer Tamuz
    Abstract: We study a repeated game with payoff externalities and observable actions where two players receive information over time about an underlying payoff-relevant state, and strategically coordinate their actions. Players learn about the true state from private signals, as well as the actions of others. They commonly learn the true state (Cripps et al., 2008), but do not coordinate in every equilibrium. We show that there exist stable equilibria in which players can overcome unfavorable signal realizations and eventually coordinate on the correct action, for any discount factor. For high discount factors, we show that in addition players can also achieve efficient payoffs.
    Date: 2018–08

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