nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2018‒10‒08
thirteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Testing the improved third vote during the 2018 election of the Karlsruhe Institute of Technology student parliament By Tangian, Andranik S.
  2. Voter Turnout and Intergenerational Redistribution By Michael Klien; Mickael Melki; Andrew Pickering
  3. Backlash in Attitudes After the Election of Extreme Political Parties By Magnus Carlsson; Gordon B. Dahl; Dan-Olof Rooth
  4. Strategic Voting when Participation is Costly By Dimitrios Xefteris
  5. Institutional flexibility, political alternation and middle-of-the-road policies By Ascensión Andina Díaz; Francesco Feri; Miguel A. Meléndez-Jiménez
  6. Small firms in the sustainable transformation of food industry: entangling entrepreneurship and activism in grassroots innovation processes By Emilie Lanciano; Séverine Saleilles
  7. Political Competitiveness and Fiscal Structure: A Time Series Analysis. Canada, 1870 - 2015 By J Stephen Ferris; Stanley L. Winer
  8. Not Welcome Anymore: The Effect of Electoral Incentives on the Reception of Refugees By Matteo Gamalerio
  9. Personal And Social Proximity: Shaping Leadership In A Free Software Project By Clement Bert-Erboul; Nicholas S. Vonortas
  10. Measuring Electoral Competitiveness: With Application to the Indian States By Bharatee Bhusana, Ferris, J Stephen Dash; Stanley L. Winer
  11. Independent women: Shareholders in the age of the suffragettes By Acheson, Graeme G.; Campbell, Gareth; Gallagher, Áine; Turner, John D.
  12. Social Networks and Entrepreneurship. Evidence from a Historical Episode of Industrialization By Javier Mejia
  13. Blocking Coalitions and Fairness in Asset Markets and Asymmetric Information Economies By Anuj Bhowmik; Maria Gabriella Graziano

  1. By: Tangian, Andranik S.
    Abstract: Under the "Third Vote" method, the voters cast no votes but are asked about their preferences on policy issues as declared in the party manifestos (like in voting advice applications, e.g. German Wahl-O-Mat). Then the policy profile of the electorate with the balance of public opinion on every issue is determined. The degree to which the parties match with it is expressed by the parties' representativeness indices of popularity (the average percentage of electors represented on all the issues) and universality (the percentage of cases when a majority is represented), and the parliament seats are distributed among the parties in proportion to their indices. The voters are no longer swayed by politicians' charisma and communication skills but are directed to subject matters behind personal images and ideological symbols. The focus on choice properties (e.g., political and economic implications of Brexit) is supposed to make vote more rational and responsible and representative democracy "more representative" and "more democratic". This method has been approbated during the 2016 and 2017 elections of the Karlsruhe Institute of Technology (KIT) Student Parliament (StuPa). The 2016 experiment showed that the method increased the parliament's representativeness but also revealed that the critical point was the selection of questions by the election committee. Indeed, they can be favorable for one party and unfavorable for another, or they can poorly discriminate between the parties, finally causing an equalization of sizes of the party factions in the parliament (regarded by some as the method's malfunction). These problems were tackled in the 2017 experiment. The eligible parties were asked to formulate questions themselves and to answer all of them, including the questions by other parties. The collected 94 questions were reduced to 25 using a model aimed at contrasting as much as possible between the parties by maximizing the total distance between the vectors which characterized their policy profiles. Thereby, the accusation of partiality in the question selection was avoided, the gain in the parliament representativeness was confirmed, but the equalization effect was still persistent. The 2018 experiment has three distinctions. Firstly, we use an advanced model to reduce the list of questions. It enhances the multi-dimensionality of the set of parties' policy profiles aimed at covering the policy space most evenly. For this purpose, the least squares criterion is applied to principal component variances of the correlation or distance matrices for the parties' policy profiles. Then the reduced set of questions results in a ball-shaped "cloud" of parties' policy profiles rather than in a stretched ellipsoid, as in the 2017 experiment. Secondly, we test several variants of the Third Vote, using different optimization models to select questions, and compare their impact on the representativeness of the parliament elected. It turns out that the StuPa is by far most representative if elected by the third votes based on the questions selected using the advanced criterion, and this superiority is observed for all groups of electors considered in the experiment. Thirdly, we tackle the Third Vote's equalization effect. For this purpose, we reduce the party indices, retaining only their part beyond the threshold between representative and nonrepresentative values. The parliament reallocated in proportion to the reduced indices has a similar faction ratio as the one elected by party name, is still more representative than the latter, but less representative than the one allocated in proportion to the complete indices. This means that the optimal proportional representation of public preferences leads to a certain equalization of party factions. Consequently, the equalization effect should not be regarded harmful; it can be tackled, if desired, but at the price of reducing the gain in the parliament representativeness.
    Keywords: policy representation,representative democracy,direct democracy,elections,coalitions,theory of voting
    JEL: D71
    Date: 2018
  2. By: Michael Klien; Mickael Melki; Andrew Pickering
    Abstract: Electoral reforms that lead to reduced turnout modify the composition of the electorate, potentially overrepresenting specific interests in policy implementation. Intergenerational redistribution tilts in favor of the elderly when they are sufficiently numerous, but in favor of the young rich otherwise. We exploit a natural experiment provided by the repeal of compulsory voting in Austrian parliamentary elections to study how exogenous turnout decline affects intergenerational redistribution through pro-young public education spending in Austrian municipalities. Empirically, education spending falls when the proportion of elderly voters exceeds 21% of the electorate, but rises when the proportion of elderly voters is below this threshold.
    Keywords: Voter turnout, Education spending, Compulsory voting, Intergenerational conflict.
    JEL: I2 J1 D72
    Date: 2018–10
  3. By: Magnus Carlsson; Gordon B. Dahl; Dan-Olof Rooth
    Abstract: Far-right and far-left parties by definition occupy the fringes of politics, with policy proposals outside the mainstream. This paper asks how public attitudes about such policies respond once an extreme party increases their political representation at the local level. We study attitudes towards the signature policies of two radical populist parties in Sweden, one from the right and one from the left, using panel data from 290 municipal election districts. To identify causal effects, we take advantage of large nonlinearities in the function which assigns council seats, comparing otherwise similar elections where a party either barely wins or loses an additional seat. We estimate that a one seat increase for the far-right, anti-immigration party decreases negative attitudes towards immigration by 4.1 percentage points, in opposition to the party’s policy position. Likewise, when a far-left, anti-capitalist party politician gets elected, support for a six hour workday falls by 2.7 percentage points. Mirroring these attitudinal changes, the far-right and far-left parties have no incumbency advantage in the next election. Exploring possible mechanisms, we find evidence that when the anti-immigrant party wins a marginal seat, they experience higher levels of politician turnover before the next election and receive negative coverage in local newspapers. These findings demonstrate that political representation can cause an attitudinal backlash as fringe parties and their ideas are placed under closer scrutiny.
    Keywords: political backlash, far-right and far-left parties, public attitudes
    JEL: D72 H70
    Date: 2018
  4. By: Dimitrios Xefteris
    Abstract: We study a general multiparty model of plurality rule elections with costly participation, and prove that strategic voting -that is, situations in which some voters abandon their most preferred alternative and vote strategically for the serious contender they like most- may emerge in equilibrium; just like when participation is costless/compulsory (Palfrey, 1988). This is contrary to recent claims that strategic voting cannot occur when participation is costly (e.g. Arzumanyan and Polborn, 2017) and establishes that the Duverger’s psychological effect is present in a much larger set of cases than currently believed.
    Keywords: Multiparty elections; plurality rule; costly voting; Duverger’s law; strategic voting
    JEL: D71 D72
    Date: 2018–09
  5. By: Ascensión Andina Díaz (Department of Economics, University of Málaga); Francesco Feri (Department of Economics, Royal Holloway, University of London); Miguel A. Meléndez-Jiménez (Department of Economics, University of Málaga)
    Abstract: Empirical observation shows that policies are usually gradually introduced in a society. This paper presents a model of repeated elections that captures this phenomenon, and that allows countries to differ in their institutional flexibility, thus in the speed of implementation of new policies. We show that with gradual implementation of policies there is an incentive for the voters to vote, each election, to a different party. Hence, our model produces equilibria with alternation. We further show that there is a tradeoff between efficiency and stability, with efficiency requiring moderate policies and stability pushing towards polarization. Last, we show that except for the partisan equilibria, the most stable ones convey policies that are bounded away from both the median and the extremes, with policies polarizing more when institutions are either too flexible or sufficiently rigid.
    Keywords: gradual implementation of policies; political alternation; polarization and moderation; efficiency; robustness
    JEL: D02 D72
    Date: 2018–09
  6. By: Emilie Lanciano (COACTIS - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet [Saint-Étienne]); Séverine Saleilles (SAF - Laboratoire de Sciences Actuarielle et Financière - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon)
    Abstract: The literature in Social Movement Theory, Organization Studies and Entrepreneurship emphasizes on the linkages between social movement action and economic organization. Indeed, social entrepreneurship and social movement studies tend to be more and more linked: activists and social entrepreneurs do not represent separate and distinct actors with different logics of action, but tend to transfer their tactics, such as framing, mobilization, protest and negation. This paper explores how activism and entrepreneurship can be combined in an innovative way by small firms in order to contribute to an industry's transformation towards sustainable development. We specially investigate the field of food industry and Alternative Food Networks. In a context of growing interest and sensitivity towards more sustainable food models, how do small firms combine activism and entrepreneurship to frame grassroots innovation processes and translate this frame into organizational model?
    Date: 2017–08
  7. By: J Stephen Ferris; Stanley L. Winer
    Abstract: We investigate the extent to which the intensity of political competition moderates the governance issues that arise in relation to Canada’s fiscal structure. By fiscal structure we mean three distinct but interrelated fiscal dimensions of the state: financial stability, long run size and short run interventions into the private economy with respect to the business cycle. The paper is distinctive in focusing on four measures of political competitiveness that reflect the degree of competition in and between national parliamentary elections: the size of the majority of the governing party in the House; the distribution of the volatility adjusted winning margins of the governing party; the proportion of electorally marginal constituencies adjusted for asymmetry between parties; and a multiparty measure of the competitiveness of elections at the constituency level. The analysis accounts for the differing time series properties of the political and economic variables and the comingling of long and short term fiscal policies in the time series data. Estimation using a sequence of ARDL models indicates that greater political competition enhances fiscal stability, speeds up convergence of government size from above on fundamentals, and helps to align fiscal deficits better with the business cycle. The potential quantitative impact of more intense electoral competition is analyzed by applying the deficit model to the period of fiscal instability that arose in the 1980’s and early 1990’s.
    Keywords: political competition, electoral competition, fiscal stability, budget composition, expenditure and tax size, debt and deficits, countercyclical policy, ARDL modeling
    JEL: D72 D78 H30 H50
    Date: 2018
  8. By: Matteo Gamalerio
    Abstract: Do electoral incentives affect immigration policies? I study this question in the setting of Italian municipalities making decisions about the reception of refugees. The localized control of the reception policy (SPRAR), combined with the exogenous timing of policy decisions and staggered elections, enables me to study the effect of electoral incentives on the reception of refugees. Although municipalities receive fiscal grants for hosting refugees, electoral incentives reduce the probability of opening a refugee centre by 24 per cent. The effect is driven by voters' misperception of immigrants and by extreme-right political preferences. The results explain why is difficult to reach an equal redistribution of refugees across and within countries.
    Keywords: migration, reception of refugees, electoral incentives, fiscal grants
    JEL: R23 J61 D72 C23
    Date: 2018
  9. By: Clement Bert-Erboul (University of Campinas); Nicholas S. Vonortas (National Research University Higher School of Economics)
    Abstract: Open software projects are usually portrayed by focusing on charismatic leaders, friendly communities, and meritocratic language. We dig under the surface of this stereotypical picture and analyse the social relationships of the people involved; specifically, whether they are related through personal proximity or they are distant social partners. We contribute to the literature on free/open source innovation in three ways. First, we highlight the continuum of roles played by individual leaders in the open source project, as brokers and/or initiators. Second, we delve deeper in the social networks of the Videolan software community to layout where and how leaders are organised in groups and play the role of brokers and initiators. We study leadership emergence over time by taking into account the context of activities. Finally, we produce a typology of three Videolan communities with specific social networks that evolved over time in terms of leaders and social structure
    Keywords: Open source, community, leadership, social network, proximity, computer software
    JEL: D90 L86
    Date: 2018
  10. By: Bharatee Bhusana, Ferris, J Stephen Dash; Stanley L. Winer
    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 competition, effective number of parties and Tpartyness, volatility adjusted vote margins, asymmetry adjusted safe seats, Indian states, caste and class
    JEL: A12 D02 D72 O10
    Date: 2018
  11. By: Acheson, Graeme G.; Campbell, Gareth; Gallagher, Áine; Turner, John D.
    Abstract: The early twentieth century saw an increasingly vocal movement which campaigned for women to be able to exercise their political voices independently of men. This coincided with more women participating directly in the stock market. In this paper we analyse whether these female shareholders acted independently of men. We reject the hypothesis that they were heavily influenced by male associates. Using a novel dataset of 500,000 shareholders in some of the largest British railways, we find that women were much more likely to be solo shareholders than men. There is also evidence that they prioritised their independence above other considerations such as where they invested or how diversified they could be. However, we find that they were deliberately excluded from being eligible for election to boards of directors.
    Keywords: Gender,Investment,Stock Market,Railways
    JEL: G10 J16 N23
    Date: 2018
  12. By: Javier Mejia (Division of Social Science)
    Abstract: This paper explores the relationship between social networks and entrepreneurship by constructing a dynamic social network from archival records. The network corresponds to the elite of a society in transition to modernity, characterized by difficult geographical conditions, market failures, and weak state capacity, as in late 19th- and early 20th-century Antioquia (Colombia). With these data, I estimate how the decision to found industrial firms related to the position of individuals in the social network. I find that individuals more important bridging the network (i.e. with higher betweenness centrality) were more involved in industrial entrepreneurship. However, I do not find individuals with a denser network to be more involved in this type of activity. The rationale of these results is that industrial entrepreneurship was a highly-complex activity that required a wide variety of complementary resources. Networks operated as substitutes for markets in the acquisition of these resources. Thus, individuals with network positions that favored the combination of a broad set of resources had a comparative advantage in industrial entrepreneurship. I run several tests to prove this rationale.
    Date: 2018–09
  13. By: Anuj Bhowmik (Indira Gandhi Institute of Development); Maria Gabriella Graziano (Università di Napoli Federico II and CSEF)
    Abstract: This paper analyses two properties of the core in a two-period exchange economy under uncertainty: the veto power of arbitrary sized coalitions; and coalitional fairness of core allocations. We study these properties in relation to classical (static) and sequential (dynamic) core notions and apply our results to asset markets and asymmetric information models. We develop a formal setting where consumption sets have no lower bound and impose a series of general restrictions on the first period trades of each agent. All our results are applications of the same lemma about improvements to an allocation that is either non-core or non-coalitionally fair. Roughly speaking, the lemma states that if all the members of a coalition achieve a better allocation in some way (for instance, by blocking the status quo allocation or because they envy the net trade of other coalitions) then an alternative improvement can be obtained through a perturbation of the initial improvement.
    Date: 2018–09–28

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