nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2018‒11‒26
fifteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Skill of the Immigrants and Vote of the Natives: Immigration and Nationalism in European Elections 2007-2016 By Simone Moriconi; Giovanni Peri; Riccardo Turati
  2. Special Interest Groups Versus Voters and the Political Economics of Attention By Balles, Patrick; Matter, Ulrich; Stutzer, Alois
  3. Voting as a signal of education By Nicholas Janetos
  4. The Sacred and the Profane of Budget Cycles: Evidence from Italian Municipalities. By Revelli, Federico; Zotti, Roberto
  5. Pension Communication in the Netherlands and Other Countries By Debets, Steven; Prast, Henriette; Rossi, Mariacristina; van Soest, Arthur
  6. The Political Economy of Russian Agricultural Subsidies By Kvartiuk, V.; Herzfeld, T.; Ghukasyan, S.
  7. Inferring the Ideological Affliations of Political Committees via Financial Contributions Networks By Yiran Chen; Hanming Fang
  8. Negotiating Cooperation under Uncertainty: Communication in Noisy, Indefinitely Repeated Interactions By Dvorak, Fabian; Fehrler, Sebastian
  9. Future European Alliance - Europe as a Flexible Democracy By Bruno S. Frey; Armin Steuernagel; Jonas Friedrich
  10. Euroscepticism and EU Cohesion Policy: The Impact of Micro-Level Policy Effectiveness on Voting Behavior By Julia Bachtrögler; Harald Oberhofer
  11. The Vertical Cooperative An experiment on cooperation and punishment across networks By Fatas, E; Miguel A. Meléndez-Jiménez; Hector Solaz
  12. Network Formation with Local Complements and Global Substitutes: The Case of R&D Networks By Hsieh, Chih-Sheng; König, Michael; Liu, Xiaodong
  13. The Measurement and Mismeasurement of Social Difference By Rohini Somanathan
  14. Caste, Technology and Social Networks By Gupta, I.; Veettil, P.C.; Speelman, S.
  15. Do Globalization, Deregulation and Financialization Imply a Convergence of Contemporary Capitalisms? By Robert Boyer

  1. By: Simone Moriconi (IÉSEG School of Management and LEM); Giovanni Peri (University of California, Davis); Riccardo Turati (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))
    Abstract: In this paper we document the impact of immigration at the regional level on Europeans’ political preferences as expressed by voting behavior in parliamentary or presidential elections between 2007 and 2016. We combine individual data on party voting with a classification of each party’s political agenda on a scale of their "nationalistic" attitudes over 28 elections across 126 parties in 12 countries. To reduce immigrant selection and omitted variable bias, we use immigrant settlements in 2005 and the skill composition of recent immigrant flows as instruments. OLS and IV estimates show that larger inflows of highly educated immigrants were associated with a change in the vote of citizens away from nationalism. However the inflow of less educated immigrants was positively associated with a vote shift towards nationalist positions. These effects were stronger for non-tertiary educated voters and in response to non-European immigrants. We also show that they are consistent with the impact of immigration on individual political preferences, which we estimate using longitudinal data, and on opinions about immigrants. Conversely, immigration did not affect electoral turnout. Simulations based on the estimated coefficients show that immigration policies balancing the number of high-skilled and low-skilled immigrants from outside the EU would be associated with a shift in votes away from nationalist parties in almost all European regions.
    Keywords: Immigration, Nationalism, Elections, Europe
    JEL: D72 I28 J61
    Date: 2018–09
  2. By: Balles, Patrick; Matter, Ulrich; Stutzer, Alois
    Abstract: Asymmetric information between voters and legislative representatives poses a major challenge to the functioning of representative democracy. We examine whether representatives are more likely to serve long-term campaign donors instead of constituents during times of low media attention to politics. Combining data on campaign finance donations made by individuals and special interest groups with information on their preferences for particular bills, we construct novel measures of electoral and organized interests pressure that representatives face with regard to specific legislative votes. In our analysis based on 490 roll calls between 2005 and 2014 in the US House of Representatives, we find strong evidence that representatives are more likely to vote with special interests and against constituency interests when the two are in conflict. Importantly, the latter effect is significantly larger when there is less attention on politics. Thereby, we draw on exogenous newsworthy shock events that crowd out news on the legislative process, but are themselves not related to it. The opportunistic behavior seems not to be mediated by short-term scheduling of sensitive votes right after distracting events.
    Keywords: Attention, campaign finance, interest groups, legislative voting, mass media, media attention, roll call voting, US House of Representatives
    JEL: D72 L82 L86
    Date: 2018–11
  3. By: Nicholas Janetos (Penn Wharton Budget Model)
    Abstract: Since the chance of swaying the outcome of an election by voting is usually very small, it cannot be that voters vote solely for that purpose. So why do we vote? One explanation is that smarter or more educated voters have access to better information about the candidates, and are concerned with appearing to have better information about the candidates through their choice of whether to vote or not. If voting behavior is publicly observed then more educated voters may vote to signal their education, even if the election itself is inconsequential and the cost of voting is the same across voters. I explore this explanation with a model of voting where players are unsure about the importance of swaying the election and high type players receive more precise signals. I introduce a new information ordering, a weakening of Blackwell's order, to formalize the notion of information precision. Once voting has occurred, players visit a labor market and are paid the expected value of their type, conditioning only on their voting behavior. I find that in very large games, voter turnout and the signaling return to voting remains high even though the chance of swaying the election disappears and the cost of voting is the same for all types. I explore generalizations of this model, and close by comparing the stylized features of voter turnout to the features of the model.
    Keywords: Voting, signaling
    JEL: D72 D80
    Date: 2017–05–01
  4. By: Revelli, Federico; Zotti, Roberto (University of Turin)
    Abstract: This paper investigates the influence of the staggered schedule of Italian mayoral elections and of the calendar of traditional religious celebrations (Patron Saint days) on the timing of local tax setting decisions and on the selection process of mayoral candidates. As for the impact of the electoral schedule on fiscal policy-making, we find evidence of a political budget cycle on yearly panel data from over 8,000 municipal authorities, with budgets deteriorating as elections approach and improving thereafter. When analyzing the specific timing of annual local tax rate decisions within election years, and using localities not holding elections in those same years as controls, we find that incumbents are more likely to schedule the crucial decisions about the local income tax rate during the months following the date of the elections. As for the effect of Patron Saint day celebrations, we find that fiscal decisions are less likely to be scheduled around those dates, compatibly with the hypothesis that those events constitute temporary shocks to the social capital of local communities, inducing incumbent governments to abstain from making potentially disruptive fiscal decisions under those sensitive circumstances. Finally, we find that when local elections happen to take place in the proximity of a locality’s traditional celebrations, the elected mayors tend to exhibit milder ideology and higher indicators of valence, reinforcing the hypothesis that local folklore contributes to common value thinking, social capital building, and sense of community.
    Date: 2018–10
  5. By: Debets, Steven; Prast, Henriette (Tilburg University, Center For Economic Research); Rossi, Mariacristina (Tilburg University, Center For Economic Research); van Soest, Arthur (Tilburg University, Center For Economic Research)
    Abstract: In many countries, pension reforms reduce the generosity of collective pensions and shift the responsibility for an adequate standard of living after retirement to individuals and their households. Individuals have to make more decisions than before on supplementary pension savings, on how to invest their DC pension assets, etc. Making such decisions is challenging, since retirement planning requires intertemporal decision-making under uncertainty and is subject to behavioural and psychological biases. Many studies in different countries have shown that the large majority lack the interest, knowledge, or skills to make such decisions in a way that is in their own best interest. Governments and the pension industry try to assist individuals in making the right decisions through pension communication. This paper focuses on experiences with pension communication, and the lessons to be learned from them. First, the paper provides an overview of the literature, addressing how pension communication is organized across countries and what can be said about its efficiency. Second, using Dutch longitudinal data at the individual level, we analyse the relations between communication (receiving an annual pension overview), pension knowledge, and conscious pension decision-making. We investigate associations and aim at estimating causal effects exploiting the timing of events.
    Keywords: pension saving; involvement; pension knowledge; ageing; retirement
    JEL: D14 D83 H55
    Date: 2018
  6. By: Kvartiuk, V.; Herzfeld, T.; Ghukasyan, S.
    Abstract: Agricultural policy s support to farmers, measured in real terms, differs considerably across Russian regions. What explains these large differences in regional agricultural support? We argue that traditional approaches of agricultural economics cannot fully explain this variation and we draw upon the political eocnomy literature. In particular, we explain allocation and distribution of agricultural subsidies studying the incentives of federal and regional politicians. Electoral pressures arising from competing with other political parties may push federal politicians to target either loyal or easily swayed voters and regional ones to strategically target special interst groups. Vertical organization of the Russian dominant party may generate perverse accountability links between local governors and regional agricultural interest groups. We utlize a unique dataset on the agricultural subsidies in 2008-2015 in order to test the hypotheses. The evidence suggests that federal government targets swing regions in distributing agricultural subsidies and local governments are more likely to allocate larger co-funding shares facing higher political competition in the region. In addition, regions with better organized large-scale agricultural producers and elected governors are more successful in maximizing obtained agricultural subsidies from the federal level. Acknowledgement :
    Keywords: Political Economy
    Date: 2018–07
  7. By: Yiran Chen (Department of Economics, University of Pennsylvania); Hanming Fang (Department of Economics, University of Pennsylvania)
    Abstract: About two thirds of the political committees registered with the Federal Election Commission do not self identify their party affiliations. In this paper we propose and implement a novel Bayesian approach to infer about the ideological affiliations of political committees based on the network of the financial contributions among them. In Monte Carlo simulations, we demonstrate that our estimation algorithm achieves very high accuracy in recovering their latent ideological affiliations when the pairwise difference in ideology groups' connection patterns satisfy a condition known as the Chernoff-Hellinger divergence criterion. We illustrate our approach using the campaign finance record in 2003-2004 election cycle. Using the posterior mode to categorize the ideological affiliations of the political committees, our estimates match the self reported ideology for 94.36% of those committees who self reported to be Democratic and 89.49% of those committees who self reported to be Republican.
    Keywords: Ideology; Network Analysis; Stochastic Block Models
    JEL: D85 D72 P16
    Date: 2017–12–10
  8. By: Dvorak, Fabian (University of Konstanz); Fehrler, Sebastian (University of Konstanz)
    Abstract: Case studies of cartels and recent theory suggest that repeated communication is key for stable cooperation in environments where signals about others' actions are noisy. However, empirically the exact role of communication is not well understood. We study cooperation under different monitoring and communication structures in the laboratory. Under all monitoring structures - perfect, imperfect public, and imperfect private - communication boosts efficiency. However, under imperfect monitoring, where actions can only be observed with noise, cooperation is stable only when subjects can communicate before every round of the game. Beyond improving coordination, communication increases efficiency by making subjects' play more lenient and forgiving. We further find clear evidence for the exchange of private information - the central role ascribed to communication in recent theoretical contributions.
    Keywords: infinitely repeated games, monitoring, communication, cooperation, strategic uncertainty, prisoner's dilemma
    JEL: C72 C73 C92 D83
    Date: 2018–10
  9. By: Bruno S. Frey; Armin Steuernagel; Jonas Friedrich
    Abstract: A reasonable future for Europe can only be achieved if two essential elements are fulfilled: Firstly, newly established institutions must be democratic and have strong support from citizens rather than from national governments. Secondly, the large number of different ethnic, cultural, religious, and regional units existing on the European continent must be able to maintain their identity. This diversity must be institutionally supported rather than be undermined by standardization and centralization. We suggest political institutions, which are formed to meet these goals, following the example of Functional, Overlapping, Competing Jurisdictions (FOCJ). If these two goals are adequately reached, a future alliance raises the identification with the European project, and induces citizens to exhibit civic virtue in strengthening these goals.
    Keywords: europe, flexible institutions, identity, diversity, FOCJ, European Union
    JEL: H10 H40 K33 P40 P48 R10
    Date: 2018
  10. By: Julia Bachtrögler (Austrian Institute of Economic Research); Harald Oberhofer (Department of Economics, Vienna University of Economics and Business)
    Abstract: This study investigates whether there is a link between the successful implementation of European cohesion policy and the voters' attitudes towards the EU. Using the French presidential elections in 2017 as a case study, we do not solely consider regional funds expenditures but also its induced effects in a region as further potential determinant of pro-European or eurosceptic voting behavior. In order to measure the effectiveness of EU structural funds and Cohesion Fund assignment, firm-level employment effects in French NUTS-2 regions stemming from project allocation during the multi-annual financial framework 2007-2013 are estimated. The obtained average treatment effects are, in a next step, used together with other regional characteristics to capture the citizens' perceived exposure to the EU in an empirical voting model for the French presidential election in 2017. The estimation results reveal a significant negative relationship between the effectiveness of EU funds allocation and the vote share of the eurosceptic candidate Marine Le Pen.
    Keywords: Euroscepticism, EU cohesion policy, effectiveness, voting behavior, French presidential election
    JEL: C21 D72 E61 R11 R58
    Date: 2018–11
  11. By: Fatas, E; Miguel A. Meléndez-Jiménez; Hector Solaz
    Abstract: We experimentally study punishment patterns across network structures, and their effect on cooperation. In a repeated public goods setting, subjects can only observe and punish their neighbors. Centralized structures (like the star network) outperform other incomplete networks and reach contribution levels like the ones observed in a complete network. Our results suggest that hierarchical network structures with a commonly observed player benefit more from sanctions not because central players punish more, but because they follow, and promote, different punishment patterns. While quasi-central players in other incomplete architectures (like the line network) retaliate, and get trapped in the vicious circle of antisocial punishment, central players in the star network do not punish back, increase their contributions when sanctioned by peripheral players, and sanction other participants in a prosocial manner. Our results illustrate recent field studies on the evolutionary prevalence of hierarchical networks. We document a network-based rationale for this positive effect in an identity-free, fully anonymous environment.
    Keywords: Public good experiments, networks, monitoring, punishment
    Date: 2018–11–14
  12. By: Hsieh, Chih-Sheng; König, Michael; Liu, Xiaodong
    Abstract: We introduce a stochastic network formation model where agents choose both actions and links. Neighbors in the network benefit from each other's action levels through local complementarities and there exists a global interaction effect reflecting a strategic substitutability in actions. We provide a complete equilibrium characterization in the form of a Gibbs measure, and show that the model is consistent with empirically observed networks. We then use our equilibrium characterization to show that the model can be conveniently estimated even for large networks. The policy relevance is demonstrated with examples of firm exit, mergers and subsidies in R&D collaboration networks.
    Keywords: key player; mergers and acquisitions; network formation; peer effects; Subsidies; technology spillovers
    JEL: C11 C63 C73 D83 L22
    Date: 2018–09
  13. By: Rohini Somanathan (Department of Economics, Delhi School of Economics)
    Abstract: Measures of social difference such as the Ethnolinguistic Fractionalization Index (ELF) and Polarization are commonly used proxies for community heterogeneity. They are used to “explain” collective outcomes ranging from voluntary contributions in elementary schools to civil wars. This essay reviews this literature in the face of new research on identity and collective outcomes. I argue that methods of social classification often seriously mis-measure identity and difference and that poverty rather than heterogeneity is often the source of community failures. Experiments on deliberative democracy offer important insights into how diverse societies can flourish.
    Keywords: Identity, heterogeneity, collective action, conflict, democracy.
    JEL: C92 D63 D64 J15 J18
    Date: 2018–10
  14. By: Gupta, I.; Veettil, P.C.; Speelman, S.
    Abstract: This paper analyzes the role of informal social networks in technology diffusion in a caste-based society in which a social hierarchical structure is prevalent. Often, information and technology diffusion are constrained by social and economic boundaries. In a complex and hierarchical social system in which caste plays a very decisive role in everyday life as well as in the political and policy fabric of the regional, state, and national system, proper targeting and dissemination of technology to the marginalized sections of society are very important for their development. Taking diffusion of improved rice varieties as an example, we analyze whether technology diffusion is confined within caste-based social networks or whether technology can break caste boundaries and spread across social networks. We found that informal networks tend to concentrate within caste-based groups and hence observed significantly stronger social network within caste than across caste categories. Strong within caste network discourages hybrids but facilitates stabilized technologies such as improved varieties whereas strong across caste networks discourage adoption of older and traditional varieties. It is important to highlight that existence of stronger within as well as across caste networks for scheduled tribes (ST) facilitated these marginalized communities to adopt improved and hybrid varieties. Acknowledgement :
    Keywords: Labor and Human Capital
    Date: 2018–07
  15. By: Robert Boyer (PJSE - Paris-Jourdan Sciences Economiques - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique, IDA - Institut des Amériques - M.E.N.E.S.R. - Ministère de l'Éducation nationale, de l’Enseignement supérieur et de la Recherche)
    Abstract: Distinctive political compromises prevailed and explained various brands of capitalism observed from WWII to the early 1990s. Is this key finding by régulation research been still valid given the wide diffusion of common structural changes since the 2000s: slow productivity in the industrialized world, overwhelming impact of finance, rise of inequalities within many Nation-States in response to deregulation, social and political polarization, open conflict between capitalism and democracy, the trading place between mature and emerging economies? These stylized facts challenge most economic theories but they can be explained by an institutionalist and historical approach that also helps in redesigning a relevant macroeconomic approach. Each capitalism brand displays specific complementarities among institutional forms and their growing interactions imply more their complementarity than their frontal competition. Consequently, all capitalisms have been transformed but they do not converge towards a canonical configuration. The rise of nationalist movements may challenge the present international relations but they should not underestimate the economic and social costs of their protectionist strategy.
    Keywords: Capitalism variety,Institutional complementarity,Global finance,Internationalization,Deregulation,National and international inequality,Capitalism and democracy,International relations
    Date: 2018–09

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