nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2018‒12‒03
eleven papers chosen by
Stan C. Weeber, McNeese State University

  1. Electoral Reform and Voter Coordination By Jon H. Fiva; Simon Hix
  2. Complex Ballot Propositions, Individual Voting Behavior, and Status quo Bias By Zohal Hessami; Sven Resnjanskij
  3. Immigrant Voters, Taxation and the Size of the Welfare State By Arnaud Chevalier; Benjamin Elsner; Andreas Lichter; Nico Pestel
  4. Should Straw Polls be Banned? By Ali, S. Nageeb; Bohren, Aislinn
  5. Anti-social Behavior in Groups By Michal Bauer; Jana Cahlikova; Dagmara Celik Katreniak; Julie Chytilova; Lubomir Cingl; Tomas Zelinsky
  6. Preferences and strategic behavior in public goods games By Gilles Grandjean; Mathieu Lefebvre; Marco Mantovani
  7. Pledge-and-Review Bargaining By Bård Harstad
  8. What Drives Conditional Cooperation in Public Goods Games? By Peter Katuscak; Tomas Miklanek
  9. Ownership structure of family business groups of Pakistan By SHAHID HUSSAIN; nabeel safdar
  10. Politics from the Bench? Ideology and Strategic Voting in the U.S. Supreme Court By Tom S. Clark; B. Pablo Montagnes; Jörg L. Spenkuch
  11. Democratic support and corruption: Lessons from East Europe By Enste, Dominik; Acht, Martin

  1. By: Jon H. Fiva; Simon Hix
    Abstract: Electoral reform creates new strategic coordination incentives for voters, but these effects are difficult to isolate. We identify how the reform of the Norwegian electoral system in 1919, when single-member districts (SMDs) were replaced with multi- member proportional representation (PR), shaped voter behavior. Our dataset allows us to measure vote-shares of parties in the pre-reform SMDs and in the same geographic units in the post-reform multi-member districts. The electoral reform had an immediate effect on the fragmentation of the party system in Norway, due in part to strategic party entry. We find, though, that another main effect of the reform was that many voters switched between existing parties, particularly between the Liberals and Conservatives, as the incentives for these voters to coordinate against Labor were removed by the introduction of PR. This has implications for how we understand electoral reform, particularly in the early part of the 20th century.
    Keywords: electoral reform, proportional representation, voter behavior
    JEL: D72
    Date: 2018
  2. By: Zohal Hessami; Sven Resnjanskij
    Abstract: One concern about direct democracy is that citizens may not be sufficiently competent to decide about complex policies. This may lead to exaggerated conservatism in the voting decision (status quo bias). To investigate how complexity affects individual voting behavior, we develop a novel measure of proposition complexity (using official pre-referendum booklets) and combine it with post-referendum survey data from Switzerland. Using Heckman selection estimations to account for endogenous variation in participation rates, we find that an increase in proposition complexity from the 10th to the 90th percentile would decrease voters' approval by 5.6 ppts, which is often decisive: an additional 12% of the propositions in our sample would be rejected.
    Keywords: voting behavior, proposition complexity, direct democracy, status quo bias, Heckman probit model
    JEL: D72 D78
    Date: 2018
  3. By: Arnaud Chevalier; Benjamin Elsner; Andreas Lichter; Nico Pestel
    Abstract: This paper studies the impact of immigration on public policy setting. We exploit the sudden arrival of eight million forced migrants in West Germany after WWII. These migrants were poorer than the local population but had full voting rights and were eligible for social welfare. We show that cities responded to this shock with selective tax raises and shifts in spending. Voting data suggests that these changes were partly driven by the immigrants’ political influence. We further document a strong persistence of the effect. The initial migration shock changed the preferences for redistribution of the following generations.
    Date: 2018
  4. By: Ali, S. Nageeb; Bohren, Aislinn
    Abstract: A Principal appoints a committee of partially informed experts to choose a policy. The experts' preferences are aligned with each other but conflict with hers. We study whether she gains from banning committee members from communicating or "deliberating'' before voting. Our main result is that if the committee plays its preferred equilibrium and the Principal must use a threshold voting rule, then she does not gain from banning deliberation. We show using examples how she can gain if she can choose the equilibrium played by the committee, or use a non-anonymous or non-monotone social choice rule.
    Keywords: Collusion; Committees; Deliberation; information aggregation
    JEL: D7 D8
    Date: 2018–09
  5. By: Michal Bauer; Jana Cahlikova; Dagmara Celik Katreniak; Julie Chytilova; Lubomir Cingl; Tomas Zelinsky
    Abstract: This paper provides strong evidence supporting the long-standing speculation that decisionmaking in groups has a dark side, by magnifying the prevalence of anti-social behavior towards outsiders. A large-scale experiment implemented in Slovakia and Uganda (N=2,309) reveals that deciding in a group with randomly assigned peers increases the prevalence of anti-social behavior that reduces everyone’s payoff but which improves the relative position of own group. The effects are driven by the influence of a group context on individual behavior, rather than by group deliberation. The observed patterns are strikingly similar on both continents.
    Keywords: antisocial behavior; aggressive competitiveness; group membership; group decision-making; group conflict;
    JEL: C92 C93 D01 D64 D74 D91
    Date: 2018–11
  6. By: Gilles Grandjean; Mathieu Lefebvre; Marco Mantovani
    Abstract: We analyze experimentally behavior in a finitely repeated public goodsgame. One of the main results of the literature is that contributions are initially high, and gradually decrease over time. Two explanations of this pattern have been developed: (i) the population is composed of free-riders, who never contribute, and conditional cooperators, who contribute if others do so as well; (ii) strategic players contribute to sustain mutually beneficial future cooperation, but reduce their contributions as the end of the game approaches. This paper contributes to bridging the gap between these views. We analyze preferences and strategic ability in one design by manipulating group composition to form homogeneous groups on both dimensions. Our results highlight the interaction between the two: groups that sustain high levels of cooperation are composed of members who share a common inclination toward cooperation and have the strategic abilities to recognize and reap the benefits of enduring cooperation.
    Keywords: Voluntary contribution, conditional cooperation, free riding, strategic sophistication.
    JEL: H41 C73 C91 C92
    Date: 2018
  7. By: Bård Harstad
    Abstract: Real-world negotiations differ fundamentally from existing bargaining theory. Inspired by the Paris Agreement on climate change, this paper develops a novel bargaining game in which each party its own contribution (to a public good, for example), before the set of pledges must be accepted. I first show that, if the tolerance for delay is uncertain, each equilibrium pledge coincides with an asymmetric Nash bargaining solution. The weights placed on others. payouts reflect the underlying uncertainty, but they vary from pledge to pledge, so the set of equilibrium pledges is inefficient. This bargaining outcome is embedded in a dynamic contribution game, with endogenous technology, participation, enforcement, and contract terms, to investigate when pledge-and-review bargaining is desirable. The model’s predictions can rationalize the key differences between the climate agreements signed in Kyoto (1997) and Paris (2015) as well as the development from the former to the latter.
    Keywords: dynamic games, bargaining games, Nash program, climate change, Paris Agreement, Kyoto Protocol
    Date: 2018
  8. By: Peter Katuscak; Tomas Miklanek
    Abstract: Extensive experimental research on public goods games documents that many subjects are “conditional cooperators” in that they positively correlate their contributions with (their belief about) contributions of other subjects in their group. The goal of our study is to shed light on what preference and decision-making patterns drive this observed regularity. We consider four potential explanations, including reciprocity, conformity, inequality aversion, and residual factors such as confusing and anchoring, and aim to disentangle their effects. We find that, of the average conditionally cooperative behavior in the sample, about two thirds is accounted for by residual factors, a quarter by inequality aversion and a tenth by conformity, while reciprocity plays virtually no role. These findings carry important messages about how to interpret conditional cooperation as observed in the lab and ways it can be exploited for fundraising purposes.
    Keywords: : conditional cooperation; public goods game; reciprocity; conformity; inequality aversion; anchoring; fundraising;
    JEL: H41 C91 D64
    Date: 2018–11
  9. By: SHAHID HUSSAIN (National University of Sciences and Technology (NUST), NUST Business School); nabeel safdar (National University of Sciences and Technology (NUST), NUST Business School)
    Abstract: This study analysis the family business groups ownership structure in the framework of corporate legal system, regulatory institutions and codes of corporate governance of Pakistan. The study uses unique handpicked data comprising a sample of 326 non-financial firms listed on Pakistan Stock Exchange for a period of 2009-13. The results reveal that Pakistani corporations have high degree of concentration of ownership. The controlling shareholders own about 87 % of firms with 10 % or more shareholding and 60 % of firms with 20 % or more shareholding. Most of the businesses are controlled by families. In 63 % of business group firms, families own 20 % or more top shareholdings. The novel contribution of the study is to develop the ownership structure of family businesses and measure the cash flow leverage, cash flow and voting rights of ultimate owners in family business groups. The study finds the considerable difference in voting and cash flow rights in family business group firms. This has strong implications for regulators, minority shareholders and dispersed investors.
    Keywords: ownership structure, business group, corporate governance, cash-flow rights, minority shareholders, voting rights, family business
    JEL: G32 G34 G38
    Date: 2018–06
  10. By: Tom S. Clark; B. Pablo Montagnes; Jörg L. Spenkuch
    Abstract: Supreme Court justices often vote along ideological lines. Is this due to a genuinely different interpretation of the law, or does it reflect justices' desire to resolve politically charged legal questions in accordance with their personal views? To learn more about the nature of decision-making in the Court, we differentiate between votes that were pivotal and those that were not. When a justice's choice decides the outcome of a case, her ideology plays an even greater role in determining her vote - both relative to her choices on other cases and relative to other justices voting on the same case. We develop and empirically assess a model of voting in which judges trade off expressive and instrumental concerns. The evidence we present suggests that justices vote strategically, at least in part, to affect precedent.
    Date: 2018
  11. By: Enste, Dominik; Acht, Martin
    Abstract: It has been recognized that the support for democracy seems to be increasing with the time spent in a democratic system. An individual's life experience living under democratic rule positively affects the support for democracy as a political system. Therefore it seemed inevitable that the newly democratic eastern European member countries of the European Union would reap the benefits of democratization and slowly foster democratic support. However, recent backlashes to democratic rule in those countries seem to be contradictory. Therefore this paper investigates whether people's rising democratic capital in these new democracies also increases the support for democracy in those countries. Furthermore we examine if the quality of other institutions and especially corruption play a role in shaping the support for democracy and whether the positive effect of democratic capital on democratic support might be undermined. We find that the recent repercussions to democratic rule in eastern European countries are no coincidence. The effect of people's rising democratic capital on the support for democracy is negative in those countries. It has therefore been falling. Moreover, we establish that the increased experiences of corruption in these states undermine the support for democracy. Specifically, that democracy and corruption are complementary institutions. Only in the absence of corruption can the experience of democracy have its full effect on prodemocratic attitudes.
    JEL: D02 D72 P37
    Date: 2018

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