nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2018‒12‒10
fifteen papers chosen by
Stan C. Weeber, McNeese State University

  1. A banana republic? The effects of inconsistencies in the counting of votes on voting behavior By Niklas Potrafke; Felix Roesel
  2. The Impact of Medicaid Expansion on Voter Participation: Evidence from the Oregon Health Insurance Experiment By Katherine Baicker; Amy Finkelstein
  3. Cohesive Institutions and Political Violence By Thiemo Fetzer; Stephan Kyburz
  4. Analysing Group Contract Design Using a Lab and a Lab-in-the-Field Threshold Public Good Experiment By Bouma, J.A.; Nguyen, Binh; van der Heijden, Eline; Dijk, J.J.
  6. Who runs first to the bank? By Hubert Janos Kiss; Ismael Rodriguez-Lara; Alfonso Rosa-Garcia
  7. On the political economy of compulsory education By Alessandro Balestrino; Lisa Grazzini; Annalisa Luporini
  8. From Prevention to Seizing Power: The Thai Martial Law and the Making of Special Authority by the Constitution in Thailand By Thep Boontanondha
  9. Household Collective Models: Three Decades of Theoretical Contributions and Empirical Evidence By Donni, Olivier; Molina, José Alberto
  10. Stable Constitutions By Daeyoung Jeong; Semin Kim
  11. Searching with friends By A Stefano Caria; Simon Franklin; Marc Witte
  12. How Do Households Allocate Risk? By Christoph Engel; Alexandra Fedorets; Olga Gorelkina
  13. A theory of esteem based peer pressure By Fabrizio Adriani; Silvia Sonderegger
  14. The diffusion of a policy innovation in the energy sector: evidence from the collective switching case in Europe By Silvia Blasi; Silvia Rita Sedita
  15. The Benefits of Reducing Hold-Out Risk: Evidence from the Euro CAC Experiment, 2013-2018 By Picarelli, Mattia; Erce, Aitor

  1. By: Niklas Potrafke; Felix Roesel
    Abstract: We examine whether local inconsistencies in the counting of votes influence voting behavior. We exploit the case of the second ballot of the 2016 presidential election in Austria. The ballot needed to be repeated because postal votes were counted carelessly in individual electoral districts (“scandal districts”). We use a difference-indifferences approach comparing election outcomes from the regular and the repeated round. The results do not show that voter turnout and postal voting declined significantly in scandal districts. Quite the contrary, voter turnout and postal voting increased slightly by about 1 percentage point in scandal districts compared to nonscandal districts. Postal votes in scandal districts also were counted with some greater care in the repeated ballot. We employ micro-level survey data indicating that voters in scandal districts blamed the federal constitutional court for ordering a second election, but did not seem to blame local authorities.
    Keywords: Elections, trust, political scandals, administrative malpractice, counting of votes, voter turnout, populism, natural experiment
    JEL: D72 D02 Z18 P16
    Date: 2018
  2. By: Katherine Baicker; Amy Finkelstein
    Abstract: In 2008, a group of uninsured low-income adults in Oregon was selected by lottery for the chance to apply for Medicaid. Using this randomized design and state administrative data on voter behavior, we analyze how a Medicaid expansion affected voter turnout and registration. We find that Medicaid increased voter turnout in the November 2008 Presidential election by about 7 percent overall, with the effects concentrated in men (18 percent increase) and in residents of democratic counties (10 percent increase); there is suggestive evidence that the increase in voting reflected new voter registrations, rather than increased turnout among pre-existing registrants. There is no evidence of an increase in voter turnout in subsequent elections, up to and including the November 2010 midterm election.
    JEL: I13 I28
    Date: 2018–11
  3. By: Thiemo Fetzer (University of Warwick); Stephan Kyburz (Center for Global Development)
    Abstract: Can institutionalized transfers of resource rents be a source of civil conflict? Are cohesive institutions better at managing conflicts over distribution? We exploit exogenous variation in revenue disbursements to local governments and use new data on local democratic institutions in Nigeria to answer these questions. There is a strong link between rents and conflict far away from the location of the resource. Conflict over distribution is highly organized, involving political militias, and concentrated in the extent to which local governments are non-cohesive. Democratically elected local governments significantly weaken the causal link between rents and political violence. Elections produce more cohesive institutions, and vastly limit the extent to which distributional conflict between groups breaks out following shocks to the rents. Throughout, we confirm these findings using individual level survey data.
    Keywords: Nigeria, conflict, ethnicity, natural resources, political economy, commodity, prices
    JEL: Q33 O13 N52 R11 L71
    Date: 2018–11
  4. By: Bouma, J.A. (Tilburg University, Center For Economic Research); Nguyen, Binh (Tilburg University, Center For Economic Research); van der Heijden, Eline (Tilburg University, Center For Economic Research); Dijk, J.J.
    Abstract: This paper presents the results of a threshold public goods game experiment with heterogeneous players. The experiment is designed in close collaboration with the Dutch association of agri-environmental farmer collectives. Subjects are recruited at a university (“the lab”) and a farm management training centre (“lab-in-the-field”). The treatments have two different distribution rules which are varied in a within-subjects manner. After subjects have experienced both, they can vote for one of the two rules: either a differentiated bonus that results in equal payoff for all, or an undifferentiated, equal share of the group bonus. In a between-subjects manner, subjects can vote for a (minimum or average) threshold or are faced with an exogenous threshold. The results indicate that exogenous thresholds perform better, possibly because the focal point they provide facilitates coordination. With regard to the two distribution rules, the results are mixed: average contributions and payoffs are higher in the lab under the ‘equal-payoff’ rule, but there is no significant difference between the two in the lab-in-the-field, possibly because contributions in the lab-in-the-field are much less efficient. Overall, our results suggest that environmental payment schemes should not only consider farmer heterogeneity in the design of group contracts, but pay explicit attention to coordination problems as well.
    Keywords: Threshold public good games; endogenous choice; lab-in-the-field; collective agri-envorenmental management; group contracts; distribution rules; heterogeneous subjects
    JEL: H41 C92 C93 D70 Q57
    Date: 2018
  5. By: Anishka Chugh (University School of Management Studies, Guru Gobind Singh Indraprastha University)
    Abstract: With organizations serving as mini worlds formed by different individuals coming and staying together and performing collectively, conflict becomes most evident. Leadership style plays an important role how these conflicts are handled especially in a team situation. Leadership style also determines the effectiveness of a team. The present study was conducted to map these interrelationships between leadership style of team leader, conflict resolution styles of team members and team effectiveness. A total of 15 teams consisting of 138 team members were taken for the study. The results reveal that Competing and Collaborating style of conflict resolution amongst the team members are significantly negatively affected due to Autocratic and Democratic Leadership Styles respectively. Avoiding conflict resolution style of team members is significantly influenced by Autocratic Leadership Styles while there is no significant effect of any Leadership styles on Compromising as well as Accommodating conflict resolution styles. Further it was observed that only Role Clarity and Shared Responsibility factors of Team Effectiveness is influenced by the Leadership styles while the remaining factors such as Participative leadership, Aligned Roles, Focus on task, Innovation, Problem Solving, Effective Communication, Responsiveness are independent of any Leadership styles present in the teams.
    Keywords: Leadership Style, Autocratic, Democratic, Lazzeiz- Faire, Conflict Resolution, Team Effectiveness
    JEL: J24
    Date: 2018–10
  6. By: Hubert Janos Kiss (Momentum (LD-004/2010) Game Theory Research Group Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and Department of Economics, Eötvös Loránd University, Budapest, Hungary); Ismael Rodriguez-Lara (Departamento de Teoría e Historia Económica Universidad de Granada); Alfonso Rosa-Garcia (Facultad de Ciencias Jurídicas y de la Empresa, Universidad Católica San Antonio, Murcia, Spain)
    Abstract: We study how lines form endogenously in front of banks when depositors differ in their liquidity needs. Our model has two stages. In the first one, depositors choose the level of costly effort they want to exert to arrive early at the bank which determines the order of decisions. In the second stage, depositors decide whether to withdraw or to keep the funds deposited. We consider two different informational environments (simultaneous and sequential) that differ in whether or not depositors can observe the decision of others during the second stage of the game. We show theoretically that the informational environment affects the emergence of bank runs and thus should influence the willingness to rush to the bank. We test the predictions in the lab, where we gather extensive data on individual traits to account for depositors' heterogeneity; e.g. socio-demographics, uncertainty attitudes or personality traits. We find no significant differences in the costly effort to arrive early at the bank neither across the informational environments, nor according to the liquidity needs of the depositors. In the sequential environment, some depositors rush to the bank because they are irrational and do not recognize the benefits of observability in fostering the coordination on the no-bank run outcome. There is also evidence that some depositors rush to keep their funds deposited and to facilitate coordination on the efficient outcome. Finally, we document that loss aversion is an important factor in the formation of the line.
    Keywords: bank runs, coordination problems, endogenous formation of lines, loss aversion, risk aversion, experimental economics, game theory, sequential games, simultaneous games
    JEL: C91 D03 D8 G02 J16
    Date: 2018–10
  7. By: Alessandro Balestrino; Lisa Grazzini; Annalisa Luporini
    Abstract: We consider an economy with two categories of agents: entrepreneurs and workers. In laissez-faire, the former gain from having their children educated, while the latter, although they may profit from their own education, have no interest in sending their children to school. We first characterise the preferred education policy-cum-redistributive taxation for the two groups, and find that entrepreneurs favour a compulsory education policy while workers prefer a purely redistributive taxation. Each group would like the policy to be entirely financed by the other group. Then, we introduce a political process with probabilistic voting and verify that an equilibrium with both a compulsory education policy and some redistribution may exist in which the workers are constrained but the entrepeneurs, who benefit from hiring educated workers, are not.
    Keywords: Education Policy, Redistributive taxation, Probabilistic voting.
    JEL: H42 H52
    Date: 2018
  8. By: Thep Boontanondha (Graduate School of Asia ? Pacific Studies, Waseda University)
    Abstract: Thailand has seen 13 coup d'états since the 1932 revolution that established democracy in the country. This number marks Thailand as one of the countries experiencing most frequent coup d?états. Therefore, the coup d?état and the democracy in Thailand is one of the much-studied topics by many scholars. Some famous pieces of work include Thailand: The Politics of Despotic Paternalism by Thak Chaleumtiarana and The Plan to snatch the Nation: About the Stage and against Stage in the second term of Field Marshal P. Phibunsongkram (1948 - 1957) by Suthachai Yimprasert. Most of these researches focus on the political circumstance and the factors that supported the occurrence of the coup d'état. These studies identify many factors that contributed to the success of the armed forces in overthrowing governments. However, the martial law, one of the important factors, has been always overlooked. Generally, the purpose of martial law imposition is to maintain peace in the society during wartime or in periods of civil unrest or chaos. The particular feature of martial law allows military armies to impose the law without government approvals. Once declared, it gives the ultimate power to the commander-in-chief of the army who becomes the person that everyone in the country must obey. This law preludes the way for the commander-in-chief to seize power from the civil government. Hence, it is unsurprising that the armed forces always declare martial law before it overthrows the government. Martial law has probably, in a way, become military's preparation for coup launching. This research will focus on how the armed forces use martial law to support their coup and how martial law becomes one of the most important military?s tools for launching a coup.
    Keywords: martial law, armed force, coup d?état
    JEL: N95
    Date: 2018–10
  9. By: Donni, Olivier (University of Cergy-Pontoise); Molina, José Alberto (University of Zaragoza)
    Abstract: Household collective models celebrate their thirtieth birthday. The collective approach constitutes, perhaps, the microeconomics topic that has produced the largest number of papers (both published and in working paper/mimeo formats) during the last three decades, beginning with the seminal paper published by P.A. Chiappori in Econometrica (Chiappori, 1988). To add to some excellent surveys of household collective models (Strauss et al., 2000; Vermeulen, 2002; Donni and Chiappori, 2011; Chiappori and Mazzocco, 2017), we here perform a bibliographic review of the literature, which includes theoretical contributions, as well as the international empirical evidence related to the collective approach. With respect to the theoretical papers, the collective framework has been used to provide theoretical results for a number of household issues; for example, labour supply, consumption and savings, household production, and intra-household allocation. As for the empirical papers, the international evidence covers the majority of developed and developing countries from all continents.
    Keywords: household, collective models, Pareto efficiency, sharing rule, labor supply, consumption
    JEL: D10 J22 Y10
    Date: 2018–10
  10. By: Daeyoung Jeong (New York University Abu Dhabi); Semin Kim (Yonsei University)
    Abstract: This study identifies a set of stable constitutions. A constitution is a pair of voting rules (f, F) where f is for the choice of final outcome, and F is for the decision on the change of a voting rule from the given rule f. A constitution is stable if any possible alternative rule does not get enough votes to replace the given rule f under the rule F. We fully characterize the set of interim stable constitutions among anonymous voting rules. We also characterize the properties of the interim stable constitutions among general weighted majority rules.
    Keywords: Weighted majority rules, decision rules, self-stability
    JEL: C72 D02 D72 D82
    Date: 2018–11
  11. By: A Stefano Caria; Simon Franklin; Marc Witte
    Abstract: Do policy interventions disrupt social networks? We study how a job-search assistance intervention in Addis Ababa, Ethiopia, affects the job-search partners of programme participants. We ?nd that the partners of treated participants reduce their job search efforts compared to the partners of untreated jobseekers. This is not because they receive more information about vacancies from their treated friends. On the contrary, we document less information sharing between job-search partners. We present suggestive evidence that this may be because cooperation in job search becomes harder when one jobseeker has access to more resources than the other.
    Date: 2018
  12. By: Christoph Engel (Max Planck Institute for Research on Collective Goods); Alexandra Fedorets (German Institute for Economic Research (DIW Berlin)); Olga Gorelkina (University of Liverpool - Management School)
    Abstract: Individuals often have to decide to which degree of risk they want to expose others, or how much risk to accept if their choice has an externality on third parties. One typical application is a household. We run an experiment in the German Socio-Economic Panel with two members from 494 households. Participants have a good estimate of each other’s risk preferences, even if not explicitly informed. They do not simply match this preference when deciding on behalf of the other household member, but shy away from exposing others to risk. We model the situation, and we find four distinct types of individuals, and two distinct types of households.
    Date: 2018–11
  13. By: Fabrizio Adriani (University of Leicester); Silvia Sonderegger (School of Economics, University of Nottingham)
    Abstract: Signaling models of esteem have implications for peer pressure. Using Benabou's and Tirole's 'honor-stigma' model, we analyze how the pressure to engage in costly signaling changes with the distribution of peers' attributes. In particular, we provide novel comparative statics on the effects of changes in mean, dispersion, skewness and other features of the distribution of peer quality. First, we provide conditions under which moving an individual to a group with higher mean quality may provide stronger incentives (i.e. a 'keeping up with the Joneses' effect) or may induce discouragement (a 'small fish in a big pond' effect). Second, we show that both right and left truncations of the distribution of peer quality reduce incentives. Third, more dispersed peer distributions provide stronger incentives. Finally, more right skewed peer distributions induce stronger incentives when only a small fraction of the group provide the signal, but reduce motivation when provision is widespread. We also analyze the aggregate effects of each of these distributional changes. Applications include education, redistribution, and conspicuous consumption.
    Keywords: Esteem, Status, Peer pressure, Signaling, Small fish in a big pond, Conspicuous consumption, Distributional comparative statics.
    Date: 2018–12
  14. By: Silvia Blasi (University of Padova); Silvia Rita Sedita (University of Padova)
    Abstract: This paper investigates the factors that influence the dissemination of an energy policy innovation, the collective switching, adopting the business ecosystem as unit of analysis. Collective switching is a new phenomenon that recent literature has not yet investigated. It is characterised by a group of people with common characteristics that, through an intermediary, negotiates with the energy suppliers and, thanks to its bargaining power, is able to obtain advantageous contracts. The 6C framework is adopted in order to perform a cross-country analysis oriented to single out differences in the collective switching ecosystems. Through a comparative case study analysis, which examines in rich detail 11 European countries’ collective switching campaigns, this work provides an accurate description of the collective switching business ecosystem and the ways it reacts to a policy innovation. Semi-structured interviews, conducted with consumer associations that organised collective switching campaigns, provide insights for the definition of some policy interventions.
    Keywords: Business Ecosystem, policy innovation, collective switching, energy sector, Europe
    JEL: Q40 O52 O57
    Date: 2018–11
  15. By: Picarelli, Mattia; Erce, Aitor
    Abstract: The introduction of collective action clauses in advanced economies’ sovereign bonds is an understudied phenomenon. An important concern is whether these clauses produce segmentation, pushing apart the price of those bonds issued with and without collective action clauses (CACs). This paper uses the introduction in 2013 of mandatory two-limb CACs in euro area sovereign bonds issued under domestic law to evaluate the price impact of these provisions. In the euro area, bonds with CACs trade at a small premium. On average for those bonds, yields were up to six basis points lower. This average, however, masks heterogeneity. While Germany and Netherlands have not seen a sustained reduction in borrowing costs, in Italy and Spain the effect has been large (between five and ten basis points). These findings support the argument that the introduction of euro CACs in domestic law bonds helped investors reassess the risks associated with those instruments in both countries. impact of these provisions. In the euro area, bonds with CACs trade with a small premium. On average, for those bonds yields were up to six basis points lower. This average, however, masks heterogeneity. While Germany and Netherlands have not seen a sustained reduction in borrowing costs, in Italy and Spain the effect has been large (between five and ten basis points). These findings provide support to the argument that the introduction of euro CACs in domestic law bonds helped investors reassess the risk associated with those instruments in both two countries
    Keywords: Collective action clause, hold-outs, sovereign risk, bond yields
    JEL: F3 G12 G18
    Date: 2018–11–21

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