nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2019‒03‒25
fourteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Voting on the Threat of Exclusion in a Public Goods Experiment By Astrid Dannenberg; Corina Haita-Falah; Sonja Zitzelsberger
  2. Coalition Formation in Legislative Bargaining By Marco Battaglini
  3. The Virtuous Cycle of Agreement By Philippos Louis; Matias Núñez; Dimitrios Xefteris
  4. Biased Policy Professionals By Sheheryar Banuri; Stefan Dercon; Varun Gauri
  5. On war and political radicalization By Stephanos Vlachos
  6. Non-Bayesian Social Learning and the Spread of Misinformation in Networks By Sebastiano Della Lena
  7. Do Party Positions Affect the Public\'s Policy Preferences? By Grewenig, Elisabeth; Lergetporer, Philipp; Werner, Katharina; Woessmann, Ludger
  8. Haggling on Values: Towards Consensus or Trouble By Victorien Barbet; Noé Guiraud; Vincent Laperrière; Juliette Rouchier
  9. Preferences over public good, political delegation and leadership in tax competition By Pal, Rupayan; Sharma, Ajay
  10. The Pizza Night Game: Efficiency, Conflict and Inequality in Tacit Bargaining Games with Focal Points By Andrea Isoni; Robert Sugden; Jiwei Zheng
  11. Park Life: Assessing the need to Understand User Group Needs when Balancing Commercial Enterprise with Biodiversity Conservation By Mike Brock; Joel Russell
  12. Making the Rules: The Governance of Standard Development Organizations and their Policies on Intellectual Property Rights By Justus Baron; Jorge Contreras; Martin Husovec; Pierre Larouche
  13. Cooperative games with externalities and probabilistic coalitional beliefs By Stamatopoulos, Giorgos
  14. Job losses and political acceptability of climate policies: why the ‘job-killing’ argument is so persistent and how to overturn it By Francesco Vona

  1. By: Astrid Dannenberg (University of Kassel); Corina Haita-Falah (University of Kassel); Sonja Zitzelsberger (University of Kassel)
    Abstract: Ostracism is practiced by virtually all societies around the world as a means of enforcing cooperation and excluding members who show anti-social behaviors or attitudes. In this paper, we use a public goods experiment to study whether groups choose to implement an institution that allows for the exclusion of members. We distinguish between a costless exclusion institution and a costly exclusion institution that, if chosen, reduces the endowment of all players. We also provide a comparison with an exclusion institution that is exogenously imposed upon groups. A significant share of the experimental groups choose the exclusion institution, even when it comes at a cost, and the support for the institution increases over time. Average contributions to the public good are significantly higher when the exclusion option is available, not only because low contributors are excluded but also because high contributors sustain a higher cooperation level under the exclusion institution. Subjects who vote in favor of the exclusion institution contribute more than those who vote against it, but only when the institution is implemented. These results are largely inconsistent with standard economic theory but can be better explained by assuming heterogeneous groups in which some players have selfish and others have social preferences.
    Keywords: public goods experiment; cooperation; ostracism; institutional choice; social preferences
    JEL: C72 C91 C92 D02 D71 H41
    Date: 2019
  2. By: Marco Battaglini
    Abstract: We propose a new model of legislative bargaining in which coalitions have different values, reflecting the fact that the policies they can pursue are constrained by the identity of the coalition members. In the model, a formateur picks a coalition and negotiates for the allocation of the surplus it is expected to generate. The formateur is free to change coalitions to seek better deals with other coalitions, but she may lose her status if bargaining breaks down, in which case a new formateur is chosen. We show that as the delay between offers goes to zero, the equilibrium allocation converges to a generalized version of a Nash Bargaining Solution in which–in contrast to the standard solution–the coalition is endogenous and determined by the relative coalitional values. A form of the hold-up problem specific to these bargaining games may lead to significant inefficiencies in the selection of the equilibrium coalition. We use the equilibrium characterization of the distortions to study the role of the head of state in avoiding (or containing) distortions. We also show that the model helps rationalizing well known empirical facts that are in conflict with the predictions of standard non-cooperative models of bargaining: the absence of significant (or even positive) premia in ministerial allocations for formateurs and their parties; the occurrence of supermajorities; and delays in reaching agreements.
    JEL: D72 D78
    Date: 2019–03
  3. By: Philippos Louis; Matias Núñez; Dimitrios Xefteris
    Abstract: Collective choice mechanisms are used by groups to reach decisions in the presence of diverging preferences. But can the employed mechanism affect the degree of post-decision actual agreement (i.e. preference homogeneity) within a group? And if yes, which are the features of the choice mechanisms that matter? Since it is difficult to address these questions in natural settings, we employ a theory-driven experiment where, after the group collectively decides on an issue, individual preferences can be properly elicited. We find that the use of procedures that promote apparent consensus with an outcome (i.e. agreement in manifest behaviors) generate substantially higher levels of actual agreement compared to outcome-wise identical mechanisms that push subjects to exaggerate their differences.
    Keywords: implementation, mechanism design, consensus, agreement, congruence, experiment, endorsements
    JEL: D71 D72
    Date: 2019–03
  4. By: Sheheryar Banuri (University of East Anglia); Stefan Dercon (University of Oxford); Varun Gauri (World Bank)
    Abstract: Although the decisions of policy professionals are often more consequential than those of individuals in their private capacity, there is a dearth of studies on the biases of policy professionals: those who prepare and implement policy on behalf of elected politicians. Experiments conducted on a novel subject pool of development policy professionals (public servants of the World Bank and the Department for International Development in the UK) show that policy professionals are indeed subject to decision making traps, including the effects of framing outcomes as losses or gains, and most strikingly, confirmation bias driven by ideological predisposition, despite having an explicit mission to promote evidence-informed and impartial decision making. These findings should worry policy professionals and their principals in governments and large organizations, as well as citizens themselves. A further experiment, in which policy professionals engage in discussion, shows that deliberation may be able to mitigate the effects of some of these biases.
    Keywords: Biases, decision making, policy professionals, framing, confirmation bias, behavioural economics
    JEL: C90 H83 Z18
    Date: 2018–05
  5. By: Stephanos Vlachos
    Abstract: This paper illustrates how a historical shock to political preferences can translate into observable electoral support as the political landscape evolves. During World War II, the Third Reich annexed the French eastern borderlands and their inhabitants were forcibly con-scripted into the Wehrmacht. In the first stage, survey data is used to show how this forced conscription reduced political trust. Municipality-level data and political discourse data are then combined to estimate the impact of conscription on support for radical candidates and on abstention in elections during the 1965-2017 period. Identification exploits the fact that different birth cohorts were affected in each annexed region by using eligible births as an instrument for conscription. In earlier elections in which platforms were more similar, both radical and moderate candidates were penalized in municipalities where more men were conscripted, resulting in higher abstention. In more recent elections, which were more polarized, conscription increased support for radical candidates.
    JEL: D72 N44 Z13
    Date: 2019–03
  6. By: Sebastiano Della Lena (Department of Economics, University Of Venice Cà Foscari)
    Abstract: People are exposed to a constant flow of information about economic, social and political phenomena; nevertheless, misinformation is ubiquitous in the society. This paper studies the spread of misinformation in a social environment where agents receive new information each period and update their opinions taking into account both their experience and neighborhood's ones. I consider two types of misinformation: permanent and temporary. Permanent misinformation is modeled with the presence of stubborn agents in the network and produces long-run effects on the agents learning process. The distortion induced by stubborn agents in social learning depends on the “updating centrality”, a novel centrality measure that identifies the key agents of a social learning process, and generalizes the Katz-Bonacich measure. Conversely, temporary misinformation, represented by shocks of rumors or fake news, has only short-run effects on the opinion dynamics. Results rely on spectral graph theory and show that the consensus among agents is not always a sign of successful learning. In particular, the consensus time is increasing with respect to the “bottleneckedness” of the underlying network, while the learning time is decreasing with respect to agents' reliance on their private signals.
    Keywords: Opinion Dynamics in Networks, Non-Bayesian Social Learning, Stubborn Agents, Speed of Convergence
    JEL: D83 D85 D72 Z10
    Date: 2019
  7. By: Grewenig, Elisabeth (ifo Institute); Lergetporer, Philipp (ifo Institute); Werner, Katharina (ifo Institute); Woessmann, Ludger (ifo Institute and LMU Munich)
    Abstract: The standard assumption of exogenous policy preferences implies that parties set their positions according to their voters\' preferences. We investigate the reverse effect: Are the electorates\' policy preferences responsive to party positions? In a representative German survey, we inform randomized treatment groups about the positions of political parties on two family policies, child care subsidy and universal student aid. In both experiments, results show that the treatment aligns the preferences of specific partisan groups with their preferred party\'s position on the policy under consideration, implying endogeneity of policy preferences. The information treatment also affects non-partisan swing voters.
    Keywords: political parties; partisanship; survey experiment; information; endogenous preferences; voters; family policy;
    JEL: D72 D83 H52 J13 I28 P16
    Date: 2019–03–20
  8. By: Victorien Barbet (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Noé Guiraud (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - Ecole Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Vincent Laperrière (ESPACE - Études des Structures, des Processus d’Adaptation et des Changements de l’Espace - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - AU - Avignon Université - AMU - Aix Marseille Université - CNRS - Centre National de la Recherche Scientifique); Juliette Rouchier (LAMSADE - Laboratoire d'analyse et modélisation de systèmes pour l'aide à la décision - Université Paris-Dauphine - CNRS - Centre National de la Recherche Scientifique)
    Abstract: We present a model showing the evolution of an organization of agents who discuss democratically about good practices. This model feeds on a field study we did for a few years in France where we followed Non Profit Organizations, called AMAP (a french short food chain), and observed their construction through time at the regional and national level. Most of the hypothesis we make are here either based on the literature on opinion diffusion or on the results of our field study. By defining dynamics where agents influence each other, make collective decision at the group level, and decide to stay in or leave their respective groups, we analyse the effect of different parameters, like size of organizations, on the stability and representativeness of these organizations. The models proves to be robust and we believe is easy to adapt to other context than AMAP. Moreover the article highlights the tension that exists between stability and representativeness in democratic organizations, along with the negative effect of increasing the number of topics to discuss and the positive effect of having openminded members.
    Keywords: democracy,organizations,opinion dynamics,agent based modeling
    Date: 2019–03
  9. By: Pal, Rupayan; Sharma, Ajay
    Abstract: Leadership (sequential choice) and political delegation are two mechanisms suggested to restrict ‘race-to-the-bottom’ in tax competition. In this paper, we analyze whether these two mechanisms when combined together would lead to unilaterally higher taxation or not. We show that political delegation with leadership in tax competition not only restricts ‘race-to-the-bottom’ but also mitigates the possibility of over provision of public good. In sequential choice game, only the follower region delegates taxation power to the policy maker but not the leader region. This puts a check on intensity of tax competition and leads to optimal provision of public good.
    Keywords: Political delegation, Foreign-owned mobile capital, Sequential tax competition, Public good provision, Fiscal competition
    JEL: D7 F21 H25 H42 R5
    Date: 2018–12–18
  10. By: Andrea Isoni (Warwick Business School); Robert Sugden (University of East Anglia); Jiwei Zheng (University of East Anglia)
    Abstract: We report the results of a new tacit bargaining experiment that provides two key insights on the effects of payoff inequality on coordination and cooperation towards mutually beneficial outcomes. The experiment features the novel Pizza Night game, which can disentangle the effects of payoff inequality from those of conflict of interest. When coordination relies on focal points based on labelling properties, payoff inequality does not interfere with the successful use of those properties. When coordination results in mutual benefit, payoff inequality is not an obstacle to the realisation of efficiency. Conflict of interest is the main barrier to successful coordination.
    Keywords: Pizza Night game, tacit bargaining, conflict of interest, payoff inequality, focal points
    JEL: C72 C78 C91
    Date: 2018–05
  11. By: Mike Brock (University of East Anglia); Joel Russell (University of East Anglia)
    Abstract: This report outlines and reviews the findings of a collaborative project between researchers at The University of East Anglia (UEA) and Brandon Country Park. The former were commissioned to undertake two surveys to elicit the opinions of current users and stakeholders regarding their perceptions of the park, with particular emphasis on how this improves their mental, physical and social well-being. Information was then used to identify how the facility might be improved. 200 surveys were conducted through July 2016, asking questions which referred to park usage, attitudes and socio-demographic status. These responses were combined with a qualitative focus group, and using these mixed-methods field experiment techniques provided an in-depth examination of user perspectives on how to best manage this woodland amenity. The overall results pinpoint some key interactions between the key mental and physical benefits of such a facility, and yet the trade-offs that these human sources of welfare may create for wider biodiversity conservation.
    Keywords: Collective Decision-Making; Local Public Goods; Forest Management; Environmental Sustainability, Biodiversity Conservation;
    JEL: D71 H4 Q23 Q26 Q28 Q57
    Date: 2018–01–30
  12. By: Justus Baron; Jorge Contreras; Martin Husovec; Pierre Larouche
    Abstract: This study provides a comprehensive analysis of the governance of standard development organizations (SDOs), with a particular emphasis on organizations developing standards for Information and Communication Technologies (ICT). The analysis is based on 17 SDO case studies, a survey of SDO stakeholders, an expert workshop, and a comprehensive review of the legal and economic literature. The study considers the external factors conditioning SDO decision making on rules and procedures, including binding legal requirements, government influence, the network of cooperative relationships with other SDOs and related organizations, and competitive forces. SDO decision-making is also shaped by internal factors, such as the SDOs’ institutional architecture of decision-making bodies and their respective decision-making processes, which govern the interaction among SDO stakeholders and between stakeholders and the SDO itself. The study also analyzes governance principles, such as openness, balance of interests, and consensus decision-making, and discusses their interplay. The insights from these analyses are applied to SDO decision making on Intellectual Property Rights (IPR) policies, which represents a particularly salient and controversial aspect of SDO policy development.
    Keywords: Standard developing organizations, governance, intellectual property rights
    Date: 2019–03
  13. By: Stamatopoulos, Giorgos
    Abstract: We revisit cooperative games with externalities, i.e. cooperative games where the payoff of a coalition depends on the partition of the entire set of players. We define the worth of a coalition assuming that its members have probabilistic beliefs over the coalitional behavior of the outsiders, i.e., they assign various probability distributions on the set of partitions that the outsiders can form. We apply this framework to symmetric aggregative games and derive conditions on coalitional beliefs that guarantee the non-emptiness of the core of the induced cooperative games.
    Keywords: cooperative game; aggregative game; probabilistic belief; core
    JEL: C7 C71
    Date: 2018
  14. By: Francesco Vona (Observatoire français des conjonctures économiques)
    Abstract: Political acceptability is an essential issue in choosing appropriate climate policies. Sociologists and behavioural scientists recognize the importance of selecting environmental policies that have broad political support, while economists tend to compare different instruments first on the basis of their efficiency, and then by assessing their distributional impacts and thus their political acceptability. This paper examines case-study and empirical evidence that the job losses ascribed (correctly or incorrectly) to climate policies have substantial impacts on the willingness of affected workers to support these policies. In aggregate, the costs of these losses are significantly smaller than the benefits, both in terms of health and, probably, of labour market outcomes, but the losses are concentrated in specific areas, sectors and social groups that have been hit hard by the great recession and international competition. Localized contextual effects, such as peer group pressure, and politico-economic factors, such as weakened unions and tightened government budgets, amplify the strength and the persistence of the ‘job-killing’ argument. Compensating for the effects of climate policies on ‘left-behind’ workers appears to be the key priority to increase the political acceptability of such policies, but the design of compensatory policies poses serious challenges.
    Keywords: Climate policies; Employment impacts; Distributional impacts; Collective action problems; Amplification mechanisms; Political acceptability
    Date: 2019–02

This nep-cdm issue is ©2019 by Stan C. Weeber. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.