nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2019‒04‒15
sixteen papers chosen by
Stan C. Weeber
McNeese State University

  1. Quadratic voting with multiple alternatives By Eguia, Jon; Immorlica, Nicole; Ligett, Katrina; Weyl, Glen; Xefteris, Dimitrios
  2. Harsanyi power solutions for cooperative games on voting structures By Encarnación Algaba; Sylvain Béal; Eric Rémila; Phillippe Solal
  3. Securing Personal Freedom through Institutions – the Role of Electoral Democracy and Judicial Independence By Berggren, Niclas; Gutmann, Jerg
  4. The Logic of Fear: Populism and Media Coverage of Immigrant Crimes By Mathieu Couttenier; Sophie Hatte; Mathias Thoenig; Stephanos Vlachos
  5. Risk-averse and self-interested shifts in groups in both median and random rules By Yoshio Kamijo; Teruyuki Tamura
  6. Biased Forecasts to Affect Voting Decisions? The Brexit Case By Cipullo, Davide; Reslow, André
  7. Strict Fairness of Equilibria in Mixed and Asymmetric Information Economies By Chiara Donnini; Maria Laura Pesce
  8. Shadow links By FOERSTER Manuel,; MAULEON Ana,; VANNETELBOSCH Vincent,
  9. How Common are Electoral Cycles in Criminal Sentencing? By Christian Dippel; Michael Poyker
  10. Do Party Positions Affect the Public's Policy Preferences? By Grewenig, Elisabeth; Lergetporer, Philipp; Werner, Katharina; Woessmann, Ludger
  11. Building consensus: Shifting strategies in the territorial targeting of Turkey's public transport investment By Davide Luca; Andrés Rodríguez-Pose
  12. Foreign influence and domestic policy: a survey By Toke Aidt; Facundo Albornoz; Esther Hauk
  13. Learning to cooperate in the shadow of the law By Roberto Galbiati; Emeric Henry; Nicolas Jacquemet
  14. Individual and social preferences under risk: laboratory evidence on the group size effect By Morone, Andrea; Caferra, Rocco
  15. The Democracy Effect: a Weights-Based Identification Strategy By Pedro Dal Bó; Andrew Foster; Kenju Kamei
  16. Cooperative games on intersection closed systems and the Shapley value By Sylvain Béal; Issofa Moyouwou; Eric Rémila; Phillippe Solal

  1. By: Eguia, Jon (Michigan State University, Department of Economics); Immorlica, Nicole (Microsoft); Ligett, Katrina (Hebrew University); Weyl, Glen (Microsoft and Princeton); Xefteris, Dimitrios (University Cyprus)
    Abstract: Consider the following collective choice problem: a society of budget-constrained agents faces multiple alternatives and wants to reach an e¢ cient decision (i.e. to Nash implement the utilitarian maximum). In this paper, we propose a budget-balanced vote-buying mechanism for this setting: for each alternative, every voter can cast any number of votes, x, in support or against it, by transferring an amount x2 to the rest of the voters; and the outcome is determined by the net vote totals. We prove that as the society grows large, in every equilibrium of the mechanism, each agent's transfer converges to zero, and the probability that the mechanism chooses the socially efficient outcome converges to one.
    Keywords: implementation; efficiency; mechanism design; quadratic voting; multiple alternatives
    JEL: D61 D71 D72
    Date: 2019–04–04
  2. By: Encarnación Algaba (Matemática Aplicada II and Instituto de Matemáticas de la Universidad de Sevilla, Escuela Superior de Ingenieros, Sevilla, Spain); Sylvain Béal (Université de Bourgogne Franche-Comté, CRESE); Eric Rémila (Université de Saint-Etienne, Gate); Phillippe Solal (Université de Saint-Etienne, Gate)
    Abstract: This paper deals with Harsanyi power solutions for cooperative games in which partial cooperation is based on specific union stable systems given by the winning coalitions derived from a voting game. This framework allows for analyzing new and real situations in which there exists a feedback between the economic influence of each coalition of agents and its political power. We provide an axiomatic characterization of the Harsanyi power solutions on the subclass of union stable systems arisen from the winning coalitions from a voting game when the influence is determined by a power index. In particular, we establish comparable axiomatizations, in this context, when considering the Shapley-Shubik power index, the Banzhaf index and the Equal division power index which reduces to the Myerson value on union stable systems. Finally, a new characterization for the Harsanyi power solutions on the whole class of union stable systems is provided and, as a consequence, a characterization of the Myerson value is obtained when the equal power measure is considered.
    Date: 2018–11
  3. By: Berggren, Niclas (Research Institute of Industrial Economics (IFN)); Gutmann, Jerg (Institute of Law & Economics)
    Abstract: Personal freedom is highly valued by many and a central element of liberal political philosophy. Although personal freedom is frequently associated with electoral democracy, developments in countries such as Hungary, Poland, Turkey and Russia, where elected populist leaders with authoritarian tendencies rule, suggest that electoral democracy may not be the envisaged unequivocal guarantor of freedom. Instead, an independent judicial system, insulated from everyday politics, might provide a firmer foundation. We investigate empirically how electoral democracy and judicial independence relate to personal freedom, as quantified by the new Human Freedom Index. Our findings reveal that while judicial independence is positively and robustly related to personal freedom in all its forms, electoral democracy displays a robust relationship with two out of seven types of personal freedom only (freedom of association, assembly and civil society as well as freedom of expression and information). These are types of freedom associated with democracy itself, but democracy seems unable to protect freedom in other dimensions. When we study interaction effects and make use of more refined indicators of the political system in place, we find that countries without elections or with only one political party benefit more from judicial independence than both democracies and multi-party systems without free elections. A number of robustness checks confirm these findings. Hence, it seems as if personal freedom has institutional correlates in the form of both democracy and judicial independence, with the latter safeguarding freedom more consistently and more strongly.
    Keywords: Freedom; Democracy; Judicial independence; Political economy; Institutions
    JEL: D63 D72 D78 K36 P48
    Date: 2019–04–03
  4. By: Mathieu Couttenier (University of Lyon, ENS de Lyon, Gate UMR 5824, F-69342 Lyon, France and CEPR); Sophie Hatte (University of Lyon, ENS de Lyon, Gate UMR 5824, F-69342 Lyon, France); Mathias Thoenig (Department of Economics, University of Lausanne and CEPR); Stephanos Vlachos (Department of Economics, University of Vienna)
    Abstract: We study how news coverage of immigrant criminality impacted municipality-level votes in the November 2009 “minaret ban” referendum in Switzerland. The campaign, successfully led by the populist Swiss People’s Party, played aggressively on fears of Muslim immigration and linked Islam with terrorism and violence. We combine an exhaustive violent crime detection dataset with detailed information on crime coverage from 12 newspapers. The data allow us to quantify the extent of pre-vote media bias in the coverage of migrant criminality. We then estimate a theory-based voting equation in the cross-section of municipalities. Exploiting random variations in crime occurrences, we find a first-order, positive effect of news coverage on political support for the minaret ban. Counterfactual simulations show that, under a law forbidding newspapers to disclose a perpetrator’s nationality, the vote in favor of the ban would have decreased by 5 percentage points (from 57.6% to 52.6%).
    Keywords: Media, Violent crime, Immigration, Vote, Populism
    JEL: D72 L82 Z12 K42
    Date: 2019
  5. By: Yoshio Kamijo (School of Economics and Management, Kochi University of Technology); Teruyuki Tamura (Department of Management, Kyoto College of Economics)
    Abstract: This study examines whether attitudes toward risk and altruism are affected by being in a group or being alone. Differing from previous economic studies of group decision-making, we attempt to exclude the effects of group informal discussion, which are thought to be a black box when individuals make decisions in a group. Subjects in our experiment were requested only to show their faces to other members without any further communication. Moreover, we adopted two collective decision rules—namely, the median rule and the random rule—which provide the truth-telling mechanism. In experiments of both anonymous investments and donations, we found that subjects who made decisions in a group offered significantly lower amounts than individuals who made decisions alone, even controlling for individuals’ risk and altruistic preferences. Our results indicate that people are more risk averse and self-interested when they are in a group regardless of which collective decision rules are adopted.
    Keywords: Group decision, Individual decision, Altruism, Decision under risk
    JEL: C91 C92 D81
    Date: 2019–04
  6. By: Cipullo, Davide (Department of Economics); Reslow, André (Department of Economics)
    Abstract: This paper introduces macroeconomic forecasters as political agents and suggests that they use their forecasts to infuence voting outcomes. We develop a probabilistic voting model in which voters do not have complete information about the future states of the economy and have to rely on macroeconomic forecasters. The model predicts that it is optimal for forecasters with economic interest (stakes) and influence to publish biased forecasts prior to a referendum. We test our theory using high-frequency data at the forecaster level surrounding the Brexit referendum. The results show that forecasters with stakes and influence released much more pessimistic estimates for GDP growth in the following year than other forecasters. Actual GDP growth rate in 2017 shows that forecasters with stakes and influence were also more incorrect than other institutions and the propaganda bias explains up to 50 percent of their forecast error.
    Keywords: Brexit; Interest Groups; Forecasters Behavior; Voting
    JEL: D72 D82 E27 H30
    Date: 2019–03–13
  7. By: Chiara Donnini (Università di Napoli Parthenope); Maria Laura Pesce (Università di Napoli Federico II)
    Abstract: We investigate the fairness property of equal-division competitive market equilibria (CME) in asymmetric information economies with a space of agents that may contain non-negligible (large) traders. We first propose an extension to our framework of the notion of strict fairness due to Zhou (1992). We prove that once agents are asymmetrically informed, any equal-division CME allocation is strictly fair, but a strictly fair allocation might not be supported by an equilibrium price. Then, we investigate the role of large traders and we provide two sufficient conditions under which, in the case of complete information economies, a redistribution of resources is strictly fair if and only if it results from a competitive mechanism.
    Keywords: Asymmetric information, mixed markets, strict fairness, competitive equilibrium.
    JEL: D43 D60 D82
    Date: 2019–04–08
  8. By: FOERSTER Manuel, (Universität Hamburg); MAULEON Ana, (Université Saint-Louis Bruxelles and CORE, UCLouvain); VANNETELBOSCH Vincent, (CORE, UCLouvain)
    Abstract: We propose a framework of network formation where players can form two types of links: public links are observed by everyone and shadow links are only observed by neighbors. We introduce a novel solution concept called rationalizable peer-confirming pairwise stability, which generalizes Jackson and Wolinsky (1996)’s pairwise stability notion to accommodate shadow links. We then study the case when public links and shadowlinks are perfect substitutes and relate our concept to pairwise stability. Finally, we consider two specific models and show how false beliefs about others’ behavior may lead to segregation in friendship networks with homophily, reducing social welfare.
    Keywords: network formation, peer-confirming beliefs, private information, rationalizability, shadow links, stability
    JEL: A14 C70 D82 D85
    Date: 2018–10–01
  9. By: Christian Dippel; Michael Poyker
    Abstract: Existing empirical evidence suggests a pervasive pattern of electoral cycles in criminal sentencing in the U.S.: judges appear to pass more punitive sentences when they are up for re-election, consistent with models of signaling where voters have more punitive preferences than judges. However, this pervasive evidence comes from only three states. Combining the existing evidence with data we collected from eight additional states, we are able to reproduce previous results, but find electoral cycles in only one of the eight additional states. Sentencing cycles appear to be the exception rather than the norm. We find that their existence hinges on the level of competition in judicial elections, which varies considerably across states.
    JEL: D72 H76 K41
    Date: 2019–03
  10. By: Grewenig, Elisabeth (Ifo Institute for Economic Research); Lergetporer, Philipp (Ifo Institute for Economic Research); Werner, Katharina (Ifo Institute for Economic Research); Woessmann, Ludger (Ifo Institute for Economic Research)
    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
  11. By: Davide Luca; Andrés Rodríguez-Pose
    Abstract: A growing amount of research explores how the allocation of regional development monies follows electoral reasons. Yet, the existing literature on distributive politics provides different and contrasting expectations on which geographical areas will be targeted. We focus on proportional representation (PR) systems. While in such settings governments have incentives to target core districts and punish foes', we suggest that when incumbents attempt to build a state-party image they may broaden the territorial allocation of benefits and even target opposition out-groups. We exploit data on Turkey's public transport investment for the period 2003-2014 and in-depth interviews to provide results in support of our hypothesis.
    Keywords: Public investment, transport infrastructure, distributive politics, politics of development, Turkey
    JEL: D72 H70 O18 O43
    Date: 2019–04
  12. By: Toke Aidt; Facundo Albornoz; Esther Hauk
    Abstract: In an interconnected world, economic and political interests inevitably reach beyond national borders. Since policy choices generate external economic and political costs, foreign state and non-state actors have an interest in inflencing policy actions in other sovereign countries to their advantage. Foreign influence is a strategic choice aimed at internalizing these externalities and takes many forms. We distinguish three broad types of intervention strategies, (i) voluntary agreement interventions between the intervening foreign power and the target country, (ii) policy interventions based on rewarding or sanctioning the target country to obtain a specific change in policy and (iii) institution interventions aimed at influencing the policy choice by changing the political institutions in the target country (with or without a civil war). We propose a unifying theoretical framework to understand when and which form of foreign influence is chosen and use it to organize and evaluate the new political economics literature on foreign influence along with work in cognate disciplines. Foreign intervention plays a more important role for a proper understanding of domestic policy choices, for institutional dynamics and for internal conflict than is commonly acknowledged in both empirical and theoretical research.
    Keywords: foreign influence, international agreements, institutions, aid, sanctions, conflict
    JEL: D70 D72 D74 F13 F23 F51 F53
    Date: 2019
  13. By: Roberto Galbiati (Département d'économie); Emeric Henry (Département d'économie); Nicolas Jacquemet (Centre d'économie de la Sorbonne (CNRS/UP 1))
    Abstract: How does the exposure to past institutions affect current cooperation? While a growing literature focuses on behavioral channels, we show how cooperation-enforcing institutions affect rational learning about the group’s value. Strong institutions, by inducing members to cooperate, may hinder learning about intrinsic values in the group. We show, using a lab experiment with independent interactions and random rematching, that participants behave in accordance with a learning model, and in particular react differently to actions of past partners whether they were played in an environment with coercive enforcement or not.
    Keywords: Enforcement; Social values; Cooperation; Learning spillovers; Persistence of institutions; Repeated games; Experiments
    JEL: C91 C73 D02 K49 P16 Z1
    Date: 2019–04
  14. By: Morone, Andrea; Caferra, Rocco
    Abstract: In this paper we investigated group size impact on social risk aversion when a majority rule is applied. We used the well-known Holt and Laury's (2002) mechanism to elicit individuals and social risk attitudes. We observed a risk shift in small group and a vanishing of such effect as group size increase.
    Keywords: Preferences; Group; Risk Attitude; Majority Rule; Laboratory
    JEL: C9
    Date: 2019–03–19
  15. By: Pedro Dal Bó; Andrew Foster; Kenju Kamei
    Abstract: Dal Bó, Foster and Putterman (2010) show experimentally that the effect of a policy may be greater when it is democratically selected than when it is exogenously imposed. In this paper we propose a new and simpler identification strategy to measure this democracy effect. We derive the distribution of the statistic of the democracy effect, and apply the new strategy to the data from Dal Bó, Foster and Putterman (2010) and data from a new real-effort experiment in which subjects’ payoffs do not depend on the effort of others. The new identification strategy is based on calculating the average behavior under democracy by weighting the behavior of each type of voter by its prevalence in the whole population (and not conditional on the vote outcome). We show that use of these weights eliminates selection effects under certain conditions. Application of this method to the data in Dal Bó, Foster and Putterman (2010) confirms the presence of the democracy effect in that experiment, but no such effect is found for the real-effort experiment.
    JEL: C9 D02 D7
    Date: 2019–04
  16. By: Sylvain Béal (Université de Bourgogne Franche-Comté, CRESE); Issofa Moyouwou (Department of Mathematics, University of Yaounde I - Cameroon); Eric Rémila (Université de Saint-Etienne, Gate); Phillippe Solal (Université de Saint-Etienne, Gate)
    Abstract: A situation in which a finite set of agents can obtain certain payoffs by cooperation can be described by a cooperative game with transferable utility, or simply a TU-game. In the literature, various models of games with restricted cooperation can be found, in which only certain subsets of the agent set are allowed to form. In this article, we consider such sets of feasible coalitions that are closed under intersection, i.e., for any two feasible coalitions, their intersection is also feasible. Such set systems, called intersection closed systems, are a generalization of the convex geometries. We use the concept of closure operator for intersection closed systems and we define the restricted TU-game taking into account the limited possibilities of cooperation determined by the intersection closed system. Next, we study the properties of this restricted TU-game. Finally, we introduce and axiomatically characterize a family of allocation rules for games TU-games on intersection closed systems, which contains a natural extension of the Shapley value.
    Date: 2018–12

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