nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2019‒07‒15
twelve papers chosen by
Stan C. Weeber, McNeese State University

  1. The Heterogeneous Price of a Vote: Evidence from France, 1993-2014 By Yasmine Bekkouche; Julia Cage
  2. Your vote is (no) secret! How low voter density harms voter anonymity and biases elections in Italy By Mauro Caselli; Paolo Falco
  3. The Specter of the Giant Three By Lucian A. Bebchuk; Scott Hirst
  4. Contests within and between groups By Bhattacharya, Puja; Rampal, Jeevant
  5. Financial Inequality, group entitlements and populism By Federico Faveretto; Donato Masciandaro
  6. Single-crossing Implementation By Nathann Cohenn; Edith Elkind; Foram Lakhani
  7. «Hieroglyphs of protest»: Internet Memes and Protest Movement in Russia By Svetlana Shomova
  8. Disincentives from Redistribution: Evidence on a Dividend of Democracy By Sausgruber, Rupert; Sonntag, Axel; Tyran, Jean-Robert
  9. Hate at first sight? Dynamic aspects of the electoral impact of migration: The case of Ukip By Levi, Eugenio; Mariani, Rama Dasi; Patriarca, Fabrizio
  10. Teams promise but do not deliver By Nielsen, Kirby; Bhattacharya, Puja; Kagel, John H.; Sengupta, Arjun
  11. Friendship Networks and Political Opinions: A Natural Experiment among Future French Politicians By Algan, Yann; Dalvit, Nicolò; Do, Quoc-Anh; Le Chapelain, Alexis; Zenou, Yves
  12. Collective Actions: a Network Approach By Tiziano Distefano; Pietro Guarnieri

  1. By: Yasmine Bekkouche (Ecole d'Économie de Paris - Paris School of Economics (PSE)); Julia Cage (Département d'économie)
    Abstract: What is the impact of campaign spending on votes? Does it vary across election types and across political parties? Estimating these effects requires comprehensive data on spending across candidates, parties and elections, as well as identification strategies that successfully deal with the endogeneity of campaign spending. We provide novel contributions in both of these areas. We build a new comprehensive dataset of all French municipal and legislative elections over the 1993-2014 period. We propose two new instruments to overcome the endogenous nature of campaign spending; they rely on the fact that candidates are differentially affected by regulation on campaign funding depending on the source of funding they depend on the most. We find that an increase in spending per voter consistently increases a candidate’s vote share both for municipal and legislative elections, and that the effect is heterogeneous depending on the party. In particular, we show that spending by extreme-right candidates has much lower returns than spending by other parties. Our findings help reconcile the conflicting results of the existing literature, and improve our understanding of the mechanisms at play.
    Keywords: Elections; Campaign financing; Campaign expenditures; Campaign spending limits; Campaign finance reform; Multiparty electoral data; Heterogeneous effects of campaign spending
    JEL: D72 P48 H7
    Date: 2019–06
  2. By: Mauro Caselli; Paolo Falco
    Abstract: Italian voters are assigned to a specific polling station according to their address. After an election, candidates know how many votes they received in each polling station. When the number of voters per polling stations is low and candidates are many, this jeopardises the secrecy of voting and candi- dates can more easily detect deviations from pre-electoral pledges. Exploit- ing variation in the number of voters per polling station across cities and over time, combined with rich data on politicians in office in all Italian mu- nicipalities between 1989 and 2015, we estimate the effect of voter density on the probability of re-election for local politicians. We find that when the number of voters per polling station is lower (and secrecy is at greater risk), incumbents have a higher probability of re-election. The analysis addresses the potential endogeneity of voter density. The results are stronger in regions with lower social capital and worse institutions.
    Keywords: elections, secret ballot, incumbency advantage, polling stations, voter density, institutions, social capital, Italy
    JEL: D02 D72 H70
    Date: 2019
  3. By: Lucian A. Bebchuk; Scott Hirst
    Abstract: This paper examines the large, steady, and continuing growth of the Big Three index fund managers—BlackRock, Vanguard, and State Street Global Advisors. We show that there is a real prospect that index funds will continue to grow, and that voting in most significant public companies will come to be dominated by the future “Giant Three.” We begin by analyzing the drivers of the rise of the Big Three, including the structural factors that are leading to the heavy concentration of the index funds sector. We then provide empirical evidence about the past growth and current status of the Big Three, and their likely growth into the Giant Three. Among other things, we document that the Big Three have almost quadrupled their collective ownership stake in S&P 500 companies over the past two decades; that they have captured the overwhelming majority of the inflows into the asset management industry over the past decade; that each of them now manages 5% or more of the shares in a vast number of public companies; and that they collectively cast an average of about 25% of the votes at S&P 500 companies. We then extrapolate from past trends to estimate the future growth of the Big Three. We estimate that the Big Three could well cast as much as 40% of the votes in S&P 500 companies within two decades. Policymakers and others must recognize—and must take seriously—the prospect of a Giant Three scenario. The plausibility of this scenario makes it important to understand the incentives of index fund managers, a topic that we study in other work.
    JEL: G23 G34 K22
    Date: 2019–06
  4. By: Bhattacharya, Puja; Rampal, Jeevant
    Abstract: This paper examines behavior (the oretically and experimentally) in a two-stage group contest where the fi rst stage comprises of intra - group contests, followed by an inter-group contest in the second stage. Rewards accrue only to the members of the winning group in the inter-group contest, with the winners of the intra-group contest within that group receiving a greater reward. The model generates a discouragement effect, where losers from the first stage exert less effort in the second stage than winners. In contrast to previous frameworks of sequential contests, we show that a prior win may be disadvantageous, generating lower profits for first stage winners as compared to losers. We also consider asymmetry between groups arising from a biased contest success function in the second stage. We show that although the asymmetry occurs in the second stage, the effect of the asymmetry plays out in the first stage, with the intra-group contest being more intense within the advantaged group. Experimental results find broad support for the qualitative predictions of the model. However, we find that relative overcontribution in the second stage by losers is higher than by winners of the first stage, implying that losers bear a higher burden of the group contribution than deemed strategic.
    Keywords: Contests,Group Behavior,Collective Action,Asymmetry
    JEL: C72 C92 D72
    Date: 2019
  5. By: Federico Faveretto; Donato Masciandaro
    Abstract: This paper offers a theoretical framework that explains how financial inequality and misbeliefs about group entitlements among voters foster voting in favour of populist parties. When a banking shock occurs in an economy with heterogeneous agents, the central bank independently chooses the optimal degree of monetization to balance financial and monetary instability, while agents choose between a populist party and a classical party to select the degree of bank bailout, which is paid through a proportional tax. Agents vote according to a behavioural mechanism that we call “democratic rioting”: “aggrieved” agents benefit psychologically from voting for the populist party. The banking shock triggers a higher probability of voting for a populist party in the presence of financial inequality and misbeliefs about group entitlements.
    Keywords: Financial inequality, monetary policy, populism, banking policy, fiscal policy, central bank independence, political economics
    JEL: D72 D78 E31 E52 E58 E62
    Date: 2018
  6. By: Nathann Cohenn; Edith Elkind; Foram Lakhani
    Abstract: An election over a finite set of candidates is called single-crossing if, as we sweep through the list of voters from left to right, the relative order of every pair of candidates changes at most once. Such elections have many attractive properties: e.g., their majority relation is transitive and they admit efficient algorithms for problems that are NP-hard in general. If a given election is not single-crossing, it is important to understand what are the obstacles that prevent it from having this property. In this paper, we propose a mapping between elections and graphs that provides us with a convenient encoding of such obstacles. This mapping enables us to use the toolbox of graph theory in order to analyze the complexity of detecting nearly single-crossing elections, i.e., elections that can be made single-crossing by a small number of modifications.
    Date: 2019–06
  7. By: Svetlana Shomova (National Research University Higher School of Economics)
    Abstract: Political Internet meme is an underresearched contemporary phenomenon situated at the interface of digital media and political communication. Regarded as a unit of online transmission of cultural information, such a meme can be considered, on the on hand, as a manifestation of post-folklore, and on the other hand, as a mechanism of political participation and construction of social media users’ collective identity. The article presents the results of investigation into Internet memes generated by protest discourse in Runet (Russian Internet). Examination of a vast amount of Internet content allows drawing conclusions as to the thematic emphases of protest actions represented in Runet’s memosphere and to the specifics of the image of Russian protest as reflected in memes
    Keywords: political communication, political participation, new media, meme, internet meme, protest, Russia
    JEL: Z19
    Date: 2019
  8. By: Sausgruber, Rupert; Sonntag, Axel; Tyran, Jean-Robert
    Abstract: We experimentally study the disincentive effect of taxing work and redistributing tax revenues when redistribution is imposed vs. democratically chosen in a vote. We find a "dividend of democracy" in the sense that the disincentive effect is substantially smaller when redistribution is chosen in a vote than when it is imposed. Redistribution seems to be more legitimate, and hence less demotivating, when accepted in a vote.
    Keywords: disincentive effect; Lab Experiment; Legitimacy; Real effort task; redistribution; voting
    JEL: C92 D31 D72 H23
    Date: 2019–06
  9. By: Levi, Eugenio; Mariani, Rama Dasi; Patriarca, Fabrizio
    Abstract: In this paper, we test the hypothesis that the causal effect of immigrant presence on anti-immigrant votes is a short-run effect. For this purpose, we consider a distributed lag model and adapt the standard instrumental variable approach proposed by Altonji and Card (1991) to a dynamic framework. The evidence from our case study, votes for the UK Independent Party (Ukip) in recent European elections, supports our hypothesis. Furthermore, we find that this effect is robust to differences across areas in terms of population density and socioeconomic characteristics, and it is only partly explained by integration issues.
    Keywords: Immigration,Voting,Political Economy
    JEL: P16 J61 D72
    Date: 2019
  10. By: Nielsen, Kirby; Bhattacharya, Puja; Kagel, John H.; Sengupta, Arjun
    Abstract: Individuals and two-person teams play a hidden - action trust game with pre - play communication. We replicate previous results for individuals that non-binding promises increase cooperation rates. But this does not extend to teams. Wh ile teams make non-binding promises to cooperate at the same rate as individuals, they consistently renege on those promises. Additional treatments begin to explore the basis for the team outcome, ruling out explanations that team payoff structures drive b ehavior. Analysis of within-team discussions provides insight into the decision-making processes of first and second movers.
    Keywords: trust game,hidden-action,non-binding communication,teams versus individuals
    JEL: C72 C91 C92 D83
    Date: 2019
  11. By: Algan, Yann (Sciences Po and CEPR); Dalvit, Nicolò (Sciences Po); Do, Quoc-Anh (Sciences Po and CEPR); Le Chapelain, Alexis (Department of Economics); Zenou, Yves (Monach University)
    Abstract: We study how friendship shapes students' political opinions in a natural experiment. We use the indicator whether two students were exogenously assigned to a short-term \integration group", unrelated to scholar activities and dissolved before the school year, as instrumental variable for their friendship, to estimate the effect of friendship on pairwise political opinion outcomes in dyadic regressions. After six months, friendship causes a reduction of differences in opinions by one quarter of the mean difference. It likely works through a homophily-enforced mechanism, by which friendship causes politically-similar students to join political associations together, which reinforces their political similarity. The effect is strong among initially similar pairs, but absent in dissimilar pairs. Friendship affects opinion gaps by reducing divergence, therefore polarization and extremism, without forcing individuals' views to converge. Network characteristics also matter to the friendship effect.
    Keywords: Political opinion; Polarization; Friendship effect; Social networks; Homophily; Extremism; Learning; Natural experiment
    JEL: C93 D72 Z13
    Date: 2019–07–04
  12. By: Tiziano Distefano; Pietro Guarnieri
    Abstract: This paper contributes to the issue of collective action by advancing an epistemology of agency based on the idea that individuals' propensity to act (attitudes) depends on relevant features of their social context. To this purpose, we develop a network model that links the probability that an agent joins collective action to the characteristics of the social structure, which is, in turn, shaped by the activation of collective actions within it. Our underlying assumption is that preferences for collective action are not only an individual endowment, but crucially depend on collective processes, that affect preference formation and characterize rationality as ecological.
    Keywords: partial decenstralisation; party alignment; accountability; intergovernmental transfers
    JEL: B41 D85 D83
    Date: 2019–07–01

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