nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2019‒10‒14
eleven papers chosen by
Stan C. Weeber, McNeese State University

  1. On Existence of Equilibrium Under Social Coalition Structures By Bugra Caskurlu; Ozgun Ekici; Fatih Erdem Kizilkaya
  2. Voter Heterogeneity and Political Corruption By Enriqueta Aragonès; Javier Rivas; Áron Tóth
  3. Legislative bargaining with joint production: An experimental study By Merkel, Anna; Vanberg, Christoph
  4. Susceptibility to Manipulation by Sincere Truncation : the Case of Scoring Rules and Scoring Runoff Systems By Eric Kamwa; Issofa Moyouwou
  5. Civic Engagement as a Second-Order Public Good: The Cooperative Underpinnings of the Accountable State By Kamei, Kenju; Putterman, Louis; Tyran, Jean-Robert
  6. Trading and shareholder voting By Levit, Doron; Malenko, Nadya; Maug, Ernst
  7. Group Hug: Platform Competition with User-groups By Sarit Markovich; Yaron Yehezkel
  8. Can ATMs Get Out the Vote? Evidence from a Nationwide Field Experiment By Pereira Santos, João; Tavares, José; Vicente, Pedro C
  9. Condorcet efficiency of general weighted scoring rules under IAC: indifference and abstention By Mostapha Diss; Eric Kamwa; Issofa Moyouwou; Hatem Smaoui
  10. Political Openness and Armed Conflict: Evidence from Local Councils in Colombia By Hector Galindo-Silva
  11. Staying dry on Spanish wine: the rejection of the 1905 Spanish-Italian trade agreement By Jacopo Timini

  1. By: Bugra Caskurlu; Ozgun Ekici; Fatih Erdem Kizilkaya
    Abstract: In a strategic form game a strategy profile is an equilibrium if no viable coalition of agents (or players) benefits (in the Pareto sense) from jointly changing their strategies. Weaker or stronger equilibrium notions can be defined by considering various restrictions on coalition formation. In a Nash equilibrium, for instance, the assumption is that viable coalitions are singletons, and in a super strong equilibrium, every coalition is viable. Restrictions on coalition formation can be justified by communication limitations, coordination problems or institutional constraints. In this paper, inspired by social structures in various real-life scenarios, we introduce certain restrictions on coalition formation, and on their basis we introduce a number of equilibrium notions. As an application we study our equilibrium notions in resource selection games (RSGs), and we present a complete set of existence and non-existence results for general RSGs and their important special cases.
    Date: 2019–10
  2. By: Enriqueta Aragonès; Javier Rivas; Áron Tóth
    Abstract: We show that policies that eliminate corruption can depart from socially desirable policies and this inefficiency can be large enough to allow corruption to live on. Political competition between an honest (welfare maximiser) and corrupt politicians is studied. In our model the corrupt politician is at a distinct disadvantage: there is no asymmetric information, no voter bias and voters are fully rational. Yet, corruption cannot be eliminated when voters have heterogeneous preferences. Moreover, the corrupt politician can win the majority, as the honest politician tries to trade off the cost of eliminating corruption with its beneffits.
    Keywords: political corruption, political competition, voting
    JEL: D72
    Date: 2019–10
  3. By: Merkel, Anna; Vanberg, Christoph
    Abstract: We conduct 3-person bargaining experiments in which the surplus being divided is produced by completing a prior task. Using a Baron-Ferejohn framework, we investigate how differences in contributions to production affect bargaining under different decision rules. Under unanimity rule, all proposals and agreements constitute convex combinations of the equal and proportional splits. Contrary to our predictions, this pattern largely persists under majority rule. In sharp contrast to prior experiments in which an exogenous surplus is divided, few subjects attempt to build minimum winning coalitions when the surplus is jointly produced.
    Keywords: multilateral bargaining; claims; fairness; majority rule; experiments
    Date: 2019–10–11
  4. By: Eric Kamwa (LC2S - Laboratoire caribéen de sciences sociales - CNRS - Centre National de la Recherche Scientifique - UA - Université des Antilles); Issofa Moyouwou (MASS - Université de Yaoundé I [Yaoundé], Université de Yaoundé I [Yaoundé])
    Abstract: A voting rule is said to be vulnerable to the truncation paradox if some voter may favor the election of a more preferable outcome by listing only part of his sincere ranking on the competing candidates than listing his entire preference ranking on all the competing candidates (Brams, 1982, Fishburn and Brams, 1983). For three-candidate elections and for large electorates, this paper provides under the Impartial Anonymous Culture assumption (IAC), an evaluation of the likelihood of the truncation paradox the whole family of the scoring rules and runoff scoring rules.
    Date: 2020
  5. By: Kamei, Kenju; Putterman, Louis; Tyran, Jean-Robert
    Abstract: Effective states provide public goods by taxing their citizens and imposing penalties for non-compliance. However, accountable government requires that enough citizens are civically engaged. We study the voluntary cooperative underpinnings of the accountable state by conducting a two-level public goods experiment in which civic engagement can build a sanction scheme to solve the first-order public goods dilemma. We find that civic engagement can be sustained at high levels when costs are low relative to the benefits of public good provision. This cost-to-benefit differential yields what we call a "leverage effect" because it transforms modest willingness to cooperate into the larger social dividend from the power of taxation. In addition, we find that local social interaction among subgroups of participants also boosts cooperation.
    Keywords: Civic engagement; Cooperation; Experiment; Public goods provision
    JEL: C92 D02 D72 H41
    Date: 2019–09
  6. By: Levit, Doron; Malenko, Nadya; Maug, Ernst
    Abstract: We study shareholder voting in a model in which trading affects the composition of the shareholder base. In this model, trading and voting are complementary, which gives rise to self-fulfilling expectations about proposal acceptance. We show three main results. First, increasing liquidity and trading opportunities may reduce prices and welfare, because it allows shareholders with more extreme preferences to accumulate large positions and impose their views on more moderate shareholders through voting. Second, prices and welfare can move in opposite directions, which suggests that the former is an invalid proxy for the latter. Third, delegation of the decision to a board of directors may strictly improve shareholder value. However, the optimal board is generally biased, should not be representative of current shareholders, and may not always garner voting support from the majority of shareholders.
    Keywords: corporate governance; Shareholder rights; Trading; voting
    JEL: D74 D82 D83 G34 K22
    Date: 2019–10
  7. By: Sarit Markovich (Kellogg School of Management, Northwestern University, Evanston, IL, USA); Yaron Yehezkel (Coller School of Management, Tel Aviv University, Ramat Aviv, Israel)
    Abstract: We consider platform competition in the presence of small users and a user-group. One platform enjoys a quality advantage and the other benefits from favorable beliefs. We study whether the group mitigates the users' coordination problem –i.e., joining a low-quality platform because they believe that other users would do the same. We find that when the group is sufficiently large to facilitate coordination on the high-quality platform, the group may choose to join the low-quality one. When the group joins the more efficient platform it does not necessarily increase consumer surplus. Specifically, a non-group user benefits from a group with an intermediate size, and prefers a small group over a large group. The utility of a group user is also non-monotonic in the size of the group.
    Keywords: network externalities; coordination
    JEL: L1
    Date: 2019–09
  8. By: Pereira Santos, João; Tavares, José; Vicente, Pedro C
    Abstract: We report on a large-scale field experiment to assess ATMs (automatic teller machines) capacity to "get out the vote". This is a heretofore unexploited method. Our experimental design used the universe of functioning ATMs in Portugal. We randomly selected a set of treatment civil parishes, where a civic message took over the totality of ad time, which we compare with a set of control areas. The campaign we follow was active for three days before and during the 2017 local elections. Although we do not achieve statistical significance on a stable but small average treatment effect, when we consider the intensity of treatment, results show a statistically significant increase in the likelihood of voting. Placebo tests using turnout rates in previous elections strengthen our interpretation. We ran a post-treatment survey around ATMs located in two neighbouring civil parishes, one treated, the other not. We found a sizeable difference in recall.
    Keywords: ATMs; Local Elections; Portugal; Voter mobilization
    JEL: C93 D72 H70
    Date: 2019–09
  9. By: Mostapha Diss (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - Université de Lyon - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique); Eric Kamwa (LC2S - Laboratoire caribéen de sciences sociales - CNRS - Centre National de la Recherche Scientifique - UA - Université des Antilles); Issofa Moyouwou (MASS - Université de Yaoundé I [Yaoundé]); Hatem Smaoui (CEMOI - Centre d'Économie et de Management de l'Océan Indien - UR - Université de La Réunion)
    Abstract: In an election, individuals may sometimes abstain or report preferences that include ties among candidates. How abstention or ties within individual preferences impact the performances of voting rules is a natural question addressed in the literature. We reconsider this question with respect to one of the main characteristics of a voting rule: its Condorcet efficiency; that is the conditional probability that the rule selects a Condorcet winner assuming that one exists. We explore the impact of both ties and abstention on the Condorcet efficiency of the whole class of weighted scoring rules in three-candidate elections under the Impartial Anonymous Culture assumption. It appears in general that the possibility of indifference or abstention increases or decreases the Condorcet efficiency of weighted scoring rules depending of the rule in consideration or the probability distribution on the set of observable voting situations.
    Date: 2020
  10. By: Hector Galindo-Silva
    Abstract: In this paper, I empirically investigate how the openness of political institutions to diverse representation can impact conflict-related violence. By exploiting plausibly exogenous variations in the number of councillors in Colombian municipalities, I develop two sets of results. First, regression discontinuity estimates show that larger municipal councils have a considerably greater number of political parties with at least one elected representative. I interpret this result as evidence that larger municipal councils are more open to diverse political participation. The estimates also reveal that non-traditional parties are the main beneficiaries of this greater political openness. Second, regression discontinuity estimates show that political openness substantially decreases conflict-related violence, namely the killing of civilian non-combatants. By exploiting plausibly exogenous variations in local election results, I show that the lower level of political violence stems from greater participation by parties with close links to armed groups. Using data about the types of violence employed by these groups, and representation at higher levels of government, I argue that armed violence has decreased not because of power-sharing arrangements involving armed groups linked to the parties with more political representation, but rather because armed groups with less political power and visibility are deterred from initiating certain types of violence.
    Date: 2019–10
  11. By: Jacopo Timini (Banco de España)
    Abstract: After a long debate on wine import tariffs, the Italian Parliament failed to ratify the Spanish-Italian trade agreement on December 17th, 1905. This decision – an unusual episode for a country with relatively low level of protection – left Spain and Italy without a bilateral trade treaty for an entire decade. In the literature, broader political issues and local interests are alternatively indicated as the main drivers of the rejection. Based on a manually assembled database which collects economic and political variables, including MPs personal features, and using a probit model, this paper provides a quantitative analysis of the vote. Results show that constituency interests had a role in determining the result of the vote on the trade treaty. Moreover, constituency interests were also important for the “vote switchers”, i.e. those MPs that supported the overall government policy stance in the first round, but opposed the Spanish-Italian trade agreement in the second.
    Keywords: trade agreement, tariffs, wine, vote
    JEL: D72 F13 N43 N73
    Date: 2019–10

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