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on Collective Decision-Making |
| By: | Alejandro Caparrós (Institute for Public Goods and Policies, Spanish National Research Council); Michael Finus (University of Graz, Austria) |
| Abstract: | We analyze the formation of public good agreements under the weakest-link technology. Whereas policy coordination is not necessary for symmetric players, it matters for asymmetric players; however, this fails in the absence of transfers. By contrast, with a transfer scheme, asymmetry may be an asset for cooperation. We characterize various types and degrees of asymmetry and relate them to the stability of self-enforcing agreements. Asymmetric distributions of autarky public good provision levels (also representing asymmetric interests in cooperation) that are positively skewed tend to be conducive to the stability of agreements. We show that under such conditions, even a coalition including all players can be stable. However, asymmetries that foster stability (instability) tend to be associated with low (high) gains from cooperation. We analyze the formation of public good agreements under the weakest-link technology. Whereas policy coordination is not necessary for symmetric players, it matters for asymmetric players; however, this fails in the absence of transfers. By contrast, with a transfer scheme, asymmetry may be an asset for cooperation. We characterize various types and degrees of asymmetry and relate them to the stability of self-enforcing agreements. Asymmetric distributions of autarky public good provision levels (also representing asymmetric interests in cooperation) that are positively skewed tend to be conducive to the stability of agreements. We show that under such conditions, even a coalition including all players can be stable. However, asymmetries that foster stability (instability) tend to be associated with low (high) gains from cooperation. |
| Keywords: | Public goods; weakest-link technology; agreement formation |
| JEL: | C7 D7 H4 H7 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:grz:wpaper:2019-13&r=all |
| By: | Natalia Jiménez Jiménez (Departamento de Economía, Métodos Cuantitativos e Historia Económica, University Pablo de Olavide.); Elena Molis (Department of Economic Theory and Economic History, University of Granada.); Ángel Solano García (Department of Economic Theory and Economic History, University of Granada.) |
| Abstract: | The main purpose of this paper is to shed some light on the voting behavior of low-income voters over income redistribution. To this end, we test a model based on Meltzer and Richard’s (1981) framework through a lab experiment in which individuals vote over two exogenous tax rates and their pre-tax income is determined according to their performance in a real-effort task. We classify individuals into highskilled and low-skilled participants according to their performance in a tournament at the beginning of the experiment. We find that a large proportion of low-skilled workers vote for the lowest tax rate (the one that gives them the lowest payoff), especially when the alternative tax rate is very high. However, this proportion is significantly reduced in treatments in which the subjects are given extra information about how the tax operates in redistributing income. This result suggests that the lack of information about the role of taxes in income redistribution may be an important factor in explaining the counter-intuitive voting behavior of low-income voters over income redistribution. We also find that both the prospect of upward mobility and the belief in the negative effect of taxes on productivity make low-income voters support low tax rates, especially when the alternative tax rate is very high. |
| Keywords: | income inequality, income redistribution, voting, taxation, real-effort task. |
| JEL: | C92 D72 H30 J41 |
| Date: | 2019–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:gra:wpaper:19/11&r=all |
| By: | Melissa Newham; Rune Midjord |
| Abstract: | We develop a structural model to address the question whether, and to what extent, expert panelists engage in herd behavior when voting on important policy questions. Our data comes from FDA advisory committees voting on questions concerning the approval of new drug applications. We utilize a change in the voting procedure from sequential to simultaneous voting to identify herding. Estimates suggest that around half of the panelists are willing to vote against their private assessment if votes from previous experts indicate otherwise and, on average, 9 percent of the sequential votes are actual herd-votes. Temporary committee members are more prone to herding than regular (standing) members. We find that simultaneous voting improves information aggregation given our estimates. |
| Keywords: | Herd behavior, expert committees, structural estimation, FDA, public health |
| JEL: | D72 D82 D83 D91 I10 I18 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1825&r=all |
| By: | Ryo Arawatari (Faculty of Economics, Doshisha University,); Tetsuo Ono (Graduate School of Economics, Osaka University) |
| Abstract: | This study considers how present-biased preferences influence public debt policy when a violation of debt rules is possible. To address this issue, the study extends the framework of Bisin, Lizzeri, and Yariv (American Economic Review 105, (2015), 1711?1737) by allowing for rule breaking with extra costs, and we show that rule breaking occurs when a country exhibits a strong present bias. We further extend the model by introducing a political process for determining the debt rule, and we show that a polarization of debt rules emerges between countries with high and low degrees of present bias. |
| Keywords: | Debt ceilings; Present bias; Public debt. |
| JEL: | D72 D78 H62 H63 |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:osk:wpaper:1914&r=all |
| By: | Aguiar-Conraria, Luís; Magalhães, Pedro C.; Vanberg, Christoph A. |
| Abstract: | Many political systems with direct democracy mechanisms have adopted rules preventing decisions from being made by simple majority rule. The device most commonly added to majority rule in national is a quorum requirement. The two most common are the participation and the approval quora. Such rules are a response to three major concerns: the legitimacy of the referendum outcome, its representativeness (the concern with the outcome representing the will of the whole electorate), and protection of minorities regarding issues that should demand a broad consensus. Guided by a pivotal voter model, we conduct a laboratory experiment to investigate the performance of different quora in reaching such goals. We introduce two main innovations in relation to previous work on the topic. First, part of the electorate goes to the polls out of a sense of civic duty. Second, we test the performance of a different quorum, the rejection quorum, recently proposed in the literature. We conclude that, depending on the preferred criterion, either the approval or the rejection quorum is to be preferred. |
| Keywords: | election design; participation quorum; approval quorum; laboratory experiment |
| Date: | 2019–10–16 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0671&r=all |
| By: | Jana Friedrichsen; Tobias König; Tobias Lausen |
| Abstract: | We analyze the political economy of the public provision of private goods when individuals care about their social status. Status concerns motivate richer individuals to vote for the public provision of goods they themselves buy in markets: a higher provision level attracts more individuals to the public sector, enhancing the social exclusivity of market purchases. Majority voting may lead to a public provision that only a minority of citizens use. Users in the public sector may enjoy better provision than users in the private system. We characterize the coalitions that can prevail in a political equilibrium. |
| Keywords: | In-kind provision, Status preferences, Majority voting |
| JEL: | H42 D72 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1824&r=all |
| By: | Victor Ginsburgh; J.D. Moreno-Ternero |
| Abstract: | Confidence in the institutions of the EU was obviously shocked by the intention of Great Britain to Brexit. We suggest introducing a lingua franca in the EU which could partly repair this irritation, as surveys show that citizens would be very favourable to such an idea. We also advocate that the EU should help member countries by contributing to the cost of such an endeavour. Each country would have the right to claim a compensation based on the number of young citizens who do not -yet- speak the chosen common language. The EU budget would then be distributed fairly, in proportion to the claims. We assume that the choice should be made among three languages: English -yes, even if Brexit takes place-, German and French, and analyze the pros and cons of each of them. We finally look at what the existing voting procedures used by EU bodies would lead to. The result of such a vote is far from being obvious, and maybe the vote should be left to countries, with the exception of those whose native languages are English, German and French. |
| Keywords: | European Union, lingua franca, resource allocation, sacri fices, Brexit |
| Date: | 2019–10 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/294514&r=all |
| By: | Maksim Gladyshev (National Research University Higher School of Economics) |
| Abstract: | Correct aggregation of individual preferences into collective one is central problem of nowadays Social Choice theory. After the Arrow’s and Gibbard–Satterthwaite impossibility theorems it became clear that our desire to justify an electoral procedure is doomed to failure. At the same time a lot of scholars continued exploring different properties of existing voting rules and constructing the new ones. Contemporary research in this area explore two main properties of aggregation procedures — their degree of manipulability and computational complexity of manipulation. Quantitative evaluations of these properties tend to be main criteria of voting procedure selection. But last decades it turned out that another threat for theory of voting is incompatibilities and unexpected outcomes of different kind, usually called paradoxes. This article provides complete systematization of voting paradoxes known for today. We also presented an attempt to formulate a complete proof of the (in)stability of seven most common used voting rules to paradoxes of any type, which had not been undertaken before. Our results show that different voting procedures are qualitatively different in the sense of vulnerability to voting paradoxes which makes reasonable to propose additional criteria of voting procedure selection and opens the gate for further quantitative research. |
| Keywords: | Social choice, elections, voting behavior, paradoxes, voting procedures |
| JEL: | D7 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:70/ps/2019&r=all |
| By: | Laura Barros (University of Goettingen / Germany); Manuel Santos Silva (University of Goettingen / Germany) |
| Abstract: | After more than one decade of sustained economic growth, accompanied by falling poverty and inequality, Brazil has been hit by an economic recession starting in 2014. This paper investigates the consequences of this labor market shock for the victory of far-right Jair Bolsonaro in the 2018 presidential election. Using a shiftshare approach and exploring the differential effects of the recession by gender and race, we show that heterogeneity in exposure to the labor demand shock by the different groups is a key factor explaining the victory of Bolsonaro. Our results show that male-specific labor market shocks increase support for Bolsonaro, while female-specific shocks have the opposite effect. Interestingly, we do not find any effect by race. We hypothesize that, once facing economic insecurities, men feel more compelled to vote for a figure that exacerbates masculine stereotypes, as a way of compensating for the loss in economic status. Women, on the other hand, when confronted with economic shocks and the prospect of Bolsonaro’s election, respond by rejecting his political agenda in favor of a more pro-social platform. |
| Keywords: | economic shocks, populism, gender, voter participation |
| JEL: | D72 J16 J23 P16 R23 |
| Date: | 2019–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:got:iaidps:242&r=all |