nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2020‒04‒13
eleven papers chosen by
Stan C. Weeber, McNeese State University

  1. Divided They Fall: Fragmented Parliaments and Government Stability By Repetto, Luca; Cipullo, Davide; Carozzi, Felipe
  2. Terrorism, Political Opinions, and Election Outcomes: Evidence from Europe By Peri, Giovanni; Rees, Daniel I.; Smith, Brock
  3. Political Budget Cycles: Evidence from Swiss Cantons By Baldi, Guido; Forster, Stephan
  4. Lobbying expenditures and campaign contributions by the pharmaceutical and health-product industry in the United States, 1999- 2018 By Wouters, Olivier J.
  5. Unions, Tripartite Competition and Innovation By Bryson, Alex; Dale-Olsen, Harald
  6. Entropy-Norm space for geometric selection of strict Nash equilibria in n-person games By A. B. Leoneti; G. A. Prataviera
  7. Collective Intelligence: Crowd Wisdom versus Herding By Andreas Engert
  8. On some k-scoring rules for committee elections: agreement and Condorcet Principle By Mostapha Diss; Eric Kamwa; Abdelmonaim Tlidi
  9. Factors of Leadership Attitude Enhancing Interregional Collaboration. Dynamic Interregional Strategic Partnerships’ Leadership Impact on Motivation and Commitment By Fatime Barbara Hegyi; Laszlo Borbely; Gabor Bekesi
  10. Bowling with Trump: Economic Anxiety, Racial Identification, and Well-Being in the 2016 Presidential Election By Fabian, Mark; Breunig, Robert; De Neve, Jan-Emmanuel
  11. Norm Compliance in an Uncertain World By Toke Fosgaard; Lars Gårn Hansen; Erik Wengström

  1. By: Repetto, Luca (Department of Economics); Cipullo, Davide (Department of Economics); Carozzi, Felipe (Department of Geography and Environment)
    Abstract: This paper studies how political fragmentation affects government stability. We show that each additional party with representation in Parliament increases the probability that the incumbent government is unseated by 4 percentage points. Governments with more resources at their disposal for bargaining are less likely to be replaced. When they are, new government leaders are younger and better educated, suggesting instability may induce positive selection. We interpret our results in light of a bargaining model of coalition formation featuring government instability. Our findings indicate that the rising fragmentation in parliaments worldwide may have a substantial impact on stability and political selection.
    Keywords: Government Stability; Fragmentation; No-confidence votes; Bargaining; Alignment effect
    JEL: H10 H70 R50
    Date: 2020–01–01
  2. By: Peri, Giovanni (University of California, Davis); Rees, Daniel I. (University of Colorado Denver); Smith, Brock (Montana State University)
    Abstract: There is surprisingly little evidence on how terror attacks impact elections. With only a few exceptions, previous studies in this literature have focused on a particular country or attack, limiting their generalizability. Ours is the first comprehensive, multi-country examination of the effects of terror attacks on political opinions and election outcomes. The results provide little evidence that terror attacks are systematically related to Europeans' attitudes towards immigrants and how much trust they have in government. International terror attacks are, however, associated with an increase in the vote share received by nationalistic parties in Europe. These results are relevant to the ongoing debate among academics over the effectiveness of terror attacks.
    Keywords: terrorism, elections, nationalism, terror attack
    JEL: D72 D74
    Date: 2020–03
  3. By: Baldi, Guido; Forster, Stephan
    Abstract: Models of political budget cycles assume that politicians use fiscal policy to increase their chances of re-election. However, empirical results for advanced economies provide ambiguous support for the existence of such electoral cycles. Also, studies focusing on the regional or local level of advanced economies have found a variety of different results. In this paper, we use data at the sub-federal level of Switzerland from 1978 through 2015 to test for the presence of political budget cycles. Swiss regions called cantons are highly autonomous with regard to budgetary policy and have established direct democratic systems with frequent referendums that often affect budgetary issues. In most cantons, there are fiscal policy rules that restrict the budgetary leeway of governments. Against the backdrop of public discussions in several European countries on adopting more direct democratic elements, the Swiss experience on political budget cycles provides an interesting case study. Overall, the system of government is designed to foster consensus seeking and gradual adjustment. These features should make the short-run opportunistic or partisan use of fiscal policy less likely in Swiss cantons. Rather surprisingly, however, we find at least some evidence for an electoral cycle in government spending. For government revenue or the overall budget, our empirical results do not point to an electoral cycle.
    Keywords: Political budget cycle, fiscal policy, direct democracy
    JEL: D72 E62 H62
    Date: 2020–04
  4. By: Wouters, Olivier J.
    Abstract: Importance: Government efforts to lower drug costs and other legislative and regulatory initiatives may be counteracted by campaign donors and lobbyists in the pharmaceutical and health product industry. Objective: To review how much money the pharmaceutical and health product industry spent on campaign contributions and lobbying in the US from 1999 to 2018 at the federal and state levels. Design and Setting: Analysis of federal-level and state-level data obtained from the Center for Responsive Politics and the National Institute on Money in Politics, respectively. These nonprofit, nonpartisan organizations track federal and state campaign contributions and lobbying expenditures by individuals and groups. Exposures: Lobbying expenditures and contributions to political campaigns. Main Outcomes and Measures: Total spending, inflation adjusted to 2018 dollars using the US Consumer Price Index, on lobbying and campaign contributions by year, source, and state. Results: From 1999 to 2018, the pharmaceutical and health product industry recorded $4.7 billion- A n average of $233 million per year-in lobbying expenditures at the federal level, more than any other industry. Of the spending, the trade group Pharmaceutical Research and Manufacturers of America accounted for $422 million (9.0%), and the other 19 top companies and organizations in this industry accounted for $2.2 billion (46.8%). The industry spent $414 million on contributions to candidates in presidential and congressional elections, national party committees, and outside spending groups. Of this amount, $22 million went to presidential candidates and $214 million went to congressional candidates. Of the 20 senators and 20 representatives who received the most contributions, 39 belonged to committees with jurisdiction over health-related legislative matters, 24 of them in senior positions. The industry contributed $877 million to state candidates and committees, of which $399 million (45.5%) went to recipients in California and $287 million (32.7%) went to recipients in 9 other states. In years in which key state referenda on reforms in drug pricing and regulation were being voted on, there were large spikes in contributions to groups that opposed or supported the reforms. Conclusions and Relevance: From 1999 to 2018, the pharmaceutical and health product industry spent large sums of money on lobbying and campaign contributions to influence legislative and election outcomes. These findings can inform discussions about how to temper the influence of industry on US health policy.
    JEL: R14 J01
    Date: 2020–03–03
  5. By: Bryson, Alex (University College London); Dale-Olsen, Harald (Institute for Social Research, Oslo)
    Abstract: We present theoretical and empirical evidence challenging results from early studies that found unions were detrimental to workplace innovation. Under our theoretical model, which extends the Cournot duopoly innovation model, local union wage bargaining is more conducive to innovation - particularly product innovation - than competitive pay setting. We test the theory with workplace data for Britain and Norway. Results are consistent with the theory: local union bargaining is positively associated with product innovations in both countries. In Norway, local union bargaining is also positively associated with process innovation.
    Keywords: product innovation, process innovation, trade unions, collective bargaining
    JEL: J28 J51 J81 L23
    Date: 2020–02
  6. By: A. B. Leoneti; G. A. Prataviera
    Abstract: Motivated by empirical evidence that individuals within group decision making simultaneously aspire to maximize utility and avoid inequality we propose a criterion based on the entropy-norm pair for geometric selection of strict Nash equilibria in n-person games. For this, we introduce a mapping of an n-person set of Nash equilibrium utilities in an Entropy-Norm space. We suggest that the most suitable group choice is the equilibrium closest to the largest entropy-norm pair of a rescaled Entropy-Norm space. Successive application of this criterion permits an ordering of the possible Nash equilibria in an n-person game accounting simultaneously equality and utility of players payoffs. Limitations of this approach for certain exceptional cases are discussed. In addition, the criterion proposed is applied and compared with the results of a group decision making experiment.
    Date: 2020–03
  7. By: Andreas Engert
    Abstract: The chapter provides an introduction to the social science of ‘collective intelligence’, the aggregation of individual judgments for purposes of collective decision making. It starts from the basic logic of the Condorcet jury theorem and summarizes the main determinants of the accuracy of collective cognition. The recent research has focused on developing and refining formal aggregation methods beyond majority voting. The chapter presents the main findings on the two general approaches, surveying and prediction markets. It then contrasts these techniques with informal deliberation as a basic and prevalent aggregation mechanism. One conclusion is that while deliberation is prone to herding and can distort collective judgment, it is also more versatile and robust than formal mechanisms.
    JEL: K0 K41 M10
    Date: 2020–04
  8. 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); Abdelmonaim Tlidi (ENSA Marrakech - École nationale des sciences appliquées de Marrakech)
    Abstract: Given a collection of individual preferences on a set of candidates and a desired number of winners, a multi-winner voting rule outputs groups of winners, which we call committees. In this paper, we consider five multi-winner voting rules widely studied in the literature of social choice theory: the k-Plurality rule, the k-Borda rule, the k-Negative Plurality rule, the Bloc rule, and the Chamberlin-Courant rule. The objective of this paper is to provide a comparison of these multi-winner voting rules according to many principles by taking into account a probabilistic approach using the well-known Impartial Anonymous Culture (IAC) assumption. We first evaluate the probability that each pair of the considered voting rules selects the same unique committee in order to identify which multi-winner rules are the most likely to agree for a given number of candidates and a fixed target size of the committee. In this matter, our results show that the Chamberlin-Courant rule and the k-Plurality rule on one side, and the k-Borda rule and the Bloc rule on the other side, are the pairs of rules that most agree in comparison to other pairs. Furthermore, we evaluate the probability of every multi-winner voting rule selecting the Condorcet committee à la Gehrlein when it exists. The Condorcet committee à la Gehrlein is a fixed-size committee such that every member defeats every non-member in pairwise comparisons. In addition, we compare the considered multi-winner voting rules according to their ability (susceptibility) to select a committee containing the Condorcet winner (loser) when one exists. Here, our results tell us that in general, the k-Borda rule has the highest performance amongst all the considered voting rules. Finally, we highlight that this paper is one of the very rare contributions in the literature giving exact results under the Impartial Anonymous Culture (IAC) condition for the case of four candidates.
    Keywords: Scoring rules,Chamberlin-Courant,Borda,Condorcet,Voting,Committee
    Date: 2020
  9. By: Fatime Barbara Hegyi (European Commission - JRC); Laszlo Borbely (CVI Canada); Gabor Bekesi (Budapest Business School)
    Abstract: Interregional collaborative actions led by visibly focused and determined lead actors with a well-defined governance structure are more likely to be successful in attaining their objectives. Thus, this research proposes to examine the role of good governance and leadership contribute to the overall sustainability and viability of interregional initiatives. Accordingly, the paper explores how the leadership of the cross-border partnerships effect the motivation and commitment within the partnership by comparing attitudes of leaders and participants to explore the potential for more effective operation. The assessment framework has been developed with the aim to assist leading stakeholders of interregional collaborative actions to ensure efficiency, sustainability and success of their projects in achieving their objectives. The proposed assessment framework highlights areas of leadership where adjustments or changes are needed in order to contribute to the viability of cross-border collaborative efforts, examining the motivational and attitudinal indicators. Regularly assessing the impact of leadership on the motivation and commitment of actors across participating entities contributes to the efficiency and sustainability of collaborative actions by signalling issues of motivation and commitment. Through such assessment, specific areas can be highlighted, where there is lack of motivation and commitment towards the partnership, the leadership, the team and the work itself. Through regular re-assessments, effects of leadership practices or previous decisions can be measured. The assessment framework has been developed in a way that it can be applied to any collaborative actions that have a well-defined governance structure with designated leadership.
    Keywords: leadership impact, leadership assessment, motivation, commitment, smart specialization, interregional collaboration, governance
    Date: 2020–03
  10. By: Fabian, Mark (Brookings Institution); Breunig, Robert (Australian National University); De Neve, Jan-Emmanuel (University of Oxford)
    Abstract: We use well-being data from the Gallup Daily Poll and a measure of racial animus derived from Google search data to explain why racial identification became politically salient in the 2016 Presidential Election. We find that the oft-observed positive relationship between racial animus and Trump's vote share is eliminated by introducing an interaction between racial animus and a measure of the basic psychological need for relatedness. We also find that rates of worry have a strong and significant positive association with Trump's vote share, but this is offset by high levels of relatedness. Together, these two results imply that racial voting behavior in 2016 was driven by a desire for in-group affiliation as a way of buffering against economic and cultural anxiety. Such behavior is well established in laboratory studies in self-determination theory and worldview defense theory. We find no effect on Trump's performance from social capital or exposure to trade shocks. This suggests that the economic roots of Trump's success may be overstated and that the need for relatedness is a key underlying driver of contemporary political trends in the US.
    Keywords: well-being, voting, racialized economics, nativism, Trump
    JEL: D72 F1 I0 I3 P16
    Date: 2020–02
  11. By: Toke Fosgaard (Department of Food and Resource Economics, University of Copenhagen); Lars Gårn Hansen (Department of Food and Resource Economics, University of Copenhagen); Erik Wengström (Department of Economics, Lund University; Department of Finance and Economics, Hanken School of Economics, Helsinki)
    Abstract: In many situations, social norms govern behavior. While the existence of a norm may be clear to someone entering the situation, it is often less clear precisely what behavior is required in order to comply with the norm. We investigate how people react to uncertainty about the prevailing norm using a modified version of the dictator game. Since the behavioral effects of social norms are tightly linked to the degree of anonymity in a situation, we also vary the extent to which subjects’ behavior is observable. We find that when behavior is anonymous, uncertainty about which norm guides partners reduces aggregate norm compliance. However, when others can observe behavior, introducing a small degree of norm uncertainty increases aggregate norm compliance. This implies that norm uncertainty may actually facilitate interaction as long as behavior is observable and uncertainty is sufficiently small. We also document that reactions to norm uncertainty are heterogeneous with one group of people reacting to norm uncertainty by increasing compliance (over-compliers), while another group reacts by reducing compliance (under-compliers). The main effect of increased observability operates through the intensive margin of the under-compliers; they reduce their negative reaction to norm uncertainty when their actions become more visible.
    Keywords: Social norms, Uncertainty, Audience
    JEL: C92 D9
    Date: 2020–03

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