nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2020‒06‒15
thirteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Information Disclosure in Elections with Sequential Costly Participation By Dmitriy Vorobyev
  2. Electoral Intermediaries By Gallego, Jorge; Li, Christopher; Wantchekon, Leonard
  3. Democratisation under Diversity: Theory and Evidence from Indonesian Communities By Anirban Mitra; Sarmistha Pal
  4. On the political economy of income taxation By Berliant, Marcus; Gouveia, Miguel
  5. "No Man is an Island": An Empirical Study on Team Formation and Performance By Alessandra Allocca
  6. When Coercive Economies Fail: The Political Economy of the US South After the Boll Weevil By James J. Feigenbaum; Soumyajit Mazumder; Cory B. Smith
  7. Funding Public Projects: A Case for the Nash Product Rule By Florian Brandl; Felix Brandt; Dominik Peters; Christian Stricker; Warut Suksompong
  8. Influential News and Policy-making By Vaccari, Federico
  9. Representative Democracy with or without Elections: An Economic Analysis By Miltos Makris; Theodore Palivos; Marios Zachariadis
  10. Local Social Interaction and Urban Equilibria By Emmanuelle Augeraud-Veron; Francisco Marhuenda; Pierre M. Picard
  11. The Relationship between In-Person Voting, Consolidated Polling Locations, and Absentee Voting on Covid-19: Evidence from the Wisconsin Primary By Chad D. Cotti; Bryan Engelhardt; Joshua Foster; Erik T. Nesson; Paul S. Niekamp
  12. The Climate Decade: Changing Attitudes on Three Continents By Carlsson, Fredrik; Kataria, Mitesh; Krupnick, Alan; Elina, Lampi; Åsa, Löfgren; Qin, Ping; Thomas, Sterner; Yang, Xiaojun
  13. Two field experiments on self-selection, collaboration intensity, and team performance By Fischer, Mira; Rilke, Rainer Michael; Yurtoglu, B. Burcin

  1. By: Dmitriy Vorobyev (Graduate School of Economics and Management, Ural Federal University, Yekaterinburg, Russia; CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences, Prague, Czech Republic)
    Abstract: Electoral legislation varies across countries and within countries over time, and across different types of elections in terms of how it allows publication of intermediate election results including turnout and candidates’ vote shares during an election day. Using a pivotal costly voting model of elections in which voters have privately observed preferences between two candidates and act sequentially, I study how different rules for disclosing information about the actions of early voters affect the actions of later voters, and how they ultimately impact voter and candidate welfare. Comparing three rules observed in real life elections (no disclosure, turnout disclosure and vote count disclosure), I find that vote count disclosure dominates the other two rules in terms of voter welfare. I further show that each of the rules can provide a candidate with either the greatest or the least chance to win, depending on the candidate’s ex-ante support.
    Keywords: voting, participation, information disclosure
    JEL: D71 D72 D83
    Date: 2020–05
  2. By: Gallego, Jorge; Li, Christopher; Wantchekon, Leonard
    Abstract: Democratic elections increasingly involve political intermediaries (e.g. grassroots organizations or political brokers). We develop a model of electoral competition in which candidates must decide between brokers (patronage) and grassroots organizations. Our model shows that patronage is more likely when public offices are relatively more “valuable” for brokers. Moreover, setups that constrain candidates from funding grassroots campaigns and weaken ties between politicians and citizens make patronage more likely. We show that patronage negatively affects citizens’ welfare, as winning brokers turned civil servants undermine the quality of governments. Finally, our model explores the role of policy deliberation in curbing patronage politics.
    Keywords: Patronage; Intermediaries; Clientelism; Elections
    JEL: D70 D72
    Date: 2020–05
  3. By: Anirban Mitra; Sarmistha Pal
    Abstract: We study the effect of ethnic diversity on local public spending following fiscal decentralisation in a setting where local institutions condition cooperative behaviour across ethnic groups. The theory we develop highlights the role of the local elite in lobbying for policies which favour them in a decentralised setting. The differences in preferences over public good allocations along with the salience of coordination costs across ethnic groups are relevant in determining the equilibrium lobbying behaviour. This results in ethnic diversity having a detrimental effect on local developmental spending which is aggravated by increased levels of coordination costs. We test these predictions using Indonesian community-level data. Utilising the 1997 and 2007 Indonesian Family Life Survey (IFLS) rounds, we are able to construct various measures of ethnic diversity. Also, we exploit an institutional feature of Indonesian communities - namely, the observance of traditional "Adat" laws to proxy coordination costs across ethnic groups. Overall, we find that ethnic diversity depresses local development spending post-decentralisation at the community level particularly where Adat laws are not followed, which is consistent with our theory.
    Keywords: Decentralisation; Lobbying; Local development; Political Economy
    JEL: D72 D74 H40
    Date: 2020–04
  4. By: Berliant, Marcus; Gouveia, Miguel
    Abstract: The literatures dealing with voting, optimal income taxation, implementation, and pure public goods are integrated here to address the problem of voting over income taxes and public goods. In contrast with previous articles, general nonlinear income taxes that affect the labor-leisure decisions of consumers who work and vote are allowed. Uncertainty plays an important role in that the government does not know the true realizations of the abilities of consumers drawn from a known distribution, but must meet the realization-dependent budget. Even though the space of alternatives is infinite dimensional, conditions on primitives are found to assure existence of a majority rule equilibrium when agents vote over both a public good and income taxes to finance it.
    Keywords: Voting; Income taxation; Public good
    JEL: D72 D82 H21 H41
    Date: 2020–05–31
  5. By: Alessandra Allocca
    Abstract: Many organizations rely on decentralized arrangements where employees choose their projects and teams. Most of the empirical literature on working collaborations instead focuses on teams that are exogenously formed. I develop a structural entry model with heterogeneous strategic interactions where agents decide whether to join a project. The decision depends on who else may potentially join the project, the project quality, as well as other individual and project characteristics. In turn, this decision affects the probability of project completion. I estimate the model using a novel dataset from an important scientific collaboration. I find that agents' decisions to select into projects highly depend on the pool of teammates and the size of the team whereas projects' quality is of lesser importance. Heterogeneity in agents' characteristics explains this selection, which needs to be accounted for to obtain unbiased estimates of teams' performance. With a counterfactual experiment, I show that moving from a decentralized to a centralized arrangement leads to fewer completed projects.
    Keywords: Teamwork, Entry Game, Innovation, Personnel Economics
    JEL: C57 C72 L2 M50 O32
    Date: 2020–05
  6. By: James J. Feigenbaum; Soumyajit Mazumder; Cory B. Smith
    Abstract: How do coercive societies respond to negative economic shocks? We explore this question in the early 20th-Century United States South. Since before the nation's founding, cotton cultivation formed the politics and institutions in the South, including the development of slavery, the lack of democratic institutions, and intergroup relations between whites and blacks. We leverage the natural experiment generated by the boll weevil infestation from 1892-1922, which disrupted cotton production in the region. Panel difference-in-differences results provide evidence that Southern society became less violent and repressive in response to this shock with fewer lynchings and less Confederate monument construction. Cross-sectional results leveraging spatial variation in the infestation and historical cotton specialization show that affected counties had less KKK activity, higher non-white voter registration, and were less likely to experience contentious politics in the form of protests during the 1960s. To assess mechanisms, we show that the reductions in coercion were responses to African American out-migration. Even in a context of antidemocratic institutions, ordinary people can retain political power through the ability to ``vote with their feet.''
    JEL: J15 K0 N3 N5
    Date: 2020–05
  7. By: Florian Brandl; Felix Brandt; Dominik Peters; Christian Stricker; Warut Suksompong
    Abstract: We study a mechanism design problem where a community of agents wishes to fund public projects via voluntary monetary contributions by the community members. This serves as a model for participatory budgeting without an exogenously available budget, as well as donor coordination when interpreting charities as public projects and donations as contributions. Our aim is to identify a mutually beneficial distribution of the individual contributions. In the preference aggregation problem that we study, agents report linear utility functions over projects together with the amount of their contributions, and the mechanism determines a socially optimal distribution of the money. We identify a specific mechanism---the Nash product rule---which picks the distribution that maximizes the product of the agents' utilities. This rule is Pareto efficient, and we prove that it satisfies attractive incentive properties: the Nash rule spends an agent's contribution only on projects the agent finds acceptable, and it provides strong participation incentives. We also discuss issues of strategyproofness and monotonicity.
    Date: 2020–05
  8. By: Vaccari, Federico
    Abstract: To counter misinformation, regulators can exercise control over the costs that media outlets incur for misreporting policy-relevant news, e.g. by imposing fines. This paper analyzes the welfare implications of those types of interventions that affect misreporting costs. I study a model of strategic communication between an informed media outlet and an uninformed voter, where the outlet can misreport information at a cost. The alternatives available to the voter are endogenously championed by two competing candidates before communication takes place. I find that there is no clear nexus between the voter's welfare and informational distortions: interventions that benefit the voter might be associated with more misreporting activity and persuasion; relatively low misreporting costs yield full revelation but minimize the voter's welfare because they induce large policy distortions. Interventions that increase misreporting costs never harm the voter, but lenient measures might be wasteful. Electoral incentives distort the process of regulation itself, resulting in sub-optimal interventions that are detrimental to the voter's welfare.
    Keywords: fake news, misreporting, media, policy-making, election, regulation
    JEL: D72 D82 D83 L51
    Date: 2020–05–16
  9. By: Miltos Makris; Theodore Palivos; Marios Zachariadis
    Abstract: We compare the quality of policies set by a representative in the face of complexity/uncertainty under an electoral system where the representative is chosen out of the set of politicians versus a system where the policy-setter is randomly selected from the “demos†, that is, the subset of citizens willing to serve as representatives if selected by lot. We do so by recognizing that the differences between the two systems affect the incentives of citizens to participate in the selection process in place. We find that for high enough returns from being the representative, drawing the decision-maker from the demos dominates elections because higher returns attract more able-for-the-job citizens while the probability of winning elections is decreasing in the number of politicians/candidates. Importantly, we also find that an increase in the complexity of policy issues makes it more likely that drawing the representative from the demos dominates elections since it reduces the probability of being selected under elections and thereby the incentives of more able-for-the-job citizens to become politicians. Calibrating our model we show that selection by lot is more likely to dominate elections in terms of the quality of policy decisions in countries with high income inequality as compared to those with low inequality.
    Keywords: Elections; sortition; political selection; policy decisions; imperfect information.
    JEL: D72 D82 H11
    Date: 2020–06
  10. By: Emmanuelle Augeraud-Veron (GREThA, UMR 5113, University of Bordeaux, France); Francisco Marhuenda (University Carlos III, UC3M, Madrid, Spain); Pierre M. Picard (CREA, Université du Luxembourg)
    Abstract: In this paper we investigate the effect of local interaction in a simple urban eco- nomics model. Agents interact with others if and only if their interaction benefit outweights their travel cost and therefore meet others only within finite geographic windows. We show that two or more cites may co-exist at the equilibrium provided that they are sufficiently distant. For any interaction surplus function, there exists a unique spatial equilibrium on not too large city supports. The population density within a city is determined by a second order advance-delay differential equation, whose solutions are fully characterized for linear interaction surplus functions. Nu- merical analyses show that more localized interactions yield flatter population den- sity and land rents over larger extents of the city support. They do not give support to the idea that multiple subcenters can be caused by small and finite geographic windows of interaction.
    Keywords: social interaction, cities, spatial equilibrium.
    JEL: R12
    Date: 2019
  11. By: Chad D. Cotti; Bryan Engelhardt; Joshua Foster; Erik T. Nesson; Paul S. Niekamp
    Abstract: On April 7, 2020, Wisconsin held a major election for state positions and presidential preferences for both major parties. News reports showed pictures of long lines of voters due to fewer polling locations and suggested that the election may further the spread of the SARS-CoV-2 virus. A contract-tracing analysis by the Wisconsin Department of Health identified 52 confirmed cases of COVID-19 to in-person voting, but no research has conducted a broader analysis of the extent to which in-person voting increased the number of COVID-19 cases. We use county level data on voting and COVID-19 tests to connect the election to the spread of the SARS-CoV-2 virus. We find a statistically and economically significant association between in-person voting and the spread of COVID-19 two to three weeks after the election. Furthermore, we find the consolidation of polling locations, and relatively fewer absentee votes, increased positive testing rates two to three weeks after the election. Our results offer estimates of the potential increased costs of in-person voting as well as potential benefits of absentee voting during a pandemic.
    JEL: D72 H75 I1 I18
    Date: 2020–05
  12. By: Carlsson, Fredrik (Department of Economics, School of Business, Economics and Law, Göteborg University); Kataria, Mitesh (Department of Economics, School of Business, Economics and Law, Göteborg University); Krupnick, Alan (Resources for the Future,); Elina, Lampi (Department of Economics, School of Business, Economics and Law, Göteborg University); Åsa, Löfgren (Department of Economics, School of Business, Economics and Law, Göteborg University); Qin, Ping (School of Applied Economics, Renmin University of China); Thomas, Sterner (Department of Economics, School of Business, Economics and Law, Göteborg University); Yang, Xiaojun (School of Public Policy and Administration, Xi'an Jiaotong University)
    Abstract: We examine how attitudes and willingness to pay (WTP) for climate policies have changed over the past decade in the United States, China, and Sweden. All three countries exhibit an increased willingness to pay for climate mitigation. Ten years ago, Sweden had a larger fraction of believers in anthropogenic climate change and a higher WTP for mitigation, but today the national averages are more similar. Although we find convergence in public support for climate policy across countries, there is considerable divergence in climate attitudes and preferences within countries, particularly the United States. Political polarization explains part of this divergence.
    Keywords: Climate change; willingness to pay; climate policy attitudes; political polarization; multi-country; China; United States; Sweden
    JEL: Q51 Q54
    Date: 2020–05
  13. By: Fischer, Mira; Rilke, Rainer Michael; Yurtoglu, B. Burcin
    Abstract: We analyze how the team formation process influences the ability composition and performance of teams, showing how self-selection and random assignment affect team performance for different tasks in two natural field experiments. We identify the collaboration intensity of the task as the key driver of the effect of self-selection on team performance. We find that when the task requires low collaborative efforts, the team performance of self-selected teams is significantly inferior to that of randomly assigned teams. When the task involves more collaborative efforts, self-selected teams tend to outperform randomly assigned teams. We observe assortative matching in self-selected teams, with subjects more likely to match with those of similar ability and the same gender.
    Keywords: Team Performance,Self-selection,Field Experiment,Education
    JEL: I21 M54 C93
    Date: 2020

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