nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2020‒06‒29
fourteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Electoral Turnout During States of Emergency and Effects on Incumbent Vote Share By Marco Frank; David Stadelmann; Benno Torgler
  2. Corruption and Extremism By Giommoni, Tommaso; Morelli, Massimo; Nicolò, Antonio
  3. Gender voting gap in the dawn of urbanization: evidence from a quasi-experiment with Greek special elections By Efthyvoulou, Georgios; Kammas, Pantelis; Sarandides, Vassilis
  4. Fiscal Rules as Bargaining Chips By Piguillem, Facundo; Riboni, Alessandro
  5. Voting or abstaining in "managed" elections? A field experiment in Bangladesh By Ahmed, Firoz; Hodler, Roland; Islam, Asadul
  6. Divided They Fall. Fragmented Parliaments and Government Stability By Carozzi, Felipe; Cipullo, Davide; Repetto, Luca
  7. A problem shared is a problem halved? Risky tax avoidance decisions and intra-group payoff conflict By Matthaei, Eva Kristina; Kiesewetter, Dirk
  8. Endogenous Monitoring through Gossiping in an Infinitely Repeated Prisoner’s Dilemma Game: Experimental Evidence By Kamei, Kenju; Nesterov, Artem
  9. Does equity induce inefficiency? An experiment on coordination By Mamadou Gueye; Nicolas Quérou; Raphaël Soubeyran
  10. A Political Model of Trust By Agranov, Marina; Eilat, Ran; Sonin, Konstantin
  11. Institutions, Opportunism and Prosocial Behavior: Some Experimental Evidence By Cabrales, Antonio; Clots-Figueras, Irma; Hernán-González, Roberto; Kujal, Praveen
  12. Transportation Technology, Individual Mobility and Social Mobilisation By Eric Melander
  13. The Seeds of Ideology: Historical Immigration and Political Preferences in the United States By Giuliano, Paola; Tabellini, Marco
  14. A Dynamic Theory of Secessionist vs Centrist Conflict By Esteban, Joan; Flamand, Sabine; Morelli, Massimo; Rohner, Dominic

  1. By: Marco Frank; David Stadelmann; Benno Torgler
    Abstract: In March 2020, the second ballot of local elections in the German state of Bavaria was held under an official state of emergency due to the Covid-19 pandemic. Bavarian mayors are elected by majority rule in two-round (runoff) elections. Between the first and second ballot of the election, the state government announced a state of emergency with drastic measures to fight the spread of Covid-19, including a shutdown of public life and restrictions to individual mobility. We employ a difference-in-difference setting to contrast turnout of the first and second ballot in 2020 with the first and second ballots from previous elections. The state of emergency led to an increase in turnout of 10 percentage points. This increase in turnout is robust and there is no relevant heterogeneity of the increase across municipalities. We argue that voting is an act of identifying with the collectivity of society which seemed to increase under adverse circumstances. In addition, the emergency induced higher turnout from the difference-in-difference setting is employed as an instrument to analyze the effect of turnout on the vote share of incumbents. Controlling for party affiliations and other factors, the results indicate that incumbents tend to profit marginally from higher turnout.
    Keywords: Covid-19; turnout; mayoral elections; voting in crises
    JEL: D72
    Date: 2020–06
  2. By: Giommoni, Tommaso; Morelli, Massimo; Nicolò, Antonio
    Abstract: When should we expect an opposition group to select an extremist leader or representative? This paper shows the important role of corruption for this choice. Moreover, we show an important asymmetry in the role of corruption, in that the effect on extremism exists only within the opposition group. When the elite has greater ability to use corruption to obtain a better bargaining outcome from the opposition group leader (political corruption), then the equilibrium selection of group leader is more likely to be extreme. On the other hand, the perception of an existing rent extraction by the elite in power may determine the opposite effect within the majority group. We provide strong evidence for these novel predictions using the random audits data in Brazil as exogenous corruption signals, verifying that only within the opposition (to state-level incumbents) the signals determined an extremism drift in voting. Finally, we extend the analysis to extremism and conflict risk in divided countries.
    Keywords: agency; Bargaining; Corruption; delegation; extremism
    JEL: D72 D73
    Date: 2020–04
  3. By: Efthyvoulou, Georgios; Kammas, Pantelis; Sarandides, Vassilis
    Abstract: The electoral law of 31 May 1952 extended the voting rights to all adult women in Greece. This paper examines the impact of women’s enfranchisement on party vote shares by employing a unique dataset of 385 communities located in seven prefectures in Greece where by-elections took place in 1953 and 1954 (for strictly exogenous reasons). To estimate causal effects, we exploit the observed heterogeneity in the proportion of women in the electorate across communities as the identifying source of variation, and employ a difference-in-differences design that holds unobserved local characteristics fixed. Our results provide strong evidence in favour of the “traditional gender voting gap” (women voting more conservatively compared to men) in the urban prefecture of Thessaloniki, and no evidence of gender voting differences in the remaining (six) predominantly rural prefectures of our sample. Our results also reveal that the existence of a gender voting gap is highly conditional upon the proportion of economically inactive women; that is, women tend to vote for right parties when they are outside of the labour force. Interestingly, when we account for this conditionality, a suffrage-induced pro-right shift can also be observed in communities outside Thessaloniki. Building on the economic bargaining models of the family, we argue that, in an economic environment characterized by limited demand for female labour force participation, women support more vigorously the sanctity and the strength of family values and tend to vote more conservatively compared to men.
    Keywords: women's suffrage; political preferences; women's labour market participation
    JEL: D72
    Date: 2020–03–01
  4. By: Piguillem, Facundo; Riboni, Alessandro
    Abstract: Most fiscal rules can be overridden by consensus. We show that this does not make them ineffectual. Since fiscal rules determine the outside option in case of disagreement, the opposition uses them as ``bargaining chips" to obtain spending concessions. We show that under some conditions this political bargain mitigates the debt accumulation problem. We analyze various rules and find that when political polarization is high, harsh fiscal rules (e.g., government shutdown) maximize the opposition's bargaining power and leads to lower debt accumulation. When polarization is low, less strict fiscal limits (e.g, balanced-budget rule) are preferable. Moreover, we find that the optimal fiscal rules could arise in equilibrium by negotiation. Finally, by insuring against power fluctuations, negotiable rules yield higher welfare than strict ones.
    Keywords: fiscal rules; Government Debt; Government shutdown=; legislative bargaining; Political Polarization
    JEL: D72 H2 H6
    Date: 2020–04
  5. By: Ahmed, Firoz; Hodler, Roland; Islam, Asadul
    Abstract: Many governments in weak democracies countries "manage" the electoral process to make their defeat very unlikely. We aim to understand why citizens decide to vote or abstain in managed elections. We focus on the 2018 general election in Bangladesh and randomize the salience of the citizens' views (i) that election outcomes matter for policy outcomes and (ii) that high voting participation increases the winning party's legitimacy. These treatments increase voting participation in government strongholds and decrease participation in opposition strongholds. The legitimacy treatment has stronger effects. These results have important implications for get-out-the-vote and information campaigns in weak democracies.
    Keywords: Bangladesh; Electoral authoritarianism; field experiment; managed/authoritarian elections; voting behavior
    JEL: C93 D72
    Date: 2020–04
  6. By: Carozzi, Felipe; Cipullo, Davide; Repetto, Luca
    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: Alignment effect; Bargaining; fragmentation; Government stability; No-confidence votes
    JEL: H1 H7 R50
    Date: 2020–04
  7. By: Matthaei, Eva Kristina; Kiesewetter, Dirk
    Abstract: This paper investigates the dynamics of group decisions regarding risky tax avoidance strategies using a laboratory experiment. To identify the causes of risk taking by groups, we compare individual to group decisions in three scenarios. The first scenario allocates payoffs from group decisions equally to all members of a group. The second and third scenario introduce intra-group payoff conflict as a new influential factor in group dynamics. Hereby, we separate intra-group payoff conflicts in the distribution of costs and profits. This manipulation allows us to disentangle group discussion effects resulting from the competing theories of polarization and diversification of opinions. Our overall findings support a predominant diversification of opinions effect. When group members share all payoffs equally, this effect overcomes polarization in 100% of the cases where outstanding individuals are risk averse, while group polarization appears to be more likely towards outstanding risk loving subjects. Intra-group payoff conflict shifts these likelihoods, supporting the importance of rational arguments in group polarization. Consequently, our experimental results support a strong increase in the level of average tax avoidance following group decisions in case of all or negative outcomes being shared equally by group members. Intra-group payoff in the distribution of costs, however, removes this difference and shifts, both individual and group preferences, towards safety.
    Keywords: group,tax avoidance,risk,intra-group payoff conflict,polarization,diversification of opinions
    Date: 2020
  8. By: Kamei, Kenju; Nesterov, Artem
    Abstract: Exogenously given reputational information is known to improve cooperation. This paper experimentally studies how people create such information through reporting of partner’s action choices, and whether the endogenous monitoring helps sustain cooperation, in an indefinitely repeated prisoner’s dilemma game. The experiment results show that most subjects report their opponents’ action choices, thereby successfully cooperating with each other, when reporting does not involve a cost. However, subjects are strongly discouraged from reporting when doing so is costly. As a result, they fail to achieve strong cooperation norms when the reported information is privately conveyed only to their next-round interaction partner. Costly reporting occurs only occasionally, even when there is a public record whereby all future partners can check the reported information. However, groups can then foster cooperation norms aided by the public record, because reported information gets gradually accumulated and becomes more informative over time. These findings suggest that the efficacy of endogenous monitoring depends on the quality of platforms that store reported information.
    Keywords: experiment, cooperation, prisoner’s dilemma game, reputation, reporting, infinitely repeated game.
    JEL: C73 C92 D70 H41
    Date: 2020–05–23
  9. By: Mamadou Gueye (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier, Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier); Nicolas Quérou (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier, CNRS - Centre National de la Recherche Scientifique); Raphaël Soubeyran (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)
    Abstract: In this paper, we use a laboratory experiment to analyze the relationship between equity and coordination success in a game with Pareto ranked equilibria. Equity is decreased by increasing the coordination payoffs of some subjects while the coordination payoffs of others remain unchanged. Theoretically, in this setting, difference aversion may lead to a positive relationship between equity and coordination success, while social welfare motivations may lead to a negative relationship. Using a within-subject experimental design, we find that less equity unambiguously leads to a higher level of coordination success. Moreover, this result holds even for subjects whose payoffs remain unchanged. Our results suggest that social welfare motivations drives the negative relationship between equity and coordination success found in this experiment. Moreover, our data suggest that the order of treatment matters. Groups facing first the treatment with high inequality in coordination payoffs, then the treatment with low inequality in coordination payoffs, reach the Pareto dominant equilibrium more often in both treatments compared to groups playing first the treatment with low inequality in coordination payoffs, then the treatment with high inequality in coordination payoffs.
    Keywords: equity, effciency,difference aversion,social welfare motivation,coordination game
    Date: 2020–06–05
  10. By: Agranov, Marina; Eilat, Ran; Sonin, Konstantin
    Abstract: We analyze a simple model of political competition, in which the uninformed median voter chooses whether to follow or ignore the advice of the informed elites. In equilibrium, information transmission is possible only if voters trust the elites' endorsement of potentially biased candidates. When inequality is high, the elites' informational advantage is minimized by the voters' distrust. When inequality reaches a certain threshold, the trust, and thus the information transmission, breaks down completely. Finally, the size of the elite forming in equilibrium depends on the amount of trust they are able to maintain.
    Keywords: cheap talk; inequality; information club; political economy; Trust
    JEL: D72 D83
    Date: 2020–04
  11. By: Cabrales, Antonio (University College London); Clots-Figueras, Irma (University of Kent); Hernán-González, Roberto (Burgundy School of Business); Kujal, Praveen (Middlesex University Business School, London)
    Abstract: Formal or informal institutions have long been adopted by societies to protect against opportunistic behavior. However, we know very little about how these institutions are chosen and their impact on behavior. We experimentally investigate the demand for different levels of institutions that provide low to high levels of insurance and its subsequent impact on prosocial behavior. We conduct a large-scale online experiment where we add the possibility of purchasing insurance to safeguard against low reciprocity to the standard trust game. We compare two different mechanisms, the private (purchase) and the social (voting) choice of institutions. Whether voted or purchased, we find that there is demand for institutions in low trustworthiness groups, while high trustworthiness groups always demand lower levels of institutions. Lower levels of institutions are demanded when those who can benefit from opportunistic behavior, i.e. low trustworthiness individuals, can also vote for them. Importantly, the presence of insurance crowds out civic spirit even when subjects can choose the no insurance option: trustworthiness when formal institutions are available is lower than in their absence.
    Keywords: institutions, trust, trustworthiness, voting, insurance
    JEL: C92 D02 D64
    Date: 2020–05
  12. By: Eric Melander (University of Namur and CAGE)
    Abstract: How do reductions in interaction costs shape the diffusion of social movements? In this paper, I use a natural experiment from Swedish history to answer this question. During the thirty-year period 1881-1910, Swedish society underwent two transformative developments: the large-scale roll-out of a national railway network and the nascence of grassroots social movements which came to dominate economic, social and political spheres well into the twentieth century. Using exogenous variation in railway access arising from initial plans for the network, I show that well-connected municipalities were more likely to host a local movement and subsequently saw more rapid membership growth and a greater number of distinct organisations. The mobility of individuals is key: results are driven by passenger arrivals into connected municipalities, not freight arrivals. I implement a market access framework to show that, by reducing least-cost distances between municipalities, railways intensified the influence exerted by neighbouring concentrations of membership, thereby enabling social movement spread.
    Keywords: social movements, railways, collective action, interaction costs, market access JEL Classification: D71, D83, N33, N73, O18, R40, Z13
    Date: 2020
  13. By: Giuliano, Paola (University of California, Los Angeles); Tabellini, Marco (Massachusetts Institute of Technology)
    Abstract: We test the relationship between historical immigration to the United States and political ideology today. We hypothesize that European immigrants brought with them their preferences for the welfare state, and that this had a long-lasting effect on the political ideology of US born individuals. Our analysis proceeds in three steps. First, we document that the historical presence of European immigrants is associated with a more liberal political ideology and with stronger preferences for redistribution among US born individuals today. Next, we show that this correlation is not driven by the characteristics of the counties where immigrants settled or other specific, socioeconomic immigrants' traits. Finally, we conjecture and provide evidence that immigrants brought with them their preferences for the welfare state from their countries of origin. Consistent with the hypothesis that immigration left its footprint on American ideology via cultural transmission from immigrants to natives, we show that our results are stronger when inter-group contact between natives and immigrants, measured with either intermarriage or residential integration, was higher. Our findings also indicate that immigrants influenced American political ideology during one of the largest episodes of redistribution in US history — the New Deal — and that such effects persisted after the initial shock.
    Keywords: immigration, culture, political ideology, preferences for redistribution
    JEL: D64 D72 H2 J15 N32 Z1
    Date: 2020–05
  14. By: Esteban, Joan; Flamand, Sabine; Morelli, Massimo; Rohner, Dominic
    Abstract: This paper proposes an integrated dynamic theory of bargaining and conflict between ethnic groups, delivering novel predictions on secessionist versus centrist conflict. Ethnic identities, inequality and intertemporal preferences are predicted to impact the risk of secessionist conflict and the risk of centrist conflict in different directions. Beside obtaining a full characterization of equilibrium for every set of conditions, we also show empirical evidence that cultural similarity reduces the scope for secessionist conflict (compared to centrist conflict); that small ethnic groups stick more often to peaceful union; that higher patience and higher group inequality fuels secessionism.
    Keywords: conflict; Patience; Secessions; Surplus Sharing
    JEL: C7 D74
    Date: 2020–04

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