nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2020‒07‒13
thirteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Interacting collective action problems in the commons By Nicolas Querou
  2. Designing Stable Elections: A Survey By Steven Heilman
  3. Moral Transgressions by Groups: What Drives Individual Voting Behavior? By Feess, Eberhard; Kerzenmacher, Florian; Muehlheusser, Gerd
  4. A Glimpse of Freedom: Allied Occupation and Political Resistance in East Germany By Luis Martinez; Jonas Jessen; Guo Xu
  5. Anomalies of Instant Runoff Voting By Stensholt, Eivind
  6. Internet and politics: evidence from U.K. local elections and local government policies By Gavazza, Alessandro; Nardotto, Mattia; Valletti, Tommaso
  7. The Virus of Fear: The Political Impact of Ebola in the U.S. By Campante, Filipe; Depetris-Chauvín, Emilio; Durante, Ruben
  8. Incentivizing public good provision through outsider transfers: experimental evidence on sharing rules and additionality requirements By Esther Blanco; Natalie Struwe; James M. Walker
  9. The Conservation Multiplier By Bård Harstad
  10. Gridlock, leverage, and policy bundling By Barton E. Lee
  11. On the Internal and External Stability of Coalitions and Application to Group Purchasing Organizations By Dongshuang Hou; Aymeric Lardon; Hao Sun
  12. Changing In-Group Boundaries: The Effect of Immigration on Race Relations in the US By Fouka, Vasiliki; Mazumder, Soumyajit; Tabellini, Marco
  13. Hierarchies and decision-making in groups: Experimental evidence By Donata, Bessey

  1. By: Nicolas Querou (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)
    Abstract: We consider a setting where agents are subject to two types of collective action problems, any group user's individual extraction inducing an externality on others in the same group (intra-group problem), while aggregate extraction in one group induces an externality on each agent in other groups (intergroup problem). One illustrative example of such a setting corresponds to a case where a common-pool resource is jointly extracted in local areas, which are managed by separate groups of individuals extracting the resource in their respective location. The interplay between both types of externality is shown to affect the results obtained in classical models of common-pool resources. We show how the fundamentals affect the individual strategies and welfare compared to the benchmark commons problems. Finally, different initiatives (local cooperation, inter-area agreements) are analyzed to assess whether they may alleviate the problems, and to understand the conditions under which they do so.
    Keywords: common-pool resource,collective action,externalities
    Date: 2020–06–05
  2. By: Steven Heilman
    Abstract: We survey the design of elections that are resilient to attempted interference by third parties. For example, suppose votes have been cast in an election between two candidates, and then each vote is randomly changed with a small probability, independently of the other votes. It is desirable to keep the outcome of the election the same, regardless of the changes to the votes. It is well known that the US electoral college system is about 5 times more likely to have a changed outcome due to vote corruption, when compared to a majority vote. In fact, Mossel, O'Donnell and Oleszkiewicz proved in 2005 that the majority voting method is most stable to this random vote corruption, among voting methods where each person has a small influence on the election. We discuss some recent progress on the analogous result for elections between more than two candidates. In this case, plurality should be most stable to corruption in votes. We also survey results on adversarial election manipulation (where an adversary can select particular votes to change, perhaps in a non-random way), and we briefly discuss ranked choice voting methods (where a vote is a ranked list of candidates).
    Date: 2020–06
  3. By: Feess, Eberhard (Victoria University of Wellington); Kerzenmacher, Florian (University of Innsbruck); Muehlheusser, Gerd (University of Hamburg)
    Abstract: We conduct an experiment where subjects are matched in groups of three and vote on a moral transgression. Analyzing different voting rules, the frequency of votes for the moral transgression increases with the number of votes required for it. This effect persists when considering pivotal votes only, which eliminates opportunities to save on own moral costs and to rely instead on sufficiently many votes for the transgression by other group members. A series of novel treatments allows us to identify guilt sharing and preferences for consensual voting as empirically relevant and independent drivers of voting behavior.
    Keywords: group decisions, unethical behavior, experiment, voting, diffusion of responsibility, guilt sharing, donations
    JEL: C92 D02 D63 D71
    Date: 2020–06
  4. By: Luis Martinez (University of Chicago); Jonas Jessen (the German Institute for Economic Research (DIW Berlin)); Guo Xu (University of California, Berkeley)
    Abstract: This paper studies costly political resistance in a non-democracy. When Nazi Germany surrendered in May 1945, 40% of the designated Soviet occupation zone was initially captured by the western Allied Expeditionary Force. This occupation was short-lived: Soviet forces took over after less than two months and installed an authoritarian regime in what became the German Democratic Republic (GDR). We exploit the idiosyncratic line of contact separating Allied and Soviet troops within the GDR to show that areas briefly under Allied occupation had higher incidence of protests during the only major episode of political unrest in the GDR before its demise in 1989 - the East German Uprising of 1953. These areas also exhibited lower regime support during the last free elections in 1946. We argue that even a “glimpse of freedom" can foster civilian opposition to dictatorship.
    Keywords: German Democratic Republic; East Germany,World War II, Dictatorship, Protests, Soviet Union, Line of Contact, Regression Discontinuity Design
    JEL: D72 D74 P26
    Date: 2020–04
  5. By: Stensholt, Eivind (Dept. of Business and Management Science, Norwegian School of Economics)
    Abstract: Struggles over the single-seat preferential election method IRV (Instant Runoff Voting) go on in public arenas and scientific journals, with focus on two “anomalies”. “Monotonicity failures” are preference distributions that allow a startling strategic voting called Pushover or its reverse. Analysis shows how a Pushover action works, and why it is hard to predict and exploit an opportunity. While not rare, monotonicity failures should be seen as a minor nuisance. “No-Show paradoxes” are alarms. The IRV tally eliminates a very clear Condorcet winner in a realistic, but somewhat unusual preference structure, too close to Duncan Black’s Single- Peak condition: Too many YXZ-ballots let Z win instead of a very clear Condorcet-winner X who is eliminated; this harms IRV’s legitimacy. Baldwin’s elimination rule when three candidates remain is a suggested remedy. Preference distributions with the same IRV-tally are grouped together and analyzed with “pictograms” as a tool. That allows a generalization of Black’s Single-Peak condition; real cases are close to “Perfect Pie-sharing”, which explains why Condorcet cycles are rare.
    Keywords: Instant Runoff Voting; Condorcet methods; Duncan Black’s Single-Peak condition; Baldwin’s elimination rule
    JEL: D72
    Date: 2020–06–23
  6. By: Gavazza, Alessandro; Nardotto, Mattia; Valletti, Tommaso
    Abstract: We empirically study the effects of broadband internet diffusion on local election outcomes and on local government policies using rich data from the U.K. Our analysis shows that the internet has displaced other media with greater news content (i.e. radio and newspapers), thereby decreasing voter turnout, most notably among less-educated and younger individuals. In turn, we find suggestive evidence that local government expenditures and taxes are lower in areas with greater broadband diffusion, particularly expenditures targeted at less-educated voters. Our findings are consistent with the idea that voters’ information plays a key role in determining electoral participation, government policies, and government size.
    Keywords: local elections; voter turnout; local government expenditure; media; internet
    JEL: D72 H72 H75 L82 L86 N44
    Date: 2019–10–01
  7. By: Campante, Filipe; Depetris-Chauvín, Emilio; Durante, Ruben
    Abstract: We study how fear can aï¬?ect the behavior of voters and politicians by looking at the Ebola scare that hit the U.S. a month before the 2014 midterm elections. Exploiting the timing and location of the four cases diagnosed in the U.S., we show that heightened concern about Ebola, as measured by online activity, led to a lower vote share for the Democrats in congressional and gubernatorial elections, as well as lower turnout, despite no evidence of a general anti-incumbent eï¬?ect (including on President Obama's approval ratings). We then show that politicians responded to the Ebola scare by mentioning the disease in connection with immigration, terrorism, and President Obama in newsletters, tweets and campaign ads. This response came only from Republicans, especially those facing competitive races, suggesting a strategic use of the issue in conjunction with topics perceived as favorable to them. Survey evidence suggests that voters responded with increasingly conservative attitudes on immigration but not on other ideologically-charged issues. Taken together, our ï¬ ndings indicate that emotional reactions associated with fear can have a strong electoral impact, that politicians perceive and act strategically in response to this, and that the process is mediated by issues that can be plausibly associated with the speciï¬ c fear-triggering factor.
    Keywords: Ebola; elections; Emotions; Fear; Immigration
    JEL: D72 D91
    Date: 2020–03
  8. By: Esther Blanco; Natalie Struwe; James M. Walker
    Abstract: This study presents experimental evidence on the effectiveness of alternative institutional arrangements designed to allow providers of public good services to be subsidized by non-providers. The decision setting is a repeated linear public good game with two groups, insiders and outsiders. Insiders make contributions to a public good that benefits both insiders and outsiders. Outsiders, unable to provide the public good, can send transfers to compensate insiders. The institutions under consideration are motivated primarily by payments for ecosystem services (PES), such as payments for climate protection. The decision settings, however, capture attributes of many forms of charitable giving. Results are resented from two studies. Study 1, based on a 2x2 design, considers two sharing rules for group payments and whether an additionality criterion is present or not. With the equal sharing rule, insiders receive an equal share of transfers. With the proportional rule, insiders receive a share of transfers proportional to their relative contributions in their group. When the additionality criterion is present, transfers are received contingent on insiders providing the public good at a level higher than in initial decision periods, where a transfer option is not present. Study 2 examines a setting where individual outsiders are able to target transfers to individual insiders, allowing outsiders to endogenously choose the specific distribution of transfers among the insiders. The sharing rules studied result in significant differences in cooperation levels. Both the proportional share and targeted-transfers rules lead to greater public good provision relative to the equal share rule. Contrary to its alleged relevance to PES programs, additionality does not lead to sustained increases in public good provision. On the other hand, additionality may improve the cost-effectiveness of transfer programs by precluding transfer payments when subsidies do not increase public good provision.
    Keywords: Public good, Institution, Externality, Laboratory Experiment
    JEL: D70 H41 C92
    Date: 2020
  9. By: Bård Harstad
    Abstract: Every government that controls an exhaustible resource must decide whether to exploit it or to conserve and thereby let the subsequent government decide whether to exploit or conserve. This paper develops a theory of this situation and shows when a small probability that some future government will exploit a resource leads to a domino effect with rapid exploitation. This effect leads to a multiplier that measures how a small change in parameters can have large effects. The multiplier is especially large if the government is powerful now but unlikely to be in power later. The multiplier also permits dramatic returns on lobby contributions contingent on exploitation -- or on compensations contingent on conservation -- when these offers are expected to continue. To best take advantage of the multiplier, I show how and when compensations should be offered to the president, the party in power, the general public, or to the lobby group.
    Keywords: dynamic games, exhaustible resources, deforestation, political economy, lobbying, conservation, PES, REDD+.
    JEL: D72 C73 Q57 O13
    Date: 2020
  10. By: Barton E. Lee (School of Economics, UNSW Sydney)
    Abstract: We consider a dynamic model of bargaining where alternatives to the status-quo arrive stochastically during the bargaining process, the proposer can bundle multiple alternatives into a single proposal, and a forward-looking voter elects the agendasetter. We show that the prevailing wisdom that policy bundling reduces gridlock — by facilitating compromise across different policy areas — is incomplete. Policy bundling can also increase gridlock: a player may veto or delay a bipartisan alternative, which is unanimously preferred to the status-quo, so that in the future they can bundle this same alternative with a divisive alternative that otherwise would not pass. Gridlock of this form is more likely to occur during periods of economic stability and suggests that traditional measures of legislator ideology will overstate polarization. From the voter’s perspective, we show that gridlock occurs at an inefficiently high frequency. This state of “excess gridlock” is driven by the voter being forward-looking and lacking commitment power to punish players that veto.
    Keywords: Gridlock, bargaining, policy bundling
    JEL: D72 D78
    Date: 2020–06
  11. By: Dongshuang Hou (Department of Applied Mathematics, Northwestern Polytechnical University, Xi'an, China); Aymeric Lardon (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint Etienne, France); Hao Sun (Department of Applied Mathematics, Northwestern Polytechnical University, Xi'an, China)
    Abstract: Two new notions of stability of coalitions, based on the idea of exclusion or integration of players depending on how they affect allocations, are introduced for cooperative transferable utility games. The first one, called internal stability, requires that no coalition member would find that her departure from the coalition would improve her allocation or those of all her partners. The second one, called external stability, requires that coalitions members do not wish to recruit a new partner willing to join the coalition, since her arrival would hurt some of them. As an application of these two notions, we study the stability of Group Purchasing Organizations using the Shapley value to allocate costs between buyers. Our main results suggest that, when all buyers are initially alone, while small buyers will form internally and externally stable Group Purchasing Organizations to benefit from the best price discount, big buyers will be mutually exclusive and may cooperate with only small buyers.
    Keywords: Internal and external stability, Group purchasing organization, Cost allocation, Shapley value
    JEL: C71 D61 D62
    Date: 2020
  12. By: Fouka, Vasiliki; Mazumder, Soumyajit; Tabellini, Marco
    Abstract: How do social group boundaries evolve? Does the appearance of a new out-group change the in-group's perceptions of other out-groups? We introduce a conceptual framework of context-dependent categorization, in which exposure to one minority leads to recategorization of other minorities when the former is perceived as more distant than the latter. We test this framework by studying how Mexican immigration to the US affected whites' attitudes and behaviors towards African Americans. We combine survey and crime data with a difference-in-differences design and an instrumental variables strategy. Consistent with the theory, Mexican immigration improves whites' attitudes towards blacks, increases support for pro-black government policies and lowers anti-black hate crimes, while simultaneously increasing prejudice against Hispanics. Immigration of groups perceived as less distant than blacks does not have similar effects. Our findings imply that changes in the size of one group can affect the entire web of inter-group relations in diverse societies.
    Keywords: Immigration; in-group--out-group relations; race
    Date: 2020–04
  13. By: Donata, Bessey
    Abstract: In this study, I investigate differences in decision-making outcomes for groups under different hierarchies using an experimental approach. Many decisions in firms, households, and other contexts are not taken by individuals, but by groups. In addition, most groups, especially in firms, are characterized by hierarchical organization structures. While research in management, sociology and psychology has been investigating the role of hierarchies for a long time, there is a lack of experimental economic research on the effect of various group structures or hierarchies on decision-making and its quality. I compare the choices of groups in Holt and Laury (2002) type lottery choices and in intellective tasks in five different group types: a group without hierarchy, a hierarchy by age (where the oldest group member decides), by merit (where the winner in a financial literacy quiz decides), by chance (where a randomly determined leader decides) and by election (where an elected leader decides). Experimental results suggest that there are no differences in the number of safe choices between the different hierarchy types. However, groups with a leader assigned on the basis of merit perform better in intellective tasks.
    Keywords: hierarchies; group decision-making; lottery choice; risk attitude; intellective tasks
    JEL: C92
    Date: 2020–05–31

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