nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2020‒08‒10
sixteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Convergence and divergence in dynamic voting with inequality By Guilmi, Corrado Di; Galanis, Giorgos
  2. How Do Voters Respond to Welfare vis-à-vis Public Good Programs? An Empirical Test for Clientelism By Pranab Bardhan; Sandip Mitra; Dilip Mookherjee; Anusha Nath
  3. Expressive voting and its costs By Vincent Pons; Clémence Tricaud; Vestal Mcintyre
  4. Too many Voters to Fail: Influencing and Political Bargaining for Bailouts By Schilling, Linda Marlene
  5. A vote for Europe? The 2019 EP elections from the voters' perspective By Grande, Edgar; Vidal, Guillem
  6. Abortions, Brexit and Trees By Kleiner, Andreas; Moldovanu, Benny
  7. Deciding how to decide on public goods provision: The role of instrumental vs. intrinsic motives By Philipp Harms; Claudia Landwehr; Maximilian Lutz; Markus Tepe
  8. Ground work vs. social media: how to best reach voters in French municipal elections? By Vincent Pons; Vestal Mcintyre
  9. Never-ending reformism from above and dissatisfaction from below: The paradox of Moroccan post-spring politics By Cavatorta, Francesco; Merone, Fabio
  10. Scoring Rules and Scoring Runoff Systems: Susceptibility to Sincere Truncation under three scoring models for incomplete preferences By Eric Kamwa
  11. Legitimizing Policy By Chen, Daniel L.; Michaeli, Moti; Spiro, Daniel
  12. Electoral Competition with Fake News By Grossman, Gene M.; Helpman, Elhanan
  13. Covenants before the swords: The limits of efficient cooperation in heterogenous groups By Christian Koch; Nikos Nikiforakis; Charles N. Noussair
  14. The limits of verification in preventing the spread of false information on networks By Kinga Makovi; Manuel Munoz-Herrera
  15. Instiutions, Opportunism and Prosocial Behavior: Some Experimental Evidence By Antonio Cabrales; Irma Clots-Figueras; Roberto Hernán-Gonzalez; Praveen Kujal
  16. Social Groups and the Effectiveness of Protests By Marco Battaglini; Rebecca B. Morton; Eleonora Patacchini

  1. By: Guilmi, Corrado Di (Economics Discipline Group, University of Technology Sydney, Australia, and Centre for Applied Macroeconomic Analysis, Australian National University, Canberra, Australia.); Galanis, Giorgos (Goldsmiths, University of London, UK, and Centre for Applied Macroeconomic Analysis, Australian National University.)
    Abstract: The original formulation of the median voter theorem predicts parties’ political convergence in a static setup, under two key assumptions : voters preferences being fixed and parties being opportunistic (purely office-motivated). Drawing on recent empirical findings about the evolution of voters’ political preferences, this paper verifies whether the median voter theorem’s results hold when (i) the control variables that influence voters’ preferences endogenously evolve over time, and (ii) parties are not opportunistic. We present a dynamic two-party voting model in which voters’ preferences evolve over time depending on observable common factors and unobservable idiosyncratic characteristics. In such a setting, the convergence of parties’ platforms to the centre is a special case within a range of results that include instability and equilibria at one of the extremes. Moreover, convergence of parties’ platforms is achieved not as the result of electoral strategies, but when neither party has enough support to pursue its agenda.
    Keywords: median voter ; dynamic voting ; political preferences JEL codes: C62 ; D72 ; E71
    Date: 2020
  2. By: Pranab Bardhan; Sandip Mitra; Dilip Mookherjee; Anusha Nath
    Abstract: This paper examines allocation of benefits under local government programs in West Bengal, India to isolate patterns consistent with political clientelism. Using household survey data, we find that voters respond positively to private welfare benefits but not to local public good programs, while reporting having benefited from both. Consistent with the voting patterns, shocks to electoral competition induced by exogenous redistricting of villages resulted in upper-tier governments manipulating allocations across local governments only for welfare programs. Through the lens of a hierarchical budgeting model, we argue that these results provide credible evidence of the presence of clientelism rather than programmatic politics, and how this distorts the allocation of government programs both within and across villages.
    Keywords: Welfare programs; Public goods; Clientelism; Voting
    JEL: H40 O10 H76 P48 H75
    Date: 2020–07–08
  3. By: Vincent Pons (Harvard Business School - Harvard University [Cambridge], National Bureau of Economic Research - National Bureau of Economic Research); Clémence Tricaud (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - ENSAE ParisTech - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, X - École polytechnique); Vestal Mcintyre (Harvard Kennedy School - Harvard Kennedy School)
    Abstract: Voters who support a candidate with little or no chance of winning face a choice: whether to express their true preference, vote for their preferred candidate, and risk wasting their vote; or vote strategically for a second-best candidate who is more likely to be in a position to win. To explore this tradeoff, this study focuses on French parliamentary and local elections, in which the top two candidates always qualify for the second round, and others also qualify if they get a number of voters higher than 12.5 percent of registered citizens. Results show that third candidates who qualify for the second round tend to prefer staying in the race rather than dropping out. Many of the third candidates' supporters then act expressively and vote for them instead of their second-best candidate among the top two. The study finds this disproportionally harms the candidate ideologically closest to the third and often causes their defeat. This behavior by voters and candidates likely affects the results of many elections beyond those in the study, including European elections and other proportional elections, where voters face similar trade-offs. The results call for ideologically similar parties to reach agreements limiting the number of candidates or lists that are competing, and for the adoption of voting systems in which electoral outcomes are less distorted by voters' and candidates' failure to act strategically.
    Date: 2019–05
  4. By: Schilling, Linda Marlene
    Abstract: The paper provides a novel theory of how banks not only exploit but also cause being perceived as 'too big to fail'. Bank creditors are also voters. Economic voting prompts politicians to grant bailouts given a bank failure. The bank's capital structure acts as a tool to impact the electoral vote and thus the bail-out by changing the relative group size of voters who favor as opposed to voters who object the bailout. The creditors' anticipation of high bailouts, in return, allows the bank to reduce funding costs today, by this maximizing revenues.
    Keywords: bail-outs; Capital Structure; Corporate Finance; Economic voting; influencing; political economy
    JEL: D72 G3 P16
    Date: 2019–12
  5. By: Grande, Edgar; Vidal, Guillem
    Abstract: In this paper we analyze the 2019 EP elections from the voters' perspective. It is based on a novel post-electoral survey covering five North West European countries: Austria, Germany, France, Sweden and the UK. In particular we address the following questions: How important were the lead candidates in the election campaign? Which issues were most important for voters? How do these issues relate to voters' political preferences and ideological orientations? Our findings show that the Spitzenkandidaten process failed to effectively connect European party groups with their voters. Moreover, our analysis reveals that voters had clear issue priorities, which reflected, to a considerable extent, the new cleavage structure which has been shaping party competition in North West European countries in the last two decades.
    Keywords: European Union,EP elections,lead candidates,public opinion,cleavages
    Date: 2020
  6. By: Kleiner, Andreas; Moldovanu, Benny
    Abstract: We study how parliaments and other committees vote to select one out of several alternatives in situations where not all available options can be ordered along a "left-right" axis. Practically all democratic parliaments routinely use Sequential Binary Voting Procedures in order to select one of several alternatives. Which agendas are used in practice, and how should they be designed ? We assume that preferences are single-peaked on an arbitrary tree and we study convex agendas where, at each stage in the sequential, binary voting process, the tree of remaining alternatives is divided in two subtrees that are subjected to a binary Yes-No vote. In this wide class of situations we show that dynamic, strategic voting is congruent with sincere, unsophisticated voting even if agents are privately informed, and no matter what their beliefs about other voters are. We conclude the paper by illustrating the empirical implications of our results for two large case studies from Germany and from the UK.
    Keywords: agenda; Revealed Preference; voting
    JEL: D02 D72 D82
    Date: 2019–12
  7. By: Philipp Harms (Johannes Gutenberg-University Mainz, Germany); Claudia Landwehr (Johannes Gutenberg-University Mainz, Germany); Maximilian Lutz (University of Oldenburg); Markus Tepe (University of Oldenburg)
    Abstract: What determines citizens’ preferences over alternative decision-making procedures – the expected personal gain associated with a procedure, or the intrinsic value assigned to it? To answer this question, we present the results of a laboratory experiment in which participants select a procedure to decide on the provision of a public good. In the first stage of the experiment, they choose between majority voting and delegation to a welfare-maximizing “expert” as alternative decision-making procedures. In the second stage of the experiment, subjects either vote on the provision of the public good, or the decision is taken by the expert. We define three treatments in which participants receive information about whether a majority in the group faces a positive or negative payoff from the provision of the public good, about whether there is a positive group benefit from its provision, or neither kind of information. Our findings confirm the importance of instrumental motives in procedural choices. At the same time, however, a significant share of participants chooses a procedure that does not maximize their individual benefit. While majority voting seems to be preferred for intrinsic values of fairness and equality, support for delegation to the welfaremaximizing expert increases if the group benefit from a public good is known – even in participants who are net payers for its provision.
    Keywords: process preferences, public goods, laboratory experiment
    Date: 2020–07–01
  8. By: Vincent Pons (Harvard Business School - Harvard University [Cambridge], National Bureau of Economic Research - National Bureau of Economic Research); Vestal Mcintyre (Harvard Kennedy School - Harvard Kennedy School)
    Abstract: Platforms such as Twitter and Facebook are widely considered important, if controversial, channels for candidates and parties around the world to communicate with citizens and win votes. While political parties in France make less use of social media than in the U.S. and other Western democracies, there is disagreement of how it will affect French democracy. But discussions of the promise and peril of social media's role in elections may miss a higher-order issue: what limited evidence exists suggests that outreach via social media has little effect on voting behavior. By contrast, a series of studies show that face-to-face canvassing has a strong potential to mobilize and persuade voters. These findings give grounds for parties to increase their canvassing efforts, and for the government to enact policies that ease the way for citizens to participate in elections.
    Date: 2020–02
  9. By: Cavatorta, Francesco; Merone, Fabio
    Abstract: For scholars, policy-makers and casual observers, there is no doubt that Morocco has undergone an impressive transformation process since Mohammed VI came to power in 1999. The country projects an image of liberal-democratic modernity and socio-economic progress that the international community is happy to go along with. But at the heart of Moroccan modernization lies a glaring paradox: despite two decades of reforms, the dissatisfaction of ordinary citizens with the way the system works has been consistently high, and a number of socio-economic and political indicators do not support the regime's claim that the country has democratised or is democratising. This article examines the country's political system through the reformist process - political, economic and social - that began in the 2000s, continued with the constitutional changes of 2011 and culminated with the two PJD-led governments that followed the parliamentary elections of 2011 and 2016. In particular, this study examines the reformist drive in the context of the inter-paradigm debate between democratisation and authoritarian resilience. We employ four criteria to determine to what extent Morocco has democratised: the accountability of decision-makers, the participation of a plurality of voices in the formulation of policies, the degree of individual freedoms and the protection of human rights. This article concludes that the reformist process is simply a narrative the regime has adopted to fend off international criticism and to reconfigure domestic institutions. The fundamentally authoritarian nature of the regime has not changed, and the dominant institutional role that the monarch - unelected and unaccountable - plays undermines all claims of democratisation.
    Date: 2020
  10. By: Eric Kamwa (LC2S - Laboratoire caribéen de sciences sociales - CNRS - Centre National de la Recherche Scientifique - UA - Université des Antilles)
    Abstract: A voting rule is said to be vulnerable to the truncation paradox if some voters may want to favor a more preferable outcome by providing only a part of their sincere rankings on the competing candidates rather than listing their entire preference rankings on all the competing candidates. This voting paradox was first introduced by Brams (1982). This paper provides for three-candidate elections and for large electorates, a characterization and an evaluation of the likelihood of the truncation paradox for the whole family of one-shot scoring rules and runoff scoring rules. We assume three scoring models for dealing with incomplete rankings: the pessimistic, the optimistic and the averaged scoring models. We find that under the optimistic model, all the one-shot scoring rules are immune to the truncation paradox and this paradox is more likely to occur under the pessimistic scoring model than under the averaged scoring model. For each of the scoring runoff rules, we find that the likelihood of the truncation paradox is higher under the pessimistic scoring model and it is lower under the optimistic scoring model. Our analysis is performed under the Impartial Anonymous Culture assumption.
    Date: 2020–06–23
  11. By: Chen, Daniel L.; Michaeli, Moti; Spiro, Daniel
    Abstract: In many settings of political bargaining over policy, agents care not only about getting their will but also about having others approve the chosen policy thus giving it more weight. What is the effect on the bargaining outcome when agents care about such legitimacy of the policy? We study this question theoretically and empirically. We show that the median-voter theorem holds in groups that are ideologically very cohesive and in groups with extreme ideological disagreement. However, in groups with intermediate ideological disagreement, the median-voter theorem does not hold. This is since, on the individual level, ideological disagreement with the median has a non-monotonic effect on the policy. We test our model in a natural experimental setting—U.S. appeals courts—where causal identification is based on random assignment of judges into judicial panels, each consisting of three judges who rule on a case. Here judges care about legitimacy of the policy they write because a norm of consensus prevails and because increased legitimacy reduces the likelihood of the judicial case to be heard by the Supreme Court. The predicted pattern of how policies depend on the participants’ ideologies are corroborated by our empirical tests.
    JEL: D7 K0 Z1
    Date: 2020–07
  12. By: Grossman, Gene M.; Helpman, Elhanan
    Abstract: Misinformation pervades political competition. We introduce opportunities for political can- didates and their media supporters to spread fake news about the policy environment and perhaps about parties'positions into a familiar model of electoral competition. In the baseline model with full information, the parties'positions converge to those that maximize aggregate welfare. When parties can broadcast fake news to audiences that disproportionately include their partisans, policy divergence and suboptimal outcomes can result. We study a sequence of models that impose progressively tighter constraints on false reporting and characterize situa- tions that lead to divergence and a polarized electorate.
    Keywords: Electoral Competition; fake news; policy positions
    JEL: D78
    Date: 2019–12
  13. By: Christian Koch; Nikos Nikiforakis; Charles N. Noussair (Division of Social Science)
    Abstract: When agents derive heterogeneous benefits from cooperation, a tension often arises between efficiency and equality that can impede their ability to cooperate efficiently. We design a lab experiment, in which we investigate the efficacy of communication and punishment, separately and jointly, to promote cooperation in such an environment. Our results reveal that communication allows most groups to establish covenants, i.e., agreements about the profile of individual contributions, while the threat of punishment (the ‘sword’) discourages deviations from the covenants. Most covenants, however, reflect a concern for equality. As a result, cooperation levels and earnings fall substantially below the maximum possible. The timing of communication is also critical: covenants reduce the use of sanctions dramatically when communication precedes punishment opportunities but when punishment precedes communication opportunities, a history of sanctioning emerges which reduces the probability that groups establish covenants subsequently. Our findings illustrate not only the benefits of early communication, but also some limits to self-governance in heterogeneous groups. JEL Codes: C92, H41, D74
    Date: 2020–06
  14. By: Kinga Makovi; Manuel Munoz-Herrera (Division of Social Science)
    Abstract: The spread of false information on social networks has garnered ample scientific and popular attention. To counteract this spread, verification of the truthfulness of information has been proposed as a key intervention. Using a behavioral experiment with over 2000 participants we analyze individuals' willingness to spread false information in a network. All individuals in the network have aligned incentives, making lying attractive, countering an explicit norm of truth-telling that we imposed. We investigate how verifying the truth, endogenously or exogenously, impacts the choices to lie or to adhere to the norm of truth-telling, compared to a setting without the possibility of verification. The three key take-aways are: (i) verification is only moderately e ective in reducing the spread of lies; its effectivity is (ii) contingent on the agency of individuals to seek truth, and (iii) the exposure of liars, and not only the lies told. These suggest that verification is not a blanket solution. In order to enhance its e ectivity, it should be combined with fostering a culture of truth-seeking and with information on who spreads lies, not only on the lies told.
    Date: 2020–03
  15. By: Antonio Cabrales (Dept. of Economics, Universidad Carlos III de Madrid); Irma Clots-Figueras (School of Economics, University of Kent); Roberto Hernán-Gonzalez (Burgundy School of Business); Praveen Kujal (Dept. of Economics, Middlesex University)
    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
  16. By: Marco Battaglini; Rebecca B. Morton; Eleonora Patacchini (Division of Social Science)
    Abstract: We present an informational theory of public protests, according to which public protests allow citizens to aggregate privately dispersed information and signal it to the policy maker. The model predicts that information sharing of signals within social groups can facilitate information aggregation when the social groups are sufficiently large even when it is not predicted with individual signals. We use experiments in the laboratory and on Amazon Mechanical Turk to test these predictions. We find that information sharing in social groups significantly affects citizens' protest decisions and as a consequence mitigates the effects of high conflict, leading to greater efficiency in policy makers' choices. Our experiments highlight that social media can play an important role in protests beyond simply a way in which citizens can coordinate their actions; and indeed that the information aggregation and the coordination motives behind public protests are intimately connected and cannot be conceptually separated.
    Date: 2020–02

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