nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2020‒08‒24
eleven papers chosen by
Stan C. Weeber, McNeese State University

  1. Endogenous Group Formation and its impact on Cooperation and Surplus Allocation - An Experimental Analysis By Di Guida, Sibilla; Han, The Anh; Kirchsteiger, Georg; Lenaerts, Tom; Zisis, Ioannis
  2. Voting and Political Participation in the Aftermath of the HIV/AIDS Epidemic By Hani Mansour; Daniel I. Rees; James Reeves
  3. Globalization, Time-Preferences, and Populist Voting By Aronsson, Thomas; Hetschko, Clemens; Schöb, Ronnie
  4. The perils of democracy By Gregory de Angelo; Dimitri Dubois; Rustam Romaniuc
  5. A Dynamic Model of Political Party Equilibrium: The Evolution of ENP in Canada, 1870-2015 By J Stephen Ferris; Stanley L. Winer; Derek E. H. Olmstead
  6. Majoritarian Bargaining over Budgetary Divisions and Policy By Andrzej Baranski; Nicholas Haas; Rebecca Morton
  7. Pricing group membership By Siddhartha Bandyopadhyay; Antonio Cabrales
  8. Cooperation and the management of local common resources in remote rural communities: Evidence from Odisha, India By Ward, Patrick S.; Alvi, Muzna Fatima; Makhija, Simrin; Spielman, David J.
  9. Does Party Competition Affect Political Activism? By Anselm Hager; Johannes Hermle; Lukas Hensel; Christopher Roth
  10. A Political-Economy Analysis of the Provision of Urban Anti-Crime Technologies in a Model With Three Cities By Batabyal, Amitrajeet; Kourtit, Karima; Nijkamp, Peter
  11. The right to the city centre: political struggles of street vendors in Belo Horizonte, Brazil By Nogueira, Mara; Shin, Hyun Bang

  1. By: Di Guida, Sibilla (Department of Business and Economics); Han, The Anh (School of Computing); Kirchsteiger, Georg (ECARES); Lenaerts, Tom (Vrije Universiteit Brussel); Zisis, Ioannis (MLG)
    Abstract: This paper investigates how endogenous group formation combined with the possibility of repeated interaction impacts cooperation within groups and surplus distribution. We developed and tested experimentally a Surplus Allocation Game where cooperation of four agents is needed to produce surplus, but only two have the power to allocate it among the group members. Different matching procedures were used to test the impact of exogenous vs. endogenous group formation. Our results show that repeated interaction with the same partners (endogenous group formation) leads to a self-selection of agents into groups with different life-spans, whose duration is correlated with the behavior of both distributors and receivers. While behavior at the group level is diverse for surplus allocation and amount of cooperation, aggregate behavior is instead similar when groups are exogenously or endogenously formed. Our results cast doubts whether the possibility of repeated interaction can lead to cooperation and efficient outcomes when the ex-post bargaining power about the surplus distribution is very unequal. Rather, it seems to amplify differences in the cooperation and distribution behavior across groups.
    Keywords: Cooperation; surplus distribution; exogenous group formation; endogenous group formation
    JEL: C72 C92 D03
    Date: 2020–08–20
  2. By: Hani Mansour; Daniel I. Rees; James Reeves
    Abstract: This is the first study to examine the effect of experiencing a widespread, deadly epidemic on voting behavior. Using data on elections to the U.S House of Representatives and leveraging cross-district variation in HIV/AIDS mortality during the period 1983-1987, we document the effects of the HIV/AIDS epidemic on votes received by Democratic and Republican candidates. Beginning with the 1994 elections, there is a strong, positive association between HIV/AIDS mortality and the vote share received by Democratic candidates. Congressional districts that bore the brunt of the HIV/AIDS epidemic also saw substantial increases in Democratic voter turnout and contributions made to Democratic candidates.
    Keywords: HIV/AIDS, epidemic, Democratic, Republican
    JEL: D72 I18
    Date: 2020
  3. By: Aronsson, Thomas (Department of Economics, Umeå University); Hetschko, Clemens (University of Leeds and CESifo, Munich); Schöb, Ronnie (Freie Universität Berlin and CESifo)
    Abstract: Societies see growing support for populist politicians who advocate an end to globalization. Our behavioral economics model links impatience to voters’ appraisals of an income shock due to globalization that is associated with short-run costs and delayed gains. The model shows that impatient individuals may reject further globalization if they are subject to borrowing constraints. Using German data, we confirm that impatient voters choose right-wing antiglobalist parties. Similarly, we show for the United Kingdom that a preference for immediate gratification increases the support for right-wing anti-globalist parties as well as for Brexit. A policy implication of our study is that governments may use up-front redistribution to gain voters’ support for further globalization.
    Keywords: Globalization; time-preference; impatience; time-inconsistency; populism; Brexit; up-front redistribution
    JEL: D72 D91 F15 F61 F68 H53
    Date: 2020–07–22
  4. By: Gregory de Angelo (Claremont Graduate University [Claremont, CA ]); Dimitri Dubois (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Rustam Romaniuc (LEM - Lille économie management - LEM - UMR 9221 - UCL - Université catholique de Lille - Université de Lille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In this work we examine a common social dilemma in experimental economics, the public goods game, to determine how voting impacts pro-social behavior. As noted in Markussen et al. (2014), a democratic dividend exists. Couching the public goods game in a phenomenon that is playing out in much of the world – drastic income inequality – we examine the decision of groups to share local public goods with groups that have, effectively, no endowment to contribute toward public nor private consumption. Our results show the perils of democracy in that subjects in the position to vote use their advantageous situation to reward the ingroups at the expense of the less endowed outgroup members.
    Date: 2020
  5. By: J Stephen Ferris; Stanley L. Winer; Derek E. H. Olmstead
    Abstract: The effective number of political parties (ENP) in a single member plurality rule electoral system is analyzed as a dynamic process whereby the tournament nature of the election contest induces excessive entry and sunk entry costs promote persistence even as Duverger-Demsetz type political competition works to winnow unsuccessful minor candidates and parties. The result is a fringe of parties that continue to circulate in long run equilibrium. The factors hypothesized to affect the entry and exit of candidates and parties are analyzed for Canada from 1870 through 2015 first using an auto-regressive distributed lag (ARDL) model and then allowing for asymmetric adjustment by adapting NARDL panel estimation techniques. After finding evidence of asymmetry at the party level, the NARDL results uncover two new stylized facts for ENP at the national party level: (i) a continual rise in the short run fringe after 1945; and (ii) a concomitant long run decline in ENP to about 1.5 (below Duverger’s prediction of 2). The long run time path in ENP at the party level is inversely correlated with uncertainty-based measures of electoral competition, suggesting that movements in long run ENP closer to 2 are an indicator of more rather than less electoral competition.
    Keywords: expected number of parties and candidates, contestability, entry and exit, Duverger’s Law, political competitiveness, asymmetric adjustment, ARDL and NARDL modeling
    JEL: D72 C41 C24
    Date: 2020
  6. By: Andrzej Baranski; Nicholas Haas; Rebecca Morton (Division of Social Science)
    Abstract: We report the results of a field-in-the-lab experiment in which subjects bargain over a two-dimensional agenda: a donation to a political interest group and the division of a sum of money. We show that subjects sacrifice monetary gains to secure preferred policies and that behaviorally elicited preference intensity correlates with bargaining behavior. We find an ideological majority advantage and a status- quo premium. Minorities benefit most from negotiating on two dimensions because the budgetary division problem allows compromise. Finally, we show that induced preferences over artificial policies fail to capture the bargaining dynamics that arise when real ideological choices are involved.
    Date: 2020–07
  7. By: Siddhartha Bandyopadhyay (University of Birmingham); Antonio Cabrales (University College London)
    Abstract: We consider a model where agents differ in their 'types' which determines their voluntary contribution towards a public good. We analyze what the equilibrium composition of groups are under centralized and centralized choice. We show that there exists a top-down sorting equilibrium i.e. an equilibrium where there exists a set of prices which leads to groups that can be ordered by level of types, with the first k types in the group with the highest price and so on. This exists both under decentralized and centralized choosing. We also analyze the model with endogenous group size and examine under what conditions is top-down sorting socially effcient. We illustrate when integration (i.e. mixing types so that each group's average type if the same) is socially better than top-down sorting. Finally, we show that top down sorting is efficient even when groups compete among themselves.
    Keywords: Top down sorting, Group formation, Public good, Segregation, Integration.
    JEL: D02 D64 D71 H41
    Date: 2020–08
  8. By: Ward, Patrick S.; Alvi, Muzna Fatima; Makhija, Simrin; Spielman, David J.
    Abstract: It is widely recognized that local management of common pool resources can be more efficient and more effective than private markets or top-down government management, especially in remote rural communities in which the institutions necessary for the enforcement of centrally-imposed regulations may be weak or prone to elite capture. In this paper, we explore the propensity for cooperation in the management of local common resources by introducing a variant of a public goods game among remote rural communities in the state of Odisha, in eastern India. We explore various patterns of cooperation, including free riding behavior, unconditional cooperation (altruism), and conditional cooperation, in which individuals' propensity toward cooperation is tied to their beliefs about the level of cooperation among their peers. We find that a significant portion of our sample fall into this latter category, but also that their expectations about the level of contributions among their peers is somewhat malleable, and beneficial activities from external actors such as NGOs can foster increased social cohesion which increases both the level of these expectations and the manner in which these expectations are translated into subsequent cooperative behavior. We also find that cooperation is somewhat fragile, with group heterogeneity and risk in the returns to cooperative behavior posing a threat to the stability of the cooperative system.
    Keywords: INDIA; SOUTH ASIA; ASIA; rural areas; resources; cooperation; nongovernmental organizations; risk; governance; local public goods; local common resources; experimental games; voluntary contribution mechanism
    Date: 2020
  9. By: Anselm Hager; Johannes Hermle; Lukas Hensel; Christopher Roth
    Abstract: Does party competition affect political activism? This paper studies the decision of party supporters to join political campaigns. We present a framework that incorporates supporters’ instrumental and expressive motives and illustrates that party competition can either increase or decrease party activism. To distinguish between these competing predictions, we implemented a field experiment with a European party during a national election. In a seemingly unrelated party survey, we randomly assigned 1,417 party supporters to true information that the canvassing activity of the main competitor party was exceptionally high. Using unobtrusive, real-time data on party supporters’ canvassing behavior, we find that treated respondents are 30 percent less likely to go canvassing. To investigate the causal mechanism, we leverage additional survey evidence collected two months after the campaign. Consistent with affective accounts of political activism, we show that increased competition lowered party supporters’ political self-efficacy, which plausibly led them to remain inactive.
    Keywords: party activism, electoral competition, field experiment, campaigns
    Date: 2020
  10. By: Batabyal, Amitrajeet; Kourtit, Karima; Nijkamp, Peter
    Abstract: We use a theoretical political-economy model with three cities and analyze three questions. First, should police in these cities have access to contentious crime fighting technologies such as facial recognition software? We describe a condition involving benefit, cost, and spatial spillover terms which tells us when the police ought to be provided with this technology. Second, if police are to be offered this technology then what are the properties of a policy regime that provides this technology in a decentralized way? We identify a condition that depends only on benefit and cost terms which tells us when this technology is to be made available in the cities in a decentralized way. Finally, what are the properties of a policy regime that provides the technology in a centralized way with equal cost sharing by the cities? We obtain two conditions involving benefit and spatial spillover terms that describe scenarios in which (i) the technology is provided with majority voting in a city even though it is inefficient to do so and (ii) it is efficient to provide the technology in a city but majority voting will lead to this technology not being provided.
    Keywords: Centralization, Decentralization, Political-Economy, Technology, Urban Crime
    JEL: K42 R11 R50
    Date: 2019–11–07
  11. By: Nogueira, Mara; Shin, Hyun Bang
    Abstract: The paper aims to investigate the relations between work and urban space, focusing on the struggles of street vendors for the “right to the city centre” in Belo Horizonte, Brazil. We join critical debates on Brazil’s internationally praised urban reform by focusing on informal workers. Beyond lacking the protection of labour laws, the “right to the city” (RttC) of such workers has been consistently denied through restrictive legislations and policies. In the context of the “crisis” of waged labour, we explore the increasing centrality of urban space for working-class political struggles. Looking at Belo Horizonte, the paper traces the relation between urban participatory democracy and the development of legal-institutional frameworks that restricted street vendors’ access to urban space in the city. In the context of an urban revitalisation policy implemented in 2017, we then explore the use of legal frameworks to remove street vendors from public areas of the city and the resulting political resistance movement. The discussion focuses on the emergence of the Vicentão Occupation, a building squatted by homeless families and street vendors in conflict with the local state. Though this case, we explore the radical potential of contemporary articulations of Henri Lefebvre’s framework emerging from the confluence of diverse local urban struggles for “the right to the city centre”. Ultimately we argue for an understanding of the RttC as a process and a site of continual struggle whose terrain is shaped, but cannot be replaced by, legal frameworks that need to be constantly contested and evolving to reflect the shifting socio-spatial relations.
    Keywords: the right to the city; popular economics; urban politics; crisis of labour
    JEL: R14 J01
    Date: 2020–08

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