nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2020‒09‒28
thirteen papers chosen by
Stan C. Weeber, McNeese State University

  1. The Heterogeneous Price of a Vote: Evidence from Multiparty Systems, 1993-2017 By Yasmine Bekkouche; Julia Cage; Edgard Dewitte
  2. Left Behind Voters, Anti-Elitism and Popular Will By Benoit Crutzen; Dana Sisak; Otto Swank
  3. A Tragic Solution to the Collective Action Problem: Implications for Corruption, Conflict and Inequality By Nieva, Ricardo
  4. Public debt rule breaking by time-inconsistent voters By Arawatari, Ryo; Ono, Tetsuo
  5. How Do Voters Evaluate the Age of Politicians? By Charles McCLEAN; ONO Yoshikuni
  6. Voting over a Distributed Ledger: An interdisciplinary perspective By Dhillon, Amrita; Kotsialou, Grammateia; McBurney, Peter; Riley, Luke
  7. Sustaining Cultural Diversity Through Cross-Cultural Competence By Bunce, John
  8. The Role of Economic Uncertainty in Rising Populism in the EU By Giray Gozgor
  9. Pricing Group Membership By Siddhartha Bandyopadhyay; Antonio Cabrales
  10. What Can Be the Way out of the Impasse in Belarus? By Rumen Dobrinsky
  11. Discontinuous and Continuous Stochastic Choice and Coordination in the Lab By Goryunov , Maxim; Rigos , Alexandros
  12. Public and private incentives for self-protection By François Salanié; Nicolas Treich
  13. Do citizens hold business accountable for greenwashing by demanding more government intervention? By Kolcava, Dennis

  1. By: Yasmine Bekkouche (Ecole d'Économie de Paris - Paris School of Economics (PSE)); Julia Cage (Département d'économie); Edgard Dewitte (Département d'économie)
    Abstract: What is the impact of campaign spending on votes? Does it vary across election types, political parties or electoral settings? Estimating these effects requires comprehensive data on spending across candidates, parties and elections, as well as identification strategies that handle the endogenous and strategic nature of campaign spending in multiparty systems. This paper provides novel contributions in both of these areas. We build a new comprehensive dataset of all French legislative and UK general elections over the 1993-2017 period. We propose new empirical specifications, including a new instrument which relies on the fact that candidates are differentially affected by regulation on the source of funding on which they depend the most. We find that an increase in spending per voter consistently improves candidates’ vote share, both at British and French elections, and that the effect is heterogeneous depending on the party. In particular, we show that spending by far-right candidates has much lower returns than spending by other parties, and that this can be partly explained by the social stigma attached to far-right voting. Our findings help reconcile the conflicting results of the existing literature, and improve our understanding of why campaigns matter.
    Date: 2020–07
  2. By: Benoit Crutzen (Erasmus School of Economics); Dana Sisak (Erasmus School of Economics); Otto Swank (Erasmus School of Economics)
    Abstract: Two common characteristics of populism are anti-elitism and favoring popular will over expertise. The recent successes of populists are often attributed to the common people, the majority of voters, being left behind by mainstream parties. This paper shows that the two characteristics of populism are responses to the common people being left behind. We develop a model that highlights two forces behind electoral success: numbers and knowledge. Numbers give the common people an electoral advantage, knowledge the elite. We show that electoral competition may lead parties to cater to the elites interest, creating a left-behind majority. Next, we identify conditions under which a left-behind majority encourages entry by a party offering an anti-elite platform. Finally, we identify conditions under which parties follow the opinion of the common people when that group would benefit from parties relying on experts.
    Keywords: Electoral competition, Populism, Pandering, Information
    JEL: D72 D83
    Date: 2020–09–08
  3. By: Nieva, Ricardo
    Abstract: We study the role of an enforcer in the effectiveness of selective incentives in solving the collective action problem when groups take part in a contest. Cost functions exhibit constant elasticity of marginal effort costs. If prize valuations are homogeneous, our source of heterogeneity induces full cost-sharing and the first-best individual contributions; further, the group probability of winning goes up. With heterogeneity in prize valuations, an increase in the effectiveness of the enforcer in conflict increases the group probability of winning only if the prize valuation of the enforcer is lower than de Lehmer mean of those of the other players; however, the induced partial cost sharing is not group efficient. If effectiveness "tends to infi nity", the collective action problem is solved with partial cost-sharing if that prize valuation is not too low. Tragically, if productivity is low (if the prize is private in our set up) this occurs with corrupt coalitions which have been shown to form together with conflict and inequality endogenously; otherwise, this occurs with non corrupt coalitions. Further, even if such valuation is too low the group winning probability goes up. In this latter case, over cost-sharing yields group efficiency.
    Keywords: Institutional and Behavioral Economics
    Date: 2020–09–15
  4. By: Arawatari, Ryo; Ono, Tetsuo
    Abstract: This study considers how present-biased preferences influence public debt policy when a violation of debt rules is possible. To address this issue, the study extends the framework of Bisin, Lizzeri, and Yariv (American Economic Review 105, (2015), 1711--1737) by allowing for rule breaking with extra costs, and we show that rule breaking occurs when a country exhibits a strong present bias. We further extend the model by introducing a political process for determining the debt rule, and we show that a polarization of debt rules emerges between countries with high and low degrees of present bias.
    Keywords: Debt ceilings; Present bias; Public debt.
    JEL: D72 D78 H62 H63
    Date: 2019–10–19
  5. By: Charles McCLEAN; ONO Yoshikuni
    Abstract: Elected officials tend to be older than most of the constituents they represent. Is this because voters generally prefer older politicians over younger ones? We investigate this question by conducting two novel survey experiments in Japan where we ask respondents to evaluate the photos of hypothetical candidates for mayor, and then alter candidate faces using artificial neural networks to make them appear as if they are younger or older, while keeping their facial structure and contours intact. Contrary to the observed candidate pool for mayors, the voters in our experiments disliked elderly candidates the most, but viewed younger candidates as equally favorable as middle-aged candidates. We also find that younger and middle-aged voters view candidates from their age group more favorably than others, whereas older voters do not, and that all voters use age as a heuristic for a candidate's issue emphases and traits. We then provide evidence for the external validity of our results using new data on actual mayoral elections. Together, these findings suggest that it is supply-side factors rather than voter demand that explain the shortage of younger politicians in public office.
    Date: 2020–08
  6. By: Dhillon, Amrita; Kotsialou, Grammateia; McBurney, Peter; Riley, Luke
    Abstract: This work discusses the potential of a blockchain based infrastructure for a decentralised online voting platform. When compared to paper based voting, online voting can vastly increase the speed that votes can be counted, expand the overall accessibility of the election system and decrease the cost of turnout. Yet despite these advantages, online voting for political office is subject to fraud at various levels due to its centralised nature. In this paper, we describe a general architecture of a centralised online voting system and detail which areas of such a system are vulnerable to electoral fraud. We then proceed to introduce the key ideas underlying blockchain technology as a decentralised mechanism that can address these problems. We discuss the advantages and weaknesses of the blockchain technology, the protocols the technology uses and what criteria a good blockchain protocol should satisfy (depending on the voting application). We argue that the decentralisation inherent in the blockchain technology could increase the public's trust in national elections, as well as eliminate voter impersonation and double voting. We conclude with a discussion regarding how economists and social scientists can collaborate with the blockchain community in a research agenda on the design of efficient blockchain protocols and new voting systems such as liquid democracy.
    Date: 2020–08–29
  7. By: Bunce, John
    Abstract: In much contemporary political discourse, valued cultural characteristics are threatened by interaction with culturally-distinct others, such as immigrants or a hegemonic majority. Such interaction often fosters cross-cultural competence (CCC), the ability to interact successfully across cultural boundaries. However most theories of cultural dynamics ignore CCC, making cultural diversity incompatible with mutually-beneficial inter-group interaction, and contributing to fears of cultural loss. Here, new theory, incorporating competing developmental paths to CCC and group identity valuation, illuminates how a common strategy of disempowered minorities can counter-intuitively sustain cultural diversity: Given strong group identity, minorities in a structurally-unequal, integrative society can maintain their distinctive cultural norms by learning those of the majority. Simple field methods in an Amazonian population demonstrate how to assess such strategies' effectiveness given predicted dynamics.
    Date: 2020–09–06
  8. By: Giray Gozgor
    Abstract: This paper examines the impact of economic uncertainty shocks on the populist voting behavior in the panel dataset of 24 European Union (EU) countries for the period from 1980 to 2020. In so doing, we focus on the shares of total populism, right-wing populism, and left-wing populism votes as well as a new indicator of economic uncertainty, so-called, the “World Uncertainty Index (WUI).” Using the fixed-effects, bias-corrected least-squares dummy variable (LSDVC), and Instrumental Variables (IV) estimations, we show that a higher level of the WUI is positively related to total populism and right-wing populist voting behavior. The baseline results remain consistent when we deal with potential issues of endogeneity, to address omitted variable bias, and to exclude the outliers.
    Keywords: populist attitudes in the European Union, voting behaviour, right-wing populism, left-wing populism, uncertainty shocks, economic policy uncertainty
    JEL: D72 D81 C33
    Date: 2020
  9. By: Siddhartha Bandyopadhyay; Antonio Cabrales
    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 efficient. 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
  10. By: Rumen Dobrinsky (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Public discontent with Mr. Lukashenko’s authoritarian rule had been piling up for years and came to the surface after the fraudulent presidential election held in August 2020. At present the country is in a political stalemate as the official election results are challenged by a large part of the population and by the West but recognised by Russia and China. In the present circumstances there are no straightforward ways to break the gridlock, and different scenarios are possible. At the same time the Belarusian economy is plagued with serious problems that call for radical economic reforms. Belarus’s economic and political problems are intertwined the way the political crisis will be resolved will shape the future of the Belarusian economy.
    Keywords: Belarus, elections, political stalemate, credibility and legitimacy of power, succession of power, economic reforms
    JEL: E65 P21 P30
    Date: 2020–09
  11. By: Goryunov , Maxim (Nazarbayev University); Rigos , Alexandros (Department of Economics, Lund University)
    Abstract: Coordination games have multiple equilibria under complete information. However, recent theoretical advances show that if players are uncertain but can acquire information about a payoff-relevant state of the world, the number of equilibria depends on whether they can implement strategies (stochastic choice rules) discontinuous in the state. We experimentally test these results in a two-player investment game. Through a minimal visual variation in the design (our treatment) we prompt participants to play strategies whereby their probability to invest is either continuous or discontinuous in the payoff-relevant state. When participants use continuous strategies, average behavior is consistent with play in the risk-dominant equilibrium, the unique theoretical prediction. When they use discontinuous strategies—in¬¬ which case there are multiple equilibria—average behavior is closer to the payoff-dominant equilibrium strategy. Additionally, we extend the theory to heterogeneous populations: the set of equilibria monotonically decreases in the proportion of players who use continuous strategies.
    Keywords: Coordination; Global games; Information acquisition; Continuous stochastic choice; Visual information; Experiment; Perception
    JEL: C72 C92 D83
    Date: 2020–08–31
  12. By: François Salanié (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Nicolas Treich (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)
    Abstract: Governments sometimes encourage or impose individual self-protection measures, such as wearing a protective mask in public during an epidemic. However, by reducing the risk of being infected by others, more self-protection may lead each individual to go outside the house more often. In the absence of lockdown, this creates a "collective offsetting effect", since more people outside means that the risk of infection is increased for all. However, wearing masks also creates a positive externality on others, by reducing the risk of infecting them. We show how to integrate these different effects in a simple model, and we discuss when self-protection efforts should be encouraged (or deterred) by a social planner.
    Date: 2020–07
  13. By: Kolcava, Dennis
    Abstract: Environmental policy in many Western democracies relies on voluntary environmental action by the private sector. This policy mode is strongly contested though. Proponents of introducing government regulation argue that voluntary corporate environmental action is rarely more than “greenwashing”. Can policymakers rely on public opinion to hold firms accountable for (lacking) contributions to environmental goods? I argue that greenwashing accusations reduce citizens’ confidence in both the effectiveness of voluntary environmental action by firms and the alignment of firms’ economic interest and environmental protection. Furthermore, I propose, that citizens’ support for government intervention increases in response to firms being accused of greenwashing. I test this argument in a survey experiment (N=2112) on a sample representative of the Swiss voting population. The analysis shows that accusing firms of greenwashing changes how citizens perceive voluntary environmental action by firms. This, however, does not translate into shifts in citizens’ regulatory preferences.
    Date: 2020–08–10

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