nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2020‒10‒26
eighteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Preferences over Taxation of High-Income Individuals: Evidence from a Survey Experiment By Dirk Engelmann; Eckhard Janeba; Lydia Mechtenberg; Nils Wehrhöfer
  2. Dynamic coalitions in complex task environments: To change or not to change a winning team? By Dario Blanco-Fernandez; Stephan Leitner; Alexandra Rausch
  3. Agenda control and reciprocity in sequential voting decisions By Fischbacher, Urs; Schudy, Simeon
  4. Dancing with the Populist. New Parties, Electoral Rules and Italian Municipal Elections By Massimo Bordignon; Tommaso Colussi
  5. Electoral Systems and Inequalities in Government Interventions By Garance Génicot; Laurent Bouton; Micael Castanheira De Moura
  6. Public Good Agreements under the Weakest-link Technology By Alejandro Caparrós; Michael Finus
  7. Team Formation in Coordination Games with Fixed Neighborhoods By Alejandro Caparrós; Esther Blanco; Philipp Buchenauer; Michael Finus
  8. Migrants' Missing Votes By Yvonne Giesing; Felicitas Schikora
  9. Regional Heterogeneity and U.S. Presidential Elections By Rashad Ahmed; M. Hashem Pesaran
  10. Non-convergence to stability in coalition formation games By Agust\'in G. Bonifacio; Elena Inarra; Pablo Neme
  11. Priests and Postmen: Historical Origins of National Identity By Rei, Claudia
  12. A Theory of Small Campaign Contributions By Laurent Bouton; Micael Castanheira De Moura; Allan Drazen
  13. Punishing or Rallying ‘Round the Flag? Heterogeneous Effects of Terrorism in South Tyrol By Alessandro Belmonte
  14. The Will of the People: Measuring social divides in multi-dimensional choice settings By Roy, Sunanda; Wu, Kuan Chuen; Chandra, Abhijit
  15. Optimal Voting Mechanisms on Generalized Single-Peaked Domains By Tobias Rachidi
  16. Evaluating the Effectiveness of Campaign Speeches:Evidence from the First National Speaking Tour By Johannes C. Buggle; Stephanos Vlachos
  17. A bi-directional approach to comparing the modular structure of networks By Daniel Straulino; Mattie Landman; Neave O'Clery
  18. Fiscal Forecast Manipulations and Electoral Results: Evidence from Portuguese Municipalities By Mamadou Boukari; Francisco José Veiga

  1. By: Dirk Engelmann; Eckhard Janeba; Lydia Mechtenberg; Nils Wehrhöfer
    Abstract: Mobility of high-income individuals across borders puts pressure on governments to lower taxes. A central tenet of the corresponding textbook argument is that mobile individuals react to tax differentials through migration, and in turn immobile individuals vote for lower taxes. We investigate to which extent this argument is complete. In particular, political ideology may influence voting on taxes. We vary mobility and foreign taxes in a survey experiment within the German Internet Panel (GIP), with more than 3,000 individuals participating. We find that while the treatment effects qualitatively confirm model predictions how voters take mobility of high-income earners into account when choosing domestic taxes, ideology matters: left-leaning high-income individuals choose higher taxes and emigrate less frequently than right-leaning ones. These findings are in line with the comparative-static predictions of a simple model of inequality aversion when the aversion parameters vary with ideology.
    Keywords: taxation, mobility, ideology, survey experiments
    JEL: D72 F22 H21
    Date: 2020
  2. By: Dario Blanco-Fernandez; Stephan Leitner; Alexandra Rausch
    Abstract: Decision makers are often confronted with complex tasks which cannot be solved by an individual alone, but require collaboration in the form of a coalition. Previous literature argues that instability, in terms of the re-organization of a coalition with respect to its members over time, is detrimental to performance. Other lines of research, such as the dynamic capabilities framework, challenge this view. Our objective is to understand the effects of instability on the performance of coalitions which are formed to solve complex tasks. In order to do so, we adapt the NK-model to the context of human decision-making in coalitions, and introduce an auction-based mechanism for autonomous coalition formation and a learning mechanism for human agents. Preliminary results suggest that re-organizing innovative and well-performing teams is beneficial, but that this is true only in certain situations.
    Date: 2020–10
  3. By: Fischbacher, Urs; Schudy, Simeon
    Abstract: We study how reciprocity affects the extent to which a chair can exploit her control over an agenda if a committee votes sequentially on a known series of binary proposals. We show in a parsimonious laboratory experiment that committee members form vote trading coalitions favoring early proposals not only when the sequence of proposals is exogenously given, but also when a chair controls the sequence of proposals. Vote trading occurs even though chairs manipulate the agenda in their favor. Punishment for chairs exploiting agenda control is weak as chairs reciprocate support by others more frequently than nonchairs. (JEL C92, D71, D72)
    Date: 2020
  4. By: Massimo Bordignon (Università Cattolica di Milano, European Fiscal Board, CESifo); Tommaso Colussi (Università Cattolica di Milano, IZA - Institute of Labor Economics)
    Abstract: This paper develops a theoretical framework that makes predictions on (a) the conditions under which a populist party decides to run and the policy position it takes and (b) voters’ response under different electoral systems. We test these predictions using data on Italian municipal elections over the 2009-2019 period and focusing on the electoral outcomes of the Five Star Movement. The empirical analysis shows: (i) populists are more likely to run under a Dual Ballot (DB) system and in municipalities where there is a large share of dissatisfied voters; (ii) when the populist runs, turnout increases under both Single and Dual Ballot systems; (iii) in a DB system, the populist candidate who ranked second in the first round has a higher probability of winning than the candidate of traditional party who ranked second by the same margin, as a result of increased turnout in the second round. We finally provide evidence that the low education and the young age of populist candidates are likely to deteriorate the efficiency of the local administration.
    Keywords: voting behavior, populism, Five Star Movement, municipal elections
    JEL: D72 D74 H56 D91
    Date: 2020–10
  5. By: Garance Génicot; Laurent Bouton; Micael Castanheira De Moura
    Abstract: This paper studies the political determinants of inequalities in government interventions under majoritarian (MAJ) and proportional representation (PR) systems. We propose a model of electoral competition with highly targetable government interventions and heterogeneous localities. We uncover a novel relative electoral sensitivity effect that affects government interventions only under the majoritarian (MAJ) systems. This effect tends to reduce inequality in government interventions under MAJ systems when districts are composed of sufficiently homogeneous localities. This effect goes against the conventional wisdom that MAJ systems are necessarily more conducive to inequality than PR systems. We illustrate the empirical relevance of our results with numerical simulations on possible reforms of the U.S. Electoral College.
    Keywords: Distributive Politics; Electoral Systems; Electoral College; Public Good; Inequality
    JEL: D72 H00
    Date: 2020–10
  6. By: Alejandro Caparrós; Michael Finus
    Abstract: We analyze the formation of public good agreements under the weakest-link technology. Whereas policy coordination is not necessary for symmetric players, it matters for asymmetric players; however, this fails in the absence of transfers. By contrast, with a transfer scheme, asymmetry may be an asset for cooperation. We characterize various types and degrees of asymmetry and relate them to the stability of self-enforcing agreements. Asymmetric distributions of autarky public good provision levels (also representing asymmetric interests in cooperation) that are positively skewed tend to be conducive to the stability of agreements. We show that under such conditions, even a coalition including all players can be stable. However, asymmetries that foster stability (instability) tend to be associated with low (high) gains from cooperation.
    Keywords: public goods; weakest-link technology; agreement formation
    JEL: C7 D7 H4 H7
    Date: 2019–07
  7. By: Alejandro Caparrós; Esther Blanco; Philipp Buchenauer; Michael Finus
    Abstract: This study contributes to the recent experimental literature addressing the role of team formation in overcoming coordination failure in weakest-link games. We investigate the endogenous formation of teams in fixed neighborhoods in which it is not possible to exclude players from influencing the weakest-link. Our experimental results show that team formation helps in overcoming the coordination problem, raises equilibrium provision levels, but falls short of providing the Pareto-optimal contribution. As the problem of multiplicity of Nash equilibria in weakest-link games is exacerbated when team formation is introduced, we provide Quantal Response Equilibrium (QRE) and Agent QRE analyses. The analysis demonstrates that team formation would solve the problem with (almost) perfectly rational agents, but also that our experimental results are consistent with (A)QRE models under bounded rationality.
    Keywords: Weakest-link; Coalition Formation; Experimental Economics; Quantal Response Equilibrium; Agent Quantal Response Equilibrium
    JEL: C72 C91 C92 H41
    Date: 2020–07
  8. By: Yvonne Giesing; Felicitas Schikora
    Abstract: Emigrants are less likely to participate in elections in their home country. They are also self-selected in terms of education, gender, age, and political preferences, changing the structure of the origin population. High emigration rates can therefore have a systematic influence on election results. Using administrative migration and voting data, we show that counties in Poland that have experienced large emigration following the accession to the European Union in 2004 are characterised by larger vote shares for right-wing parties. We use instrumental variable estimations that exploit distance to the border and to airports to account for endogenous migration patterns. Results are robust to estimations using first differences. Results hold for elections of the national and EU parliament and for different areas within Poland. Surprisingly, we find no effects on incumbent parties. In addition, our results show increased voting for parties with pro-European positions. Analysing the mechanisms using survey data, we illustrate that emigrants (stayers) have less (more) trust in right-wing parties. The results have important policy implications for voting regulations.
    Keywords: migration, voting, political economy, EU enlargement, trust
    JEL: D72 F22 O15 P16
    Date: 2020
  9. By: Rashad Ahmed; M. Hashem Pesaran
    Abstract: This paper develops a recursive model of voter turnout and voting outcomes at the U.S. county level to investigate the socioeconomic determinants of recent U.S. presidential elections. It exploits cross-section variations across U.S. counties and investigates the key determinants of the 2016 Presidential Election by allowing for regional heterogeneity and using high-dimensional variable selection algorithms such as Lasso and OCMT. It is shown that the relationship between many socioeconomic variables and voting outcomes are not uniform across U.S. regions. Specifically, allowing for regional heterogeneity explains the unexpected 2016 Republican victory. Moreover, incorporating regional heterogeneity improves electoral predictability among key swing states. Important factors explaining voting outcomes include incumbency effects, voter turnout, local economic performance, unemployment, poverty, educational attainment, house price changes, urban-rural scores, and international competitiveness. Our results also corroborate evidence of ‘short-memory’ among voters: economic fluctuations realized a few months prior to the election are indeed powerful predictors of voting outcomes as compared to their longer-term analogues. The paper also reports forecasts for the 2020 U.S. Presidential Election based on data available at the end of July 2020. The regional models predict a close electoral college outcome. The predictions are split: the Lasso-regional model forecasts a narrow Democratic electoral victory, while the OCMT-regional model forecasts a narrow Republican victory. All models point towards the Democratic candidate winning the popular vote.
    Keywords: voter turnout, popular and electoral college votes, simultaneity and recursive identification, high dimensional forecasting models, Lasso, OCMT
    JEL: C53 C55 D72
    Date: 2020
  10. By: Agust\'in G. Bonifacio; Elena Inarra; Pablo Neme
    Abstract: We study the problem of convergence to stability in coalition formation games in which the strategies of each agent are coalitions in which she can participate and outcomes are coalition structures. Given a natural blocking dynamic, an absorbing set is a minimum set of coalition structures that once reached is never abandoned. The coexistence of single and non-single absorbing sets is what causes lack of convergence to stability. To characterize games in which both types of set are present, we first relate circularity among coalitions in preferences (rings) with circularity among coalition structures (cycles) and show that there is a ring in preferences if and only if there is a cycle in coalition structures. Then we identify a special configuration of overlapping rings in preferences characterizing games that lack convergence to stability. Finally, we apply our findings to the study of games induced by sharing rules.
    Date: 2020–09
  11. By: Rei, Claudia (University of Warwick)
    Abstract: The rise of the modern state in Western Europe, saw the emergence of national identities in the nineteenth century. This paper evaluates the association between historical religious and state capacity in Portugal proxied by priests and postmen in 1875, and current measures of national identity proxied by voter turnout in democratic elections from 1975 to 2017. I find that places with a stronger historical presence of postmen vote more in any election, but they vote less in local elections relative to national elections. This result suggests a persistent association of historical state presence with national identity. Historical religious presence is also positively associated with voter turnout but in smaller magnitude. There is however no negative association with local elections: in contrast with historical state capacity, historical religious capacity is connected with the local rather than the national unit.
    Keywords: JEL Classification:
    Date: 2020
  12. By: Laurent Bouton; Micael Castanheira De Moura; Allan Drazen
    Abstract: We propose a theory of small campaign contributions driven by an electoral motive, i.e. the desire to influence election outcomes. Though small donors take as given the actions of others, strategic interactions induce patterns consistent with empirical findings, e.g. election closeness and underdog effects. We also study different forms of campaign finance laws, and show why caps should be combined with a progressive tax on contributions. Next, we introduce large donors and show how several conclusions in the literature may be modified by the interaction with small donors. Throughout, we discuss the empirical implications of our findings.
    Keywords: Campaign contributions; Small donors; Campaign finance laws; Elections; Income inequality
    JEL: D71 D72 H31
    Date: 2020–10
  13. By: Alessandro Belmonte
    Abstract: This paper studies heterogeneous electoral responses following terrorist attacks. I examine a rich panel data set containing detailed information on the geography of terrorism in South Tyrol, a Northernmost and predominantly German-speaking region of Italy, for a period spanning along 35 years. Exploiting the diverse nature of 337 attacks, I find that the Italian-speaking minority reacted to an increase in exposure to terrorist attacks by punishing the government party at the ballot box and supporting an extreme right-wing party. However, when terror prompted casualties, I find that more exposure was conducive of rally-round-the-flag momenta. I interpret these results in light of recent findings in social psychology on heterogeneous emotional reactions induced by terrorist attacks. My results inform the literature as well as the public debate on the diverse implications of terrorism.
    Keywords: Terrorism, voting, punishment effect, rally-effect, South Tyrol JEL Classification: D72, D74
    Date: 2020
  14. By: Roy, Sunanda; Wu, Kuan Chuen; Chandra, Abhijit
    Abstract: The paper studies profile components that cause plurality scores to differ from scores under other positional methods. We focus especially on the differences between plurality tallies and the Borda Count. We show that these profile components consist of an equal number of voters supporting a specific candidate in the first and last places. In particular they have an equal number of voters supporting a specific preference order and its reverse. In light of recent attention on partisanship and political polarization, it is important to have measures of such profiles and an assessment of how much they contribute to positional tallies. The methodological contribution of the paper lies in cutting through the combinatorial complexities that crop up in analysis of rank orders over n-candidates to characterize and measure these profiles.
    Date: 2019–03–30
  15. By: Tobias Rachidi
    Abstract: This paper studies the design of voting mechanisms in a setting with more than two alternatives and arbitrarily many voters who have generalized single-peaked preferences derived from median spaces as introduced in [Nehring and Puppe, 2007b]. This class of preferences is considerably larger than the well-known class of preferences that are single-peaked on a line. I characterize the voting rules that maximize ex-ante utilitarian welfare among all social choice functions satisfying strategy-proofness, anonymity, and surjectivity. The optimal mechanism takes the form of voting by properties, that is, the social choice is determined through a collection of binary votes on subsets of alternatives involving qualified majority requirements that reflect the characteristics of these subsets of alternatives. I illustrate my general optimality result by means of applications including, for instance, collective choice when preferences are single-peaked with respect to a tree. Finally, I emphasize the importance of my characterization result for the analysis of stable constitutions.
    Keywords: Voting; Generalized Single-Peaked Preferences; Mechanism Design
    JEL: D71 D72 D82
    Date: 2020–09
  16. By: Johannes C. Buggle; Stephanos Vlachos
    Abstract: This paper examines the effect of campaign visits in the context of the unique onesided nationwide speaking tour by a US Presidential candidate. During the 1896 election, the Democratic candidate went on a whistle stop train tour, while the Republican followed a frontporch campaign. To identify the causal effect of campaign speeches, we exploit several estimation strategies, including a within-county difference-in-differences design and a neighbor-pair fixed effect estimator. We find that one speech given by the Democratic candidate increased his vote share by about one percentage point on average. This increase stems from the persuasion of previously non-aligned industrial workers.
    Keywords: Elections, campaign strategies, persuasive communication
    JEL: D72 N41 N71 P48
    Date: 2020–09
  17. By: Daniel Straulino; Mattie Landman; Neave O'Clery
    Abstract: Here we propose a new method to compare the modular structure of a pair of node-aligned networks. The majority of current methods, such as normalized mutual information, compare two node partitions derived from a community detection algorithm yet ignore the respective underlying network topologies. Addressing this gap, our method deploys a community detection quality function to assess the fit of each node partition with respect to the other network's connectivity structure. Specifically, for two networks A and B, we project the node partition of B onto the connectivity structure of A. By evaluating the fit of B's partition relative to A's own partition on network A (using a standard quality function), we quantify how well network A describes the modular structure of B. Repeating this in the other direction, we obtain a two-dimensional distance measure, the bi-directional (BiDir) distance. The advantages of our methodology are three-fold. First, it is adaptable to a wide class of community detection algorithms that seek to optimize an objective function. Second, it takes into account the network structure, specifically the strength of the connections within and between communities, and can thus capture differences between networks with similar partitions but where one of them might have a more defined or robust community structure. Third, it can also identify cases in which dissimilar optimal partitions hide the fact that the underlying community structure of both networks is relatively similar. We illustrate our method for a variety of community detection algorithms, including multi-resolution approaches, and a range of both simulated and real world networks.
    Date: 2020–10
  18. By: Mamadou Boukari (Laboratoire de Recherche en Sciences Économiques et de Gestion (LaRSEG), Université de Kara); Francisco José Veiga (University of Minho and NIPE)
    Abstract: This paper aims to evaluate the impact of budget forecast manipulations on election results using a sample that covers all 308 Portuguese municipalities over the period running from 1998 to 2017. The results reveal that incumbent mayors overestimate revenues and expenditures. Overstating the budget more on the revenue side, they end up with a deficit. We check whether this opportunistic behavior is electorally benefcial. The results provide little or no evidence that election-year manipulations of revenue forecasts affect the vote shares of the parties of the incumbent mayors. On the other hand, the opportunistic management of total and capital expenditure forecasts pays off, which is consistent with previous results for Portugal indicating that increased total and, mainly, capital expenditures lead to higher vote shares.
    Keywords: Budget Forecast Errors, Elections, Municipalities, Portugal
    JEL: D72 H72
    Date: 2020

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