nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2020‒12‒07
seventeen papers chosen by
Stan C. Weeber, McNeese State University

  1. The Idea of Jurisdictional Representation in a Federation: A Proposal and Illustrations from Recent Canadian and US Elections By Syed M. Ahsan
  2. Voter turnouts, voting rules and the abolishment of run-off elections By Salvatore Barbaro
  3. Cause and Effect in Political Polarization: A Dynamic Analysis By Steven Callander; Juan Carlos Carbajal
  4. The COVID-19 Pandemic and the 2020 U.S. Presidential Election By Baccini, Leonardo; Brodeur, Abel; Weymouth, Stephen
  5. Prize sharing rules in collective contests: When does group size matter? By Dhritiman Gupta
  6. Cooperation in a Fragmented Society: Experimental Evidence on Syrian Refugees and Natives in Lebanon By Michalis Drouvelis; Bilal Malaeb; Michael Vlassopoulos; Jackline Wahba
  7. The Volunteer’s Dilemma explains the Bystander Effect By Pol Campos-Mercade
  8. Do rights to resistance discipline the elites? An experiment on the threat of overthrow By Konstantin Chatziathanasiou; Svenja Hippel; Michael Kurschilgen
  9. The Cost of a Divided America: An Experimental Study Into Destructive Behavior By Wladislaw Mill; John Morgan
  10. Social Proximity and the Erosion of Norm Compliance By Bicchieri, Cristina; Dimant, Eugen; Gächter, Simon; Nosenzo, Daniele
  11. Effective Carbon Prices and Sub-Global Climate Cooperation By Dominioni, Goran
  12. The effect of monetary incentives on sociality induced cooperation By Tatiana Kozitsina; Alexander Chaban; Evgeniya Lukinova; Mikhail Myagkov
  13. The Electoral Consequences of Nuclear Fallout: Evidence from Chernobyl By Mehic, Adrian
  14. On social networks that support learning By Itai Arieli; Fedor Sandomirskiy; Rann Smorodinsky
  15. Importing Political Polarization? The Electoral Consequences of Rising Trade Exposure By Autor, David; Dorn, David; Hanson, Gordon H.; Majlesi, Kaveh
  16. The Institutionalization of Irrigation and the Effects thereof: the Case of the Palestinian Water User Associations By Jeanne PERRIER
  17. Institutional Imperfections and Buyer-Induced Holdout in Land Acquisition By Sreeparna Saha; Prabal Roy Chowdhury; Jaideep Roy; Grazyna Wiejak-Roy

  1. By: Syed M. Ahsan
    Abstract: The idea of proportional representation has been circulating for over two hundred years and is widely practiced, among other, in post-war Europe. The primary focus is to allow smaller parties, minorities and other disenfranchised groups in society systematic representation in the national legislature. This paper proposes a novel idea of jurisdictional-level proportionality specifically targeted at federal systems. Emphasising the primacy of jurisdictions (namely provinces and states) within a federation, we use data on the voting pattern in each such jurisdiction to determine the allocation of elected delegates (or electoral seats for that matter) that would be utilized in the eventual makeup of the ruling government. The proposed scheme is the simplest that we know of. All it requires is the record of all votes cast by individuals in favour of the candidate of their choice in a given constituency. Our design ensures that the mechanism encompass the governance virtues such as (a) inclusivity and stability of the elected government, (b) accountability of elected delegates and their interface with voters, and (c) and fully conform to the principle of proportionality. In the parliamentary mode, while it may tend to predict minority governments more often, it allows each major party a greater degree of freedom to forge a ruling coalition. When reviewing the US Presidential election, it appears that the outcome here may change too, typically in favour of the plurality winner of nation-wide popular votes, even though the seat arithmetic is based on proportional votes within each state in the union.
    Keywords: the agency problem, effective governance, gerrymandering, inclusive representation, jurisdictional representation, proportional representation, stable government
    JEL: D72 H77 I31
    Date: 2020
  2. By: Salvatore Barbaro (Johannes Gutenberg University)
    Abstract: Due to low election turnouts, the debate on run-off elections to fill a mayor’s office flames up again and again. On average, roughly 37% cast a vote in recent local run-off elections to fill the office of mayors and district chief executives. A recent attempt by the state of North Rhine-Westphalia to substitute the strict-majority voting cum run-off by the plurality rule failed in court. The reasons given for the ruling by the state’s constitutional court were that the considerations were not sufficient with regard to the “democratic principle of majority decision” However, by taking the “principle of majority decision” as a basis, neither the strict majority voting cum run-off nor the plurality rule meet its requirements. By using the methods of social choice theory, we show that only the simple-majority rule is appropriate to comply with the principle of majority decision. Aside its axiomatic superiority, we show that by using the simplemajority rule a second-round run-off is dispensable. Thus, if run-off elections should be abolished, then the strict-majority rule should be replaced by a superior voting scheme (which identifies the Condorcet winner) rather than by an inferior one.
    Date: 2020–09–01
  3. By: Steven Callander (Stanford GSB); Juan Carlos Carbajal (UNSW-Sydney)
    Abstract: Political polarization is an important and enduring puzzle. Complicating attempts at explanation is that polarization is not a single thing. It is both a description of the current state of politics today and a dynamic path that has rippled across the political domain over multiple decades. In this paper we provide a simple model that is consistent with both the current state of polarization in the U.S. and the process that got it to where it is today. Our model provides an explanation for why polarization appears incrementally and why it was elites who polarized first and more dramatically whereas mass polarization came later and has been less pronounced. The building block for our model is voter behavior. We take an ostensibly unrelated finding about how voters form their preferences and incorporate it into a dynamic model of elections. On its own this change does not lead to polarization. Our core insight is that this change, when combined with the response of strategic candidates, creates a feedback loop that is able to replicate many features of the data. We explore the implications of the model for other aspects of politics and trace out what it predicts for the future course of polarization
    Keywords: Political Polarization, Electoral Competition, Dynamic Analysis, Behavioral Voters.
    Date: 2020–11
  4. By: Baccini, Leonardo (McGill University); Brodeur, Abel (University of Ottawa); Weymouth, Stephen (Georgetown University)
    Abstract: What is the effect of the COVID-19 pandemic on the 2020 U.S. presidential election? Guided by a pre-analysis plan, we estimate the effect of COVID-19 cases and deaths on the change in county-level voting for Donald Trump between 2016 and 2020. To account for potential confounders, we include a large number of COVID-19-related controls as well as demographic and socioeconomic variables. Moreover, we instrument the numbers of cases and deaths with the share of workers employed in meat-processing factories to sharpen our identification strategy. We find that COVID-19 cases negatively affected Trump's vote share. The estimated effect appears strongest in urban counties, in swing states, and in states that Trump won in 2016. A simple counterfactual analysis suggests that Trump would likely have won re-election if COVID-19 cases had been 5 percent lower. Our paper contributes to the literature of retrospective voting and demonstrates that voters hold leaders accountable for their (mis-)handling of negative shocks.
    Keywords: political behavior, elections, pandemic, COVID-19, pre-analysis plan
    JEL: D72 I18
    Date: 2020–11
  5. By: Dhritiman Gupta (Indian Statistical Institute, Delhi)
    Abstract: In this paper we deal with situations of collective contests between two groups over a private prize. A well known way to divide the prize within the winning group is the prize sharing rule introduced by Nitzan (1991). Since its introduction it has become a standard in the collective contests literature. We generalize this rule by introducing a restriction we call norms of competitiveness of a group. We fully characterize how group sizes interact with such norms. What we show is that the smaller group is generally aggressive, but the larger group needs to have really egalitarian norms to behave aggressively in the contest. We also take up the question of how group welfare relates to group sizes under the stated norms. We provide a complete set of conditions under which the larger group fares worse in the contest, a phenomenon called Group Size Paradox (GSP) in the literature.
    Keywords: Rent Seeking, Collective Action, Prize Sharing Rules
    JEL: D23 D71 D72 H41 C72
    Date: 2020–07
  6. By: Michalis Drouvelis (University of Birmingham); Bilal Malaeb (Institute of Global Affairs, London School of Economics and Political Science); Michael Vlassopoulos (University of Southampton); Jackline Wahba (University of Southampton)
    Abstract: Lebanon is the country with the highest density of refugees in the world, raising the question of whether the host and refugee populations can cooperate harmoniously. We conduct a lab-in-the-field experiment in Lebanon studying intra- and inter-group behavior of Syrian refugees and Lebanese nationals in a repeated public goods game without and with punishment. We randomly assign participants to Lebanese-only, Syrian-only, or mixed sessions. We find that randomly formed pairs in homogeneous sessions, on average, contribute and punish significantly more than those in mixed sessions, suggesting in-group cooperation is stronger. These patterns are driven by Lebanese participants. Further analysis indicates that behavior in mixed groups is more strongly conditioned on expectations about the partner’s cooperation than in homogeneous groups.
    Keywords: refugees, public goods game, cooperation, punishment
    JEL: D91 J5 F22
    Date: 2020–11
  7. By: Pol Campos-Mercade (Department of Economics, University of Copenhagen)
    Abstract: The bystander effect is the phenomenon that people are less likely to help others when they are in a group than when they are alone. The theoretical literature typically explains the bystander effect with the volunteer’s dilemma: if providing help is equivalent to creating a public good, then bystanders could be less likely to help in groups because they free ride on the other bystanders. This paper uses a dynamic game to experimentally test such strategic interactions as an explanation for the bystander effect. In line with the predictions of the volunteer’s dilemma, I find that bystanders help immediately when they are alone but help later and are less likely to help if they are part of a larger group. In contrast to the model’s predictions, subjects in need of help are helped earlier and are more likely to be helped in larger groups. This finding can be accounted for in an extended model that includes both altruistic and selfish bystanders. The paper concludes that the volunteer’s dilemma is a sensible way to model situations in which someone is in need of help, but it highlights the need to take heterogeneous social preferences into account.
    Keywords: volunteer’s dilemma, bystander effect, helping behavior, group size, altruism
    JEL: C92 D64 D90
    Date: 2020–11–27
  8. By: Konstantin Chatziathanasiou (University of Münster); Svenja Hippel (Unversity of Würzburg); Michael Kurschilgen (Technical University of Munich and the Max Planck Institute for Research on Collective Goods)
    Abstract: The threat of overthrow stabilizes a constitution because it disciplines the elites. This is the main rationale behind rights to resistance. In this paper, we test this conjecture experimentally. We model a society in which players can produce wealth by solving a coordination problem. Coordination is facilitated through a pre-game status-ranking. Compliance with the status hierarchy yields an efficient yet inequitable payoff distribution, in which a player’s wealth is determined by her pre-game status. Between treatments, we vary (a) whether overthrows – which reset the status-ranking via collective disobedience – are possible or not, and (b) whether voluntary redistributive transfers – which high-status players can use to appease the low-status players – are available or not. In contrast to established thinking we find that, on average, the threat of overthrow does not have a stabilizing effect as high-status players fail to provide sufficient redistribution to prevent overthrows. However, if an overthrow brings generous players into high-status positions, groups stabilize and prosper. This suggests an alternative rationale for rights to resistance.
    Keywords: Rights to resistance; civil resistance; constitutional stability; redistribution; coordination; battle of the sexes; experiment
    JEL: C72 C92 D74 H23 P48
    Date: 2020–11
  9. By: Wladislaw Mill; John Morgan
    Abstract: Does the polarization in the US lead to dysfunctional behavior? To study this question, we investigate the attitudes of supporters of Donald Trump and of Hillary Clinton towards each other and how these attitudes affect spiteful behavior. We find that both Trump and Clinton supporters have less positive attitudes towards the opposing supporters compared to coinciding supporters. More importantly, we show that significantly more wealth is destroyed if the opponent is an opposing voter. Surprisingly, this effect is mainly found for Clinton voters. This provides the first experimental evidence that the divide in the nation leads to destructive behavior.
    Keywords: Spite, Voting, Experiment, Hillary Clinton, Donald Trump
    JEL: C91 D01 D62 D72 D74
    Date: 2020–11
  10. By: Bicchieri, Cristina (University of Pennsylvania); Dimant, Eugen (University of Pennsylvania); Gächter, Simon (University of Nottingham); Nosenzo, Daniele (Aarhus University)
    Abstract: We study how individuals' compliance with norms of pro-social behavior is influenced by other actors' compliance in a novel, dynamic, and non-strategic experimental setting. We are particularly interested in the role that social proximity among peers plays in eroding or upholding norm compliance. Our results suggest that social proximity is crucial. In settings without known proximity, norm compliance erodes swiftly because participants only conform to observed norm violations of their peers while ignoring norm compliance. With known social proximity, participants conform to both types of observed behaviors, thus halting the erosion of norm compliance. Our findings stress the importance of the broader social context for norm compliance and show that, even in the absence of social sanctions, compliance can be sustained in repeated interactions, provided there is group identification, as is the case in many social encounters in natural and online environments.
    Keywords: norm compliance, social norms, social proximity
    JEL: C92 D64 D9
    Date: 2020–11
  11. By: Dominioni, Goran
    Abstract: Scholarly and policy interest in carbon pricing coalitions is growing. Existing research analyzes design features that can increase the environmental effectiveness and political resilience of coalitions centered around carbon taxes and carbon markets (i.e. explicit carbon pricing). This article is the first that analyzes the advantages and disadvantages of building carbon pricing coalitions around effective carbon pricing compared to the standard design that focuses on explicit carbon pricing. In this article, measures of effective carbon prices include carbon prices implemented via carbon taxes, carbon markets, fuel taxes, and fossil fuel subsidies reforms. The article describes four design options to build carbon pricing coalitions - three built on measures of effective carbon pricing and one that focuses exclusively on explicit carbon pricing - and benchmarks them against six criteria. The key results are that building carbon pricing coalitions around effective carbon prices has various advantages over the most common alternative discussed in the literature. These advantages include higher transparency, broader participation, higher legitimacy of the coalition, and more substantial involvement of Finance Ministries in climate change mitigation. These advantages might translate in comparable or even higher environmental effectiveness than coalitions that focuses exclusively on explicit carbon pricing.
    Date: 2020–11–20
  12. By: Tatiana Kozitsina (Babkina); Alexander Chaban; Evgeniya Lukinova; Mikhail Myagkov
    Abstract: This paper examines how the group membership fee influences the formation of groups and the cooperation rate within the socialized groups. We found that monetary transactions do not ruin the establishment of social ties and the formation of group relations.
    Date: 2020–11
  13. By: Mehic, Adrian (Department of Economics, Lund University)
    Abstract: What are the political effects of a nuclear accident? Following the 1986 Chernobyl disaster, environmentalist parties were elected to parliaments in several nations. This paper uses Chernobyl as a natural experiment creating variation in radioactive fallout exposure over Sweden. I match municipality-level data on cesium ground contamination with election results for the anti-nuclear Green Party, which was elected to parliament in 1988. After adjusting for pre-Chernobyl views on nuclear power, the results show that voters in high-fallout areas were more likely to vote for the Greens. Additionally, using the exponential decay property of radioactive isotopes, I show a persistent, long-term effect of fallout on the green vote. However, the Chernobyl-related premium in the green vote has decreased substantially since the 1980s. Detailed individual-level survey data further suggests that the results are driven by a gradually decreasing resistance to nuclear energy in fallout-affected municipalities.
    Keywords: Chernobyl; pollution; voting
    JEL: D72 P16 Q48 Q53
    Date: 2020–11–19
  14. By: Itai Arieli; Fedor Sandomirskiy; Rann Smorodinsky
    Abstract: It is well understood that the structure of a social network is critical to whether or not agents can aggregate information correctly. In this paper, we study social networks that support information aggregation when rational agents act sequentially and irrevocably. Whether or not information is aggregated depends, inter alia, on the order in which agents decide. Thus, to decouple the order and the topology, our model studies a random arrival order. Unlike the case of a fixed arrival order, in our model, the decision of an agent is unlikely to be affected by those who are far from him in the network. This observation allows us to identify a local learning requirement, a natural condition on the agent's neighborhood that guarantees that this agent makes the correct decision (with high probability) no matter how well other agents perform. Roughly speaking, the agent should belong to a multitude of mutually exclusive social circles. We illustrate the power of the local learning requirement by constructing a family of social networks that guarantee information aggregation despite that no agent is a social hub (in other words, there are no opinion leaders). Although the common wisdom of the social learning literature suggests that information aggregation is very fragile, another application of the local learning requirement demonstrates the existence of networks where learning prevails even if a substantial fraction of the agents are not involved in the learning process. On a technical level, the networks we construct rely on the theory of expander graphs, i.e., highly connected sparse graphs with a wide range of applications from pure mathematics to error-correcting codes.
    Date: 2020–11
  15. By: Autor, David (MIT); Dorn, David (University of Zurich); Hanson, Gordon H. (University of California, San Diego); Majlesi, Kaveh (Lund University)
    Abstract: Has rising import competition contributed to the polarization of U.S. politics? Analyzing multiple measures of political expression and results of congressional and presidential elections spanning the period 2000 through 2016, we find strong though not definitive evidence of an ideological realignment in trade-exposed local labor markets that commences prior to the divisive 2016 U.S. presidential election. Exploiting the exogenous component of rising import competition by China, we find that trade exposed electoral districts simultaneously exhibit growing ideological polarization in some domains—meaning expanding support for both strong-left and strong-right views—and pure rightward shifts in others. Specifically, trade-impacted commuting zones or districts saw an increasing market share for the FOX News channel (a rightward shift), stronger ideological polarization in campaign contributions (a polarized shift), and a relative rise in the likelihood of electing a Republican to Congress (a rightward shift). Trade-exposed counties with an initial majority white population became more likely to elect a GOP conservative, while trade-exposed counties with an initial majority-minority population become more likely to elect a liberal Democrat, where in both sets of counties, these gains came at the expense of moderate Democrats (a polarized shift). In presidential elections, counties with greater trade exposure shifted towards the Republican candidate (a rightward shift). These results broadly support an emerging political economy literature that connects adverse economic shocks to sharp ideological realignments that cleave along racial and ethnic lines and induce discrete shifts in political preferences and economic policy.
    Keywords: political polarization, elections, trade, labor market shocks
    JEL: D72 F14 F16 F68
    Date: 2020–11
  16. By: Jeanne PERRIER
    Abstract: This article proposes the deconstruction of the decentralization process by analyzing Palestinian regulations on Water User Associations (WUAs): contrarily, this analysis instead reveals dynamics of centralization and the concentration of power, which threatens the existing modes of local water resource management and ignores the legal pluralism at play. The Palestinian water law of 2014 and the WUA regulations of 2018 are part of a policy to decentralize water resource management. This policy was promoted on an international scale with the concept of Integrated Water Resources Management (IWRM). It consists of encouraging users to participate in the decision-making process related to irrigation management. This is materialized in a desire to create WUAs, which are supposed to increase the participation of local actors. Local associations of irrigators or farmers existed long before the implementation of decentralization policies in the 1990’s, but they had no formal presence with regard to public authorities. This formalization, however, was not necessary for them to continue their activity. The case of Palestine reflects a strong investment by state institutions in water management rather than an increase in the participation of local communities in decision-making processes. The reform of the water sector in the Palestinian territories does not occur in an institutional and legal vacuum: several rules relating to irrigation management have coexisted in the past and continue to do so today. The regulation on Palestinian WUAs institutionalizes a specific type of association and delegitimizes informal irrigator institutions that do not meet the imposed criteria. Analyzing the new regulation on the creation of WUAs and comparing the decision-making trajectories of different modes of water management reveals that the so-called decentralization process actually leans more towards a centralization of water resource management.
    Keywords: Palestine
    JEL: Q
    Date: 2020–11–26
  17. By: Sreeparna Saha (Central Queensland University); Prabal Roy Chowdhury (Indian Statistical Institute, Delhi); Jaideep Roy (University of Bath); Grazyna Wiejak-Roy (University of the West of England)
    Abstract: Imperfect institutions, particularly in developing economies, encourage bureaucratic corruption and outside interference by political parties or civic-society organisations, thereby distorting property rights for land. We characterise conditions when an industrial buyer’s optimal design to acquire land strategically involves holdout as a response to these imperfections. We propose testable hypotheses suggesting that such form of holdout increases (i) with a reduction in corruption if the current imperfections are significant, (ii) with an increase in ease of political opposition, and (iii) during elections. We also study welfare implications and discuss the relevance of the framework and the results for advanced economies.
    Keywords: Land acquisition, institutional imperfections, outside interference, buyer-induced holdout.Sector, Public Sector
    JEL: K11 O25 Q15 R52
    Date: 2020–06

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