nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2021‒04‒05
seven papers chosen by
Stan C. Weeber
McNeese State University

  1. Tolerant moral judgment drives evolution of collective action By Radzvilavicius, Arunas
  2. Information Regime Changes and Path Dependence - An Experimental Analysis of Public Goods Contributions in Heterogeneous Groups By Gerlinde Fellner-Röhling; Sabine Kröger; Erika Seki
  3. Public Debt and the Political Economy of Reforms By Pierre C. Boyer; Christoph Esslinger; Brian Roberson
  4. In-group versus Out-group Preferences in Intergroup Conflict: An Experiment By Chowdhury, Subhasish; Mukherjee, Anwesha; Sheremeta, Roman
  5. Efficiency and Stability in a Process of Teams Formation By Leonardo Boncinelli; Alessio Muscillo; Paolo Pin
  6. Two Notions of Social Capital By Alpino, Matteo; Mehlum, Halvor
  7. The Formation of Global Free Trade Agreement By Akira Okada; Yasuhiro Shirata

  1. By: Radzvilavicius, Arunas (University of Sydney)
    Abstract: In public goods games, the benefit of collective action is shared among all participants, and this creates strong incentives to defect. Theoretical studies and economic experiments predict that without enforcement mechanisms, cooperation in public goods games should collapse. But human societies have repeatedly resolved collective action dilemmas through social norms and institutions. Humans condition their social behavior on the moral reputations of other individuals, and the reputations themselves reflect their past behavior. Here I show how Indirect Reciprocity mechanisms based on group reputations and group-level norms can evolve to promote collective action in public goods games. Individual reputations reflect moral judgments of social behavior within groups, according to the prevailing social norm. Only three norms previously studied as part of Indirect Reciprocity in pairwise games can sustain public goods investments, and their performance depends on how tolerant individuals are to occasional antisocial behavior within groups. When members of the society have predominantly tolerant moral views towards groups, only the norm that abstains from judgment in morally ambiguous interactions (known as ``Staying'') can sustain collective action.
    Date: 2021–01–29
  2. By: Gerlinde Fellner-Röhling; Sabine Kröger; Erika Seki
    Abstract: We experimentally investigate the path dependence of voluntary contributions in a public good game with heterogeneous agents who vary in their ability to increase the public good. More specifically, we analyze whether contribution norms observed in a first phase of the experiment under a specific information regime carry over to a second phase with a more or a less transparent regime. We find evidence of path dependence that varies by the ability of agents. Efficient contribution norms establish under common knowledge about heterogeneity and transparency of contributors' ability, and they carry over to another game with less transparency. Other contribution norms that emerged under less transparency are also initially sticky, but they eventually evolve toward an efficient norm under a more transparent information regime. Thus, path dependence may impede but does not prevent efficient contribution norms to prevail in fully transparent settings.
    Keywords: Voluntary Contribution Mechanism,Heterogeneous MPCR,Information Transparency,Sticky Behavior,Behavioral Change,Social Norms,
    JEL: C92 D04 D63 D79 D89 D91 H41 H49
    Date: 2021–03–24
  3. By: Pierre C. Boyer; Christoph Esslinger; Brian Roberson
    Abstract: We develop a two-period model of redistributive politics in which two politicians compete in an election in each period. In the first period, the politicians propose both whether to experiment with an efficient reform with uncertain benefits and choose the amount of public debt. Politicians also allocate pork-barrel spending to voters in each period. We show that allowing politicians to raise debt ensures that the reform is always implemented when the reform’s ratio of private good to public good gains exceeds a threshold, i.e. the reform generates enough private good benefits. This is not the case when the reform’s ratio of private good to public good gains is below this threshold. We also examine hard and a soft debt limits, and find that both limits reduce the political success of the reform. However, at moderate debt levels soft limits dominate hard limits with respect to equilibrium efficiency of reform provision.
    Keywords: political competition, public debt, reforms, redistributive politics, debt and spending limits
    JEL: C72 D72 D78 H60
    Date: 2021
  4. By: Chowdhury, Subhasish; Mukherjee, Anwesha; Sheremeta, Roman
    Abstract: Individuals participating in a group conflict have different preferences, e.g., maximizing their own payoff, maximizing the group’s payoff, or defeating the rivals. When such preferences are present simultaneously, it is difficult to distinctly identify the impact of those preferences on conflict. In order to separate in-group and out-group preferences, we conduct an experiment in which human in-group or out-group players are removed while keeping the game strategically similar. Our design allows us to study (i) how effort in a group conflict vary due to in-group and out-group preferences, and (ii) how the impact of these preferences vary when the two groups have explicitly different social identities. The results of our experiment show that the presence of in-groups enhances concern about individual payoffs. A further presence of out-groups moderates the concern for individual payoffs through an additional concern for own group payoffs. The negative effect of the in-group preferences and the positive effect of the out-group preferences are weaker when group members have a common social identity.
    Keywords: Group conflict; Contest; Identity; Social preferences.
    JEL: C91 C92 D72 D74
    Date: 2021–01–31
  5. By: Leonardo Boncinelli; Alessio Muscillo; Paolo Pin
    Abstract: Motivated by data on coauthorships in scientific publications, we analyze a team formation process that generalizes matching models and network formation models, allowing for overlapping teams of heterogeneous size. We apply different notions of stability: myopic team-wise stability, which extends to our setup the concept of pair-wise stability, coalitional stability, where agents are perfectly rational and able to coordinate, and stochastic stability, where agents are myopic and errors occur with vanishing probability. We find that, in many cases, coalitional stability in no way refines myopic team-wise stability, while stochastically stable states are feasible states that maximize the overall number of activities performed by teams.
    Date: 2021–03
  6. By: Alpino, Matteo; Mehlum, Halvor
    Abstract: We propose a model that reconciles two aspects of social capital: social capital as reciprocal sharing of favors within a selected group vs. social capital as trust that lubricates transactions in societies. The core assumption is that individuals have productive potentials, e.g. innovations, that can not be put at use autonomously. However, individuals can associate in a club to match productive innovator-implementor dyads among the members. For a given club, allowing one new member has the effect of a) an increased pool of innovations and b) an increased pool of potential implementors. Whether a particular member supports the expansion of the club depends on whether she expects to be an implementor or an innovator. When expansion of membership is decided by vote, both small exclusive clubs and open clubs encompassing the whole society can emerge. The outcome depends both on the voting protocol, on the distribution of innovator and implementor skills, and on the maximal potential club size. Moreover, identical environments may generate multiple equilibrium club sizes. In which of these the society ends up depends on the initial conditions and on the voting protocol.
    Keywords: Social capital, matching, voting in clubs.
    JEL: A13 C78 D71
    Date: 2021–02–04
  7. By: Akira Okada; Yasuhiro Shirata
    Abstract: We investigate the formation of Free Trade Agreement (FTA) in a competing importers framework with $n$ countries. We show that (i) FTA formation causes a negative externality to non-participants, (ii) a non-participant is willing to join an FTA, and (iii) new participation may decrease the welfare of incumbent participants. A unique subgame perfect equilibrium of a sequential FTA formation game does not achieve global free trade under an open-access rule where a new applicant needs consent of members for accession, currently employed by many open regionalism agreements including APEC. We further show that global FTA is a unique subgame perfect equilibrium under an open-access rule without consent.
    Date: 2021–03

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