nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2021‒05‒24
fourteen papers chosen by
Stan C. Weeber, McNeese State University

  1. Collective Information Acquisition By Eilat, Ran; Eliaz, Kfir
  2. The Political Economics of Non-democracy By Egorov, Georgy; Sonin, Konstantin
  3. The Best at the Top? Candidate Ranking Strategies Under Closed List Proportional Representation By Benoit S Y Crutzen; Hideo Konishi; Nicolas Sahuguet
  4. Electoral Cycles in Macroeconomic Forecasts By Davide Cipullo; André Reslow
  5. Abstentions and Social Networks in Congress By Battaglini, Marco; Leone Sciabolazza, Valerio; Patacchini, Eleonora
  6. Quantifying Vote Trading Through Network Reciprocity By Guerrero, Omar; Matter, Ulrich
  7. The Political Effects of Immigration: Culture or Economics? By Alesina, Alberto F; Tabellini, Marco
  8. Sequential Vote Buying By Ying Chen; Jan Zapal
  9. Anger and Strategic Behavior: A Level-k Analysis By Castagnetti, Alessandro; Proto, Eugenio
  10. Leaders, Factions and Electoral Success By Benoit S Y Crutzen; Sabine Flamand
  11. Developing Air and Land Control at Toronto’s Airport: How Do Cities Use Their Fiscal Space? By Nick Lombard
  12. Institutional Change and Institutional Persistence By Acemoglu, Daron; Egorov, Georgy; Sonin, Konstantin
  13. Competitive Gerrymandering and the Popular Vote By Bierbrauer, Felix; Polborn, Mattias
  14. Political Cleavages and Social Inequalities in Algeria, Iraq, and Turkey, 1990-2019 By Lydia Assouad; Amory Gethin; Thomas Piketty; Juliet-Nil Uraz

  1. By: Eilat, Ran; Eliaz, Kfir
    Abstract: We consider the problem faced by a group of players who need to collectively decide what public signal to acquire, and how to share its cost, before voting on whether to take some action, when each player is privately informed about his state-dependent payoffs from the action. We characterize the welfare maximizing mechanism for information acquisition taking into account the subsequent voting game. We identify novel distortions that arise from the information asymmetry and from the fact that after observing the signal realization, the players vote independently of their actions in the mechanism.
    Keywords: collective decision-making; Information-design; Mechanism-Design; Public Good Provision; rational inattention
    Date: 2020–09
  2. By: Egorov, Georgy; Sonin, Konstantin
    Abstract: We survey recent theoretical and empirical literature on political economy of non-democracies. Dictators face many challenges to their rule: internal, such as palace coups or breakdown of their support coalition, or external, such as mass protests or revolutions. We analyze strategic decisions made by dictators --- hiring political loyalists to positions that require competence, restricting media freedom at the cost of sacrificing bureaucratic efficiency, running a propaganda campaign, organizing electoral fraud, purging associates and opponents, and repressing citizens --- as driven by the desire to maximize the regime's chances of staying in power. We argue that the key to understanding the functioning and ultimately the fate of a nondemocratic regime is the information flows within the regime, and the institutions that govern these information flows.
    Keywords: bureaucracy; Censorship; coup d'etat; Dictatorship; electoral fraud; media freedom; nondemocratic politics; Propaganda; repressions; Revolutions
    JEL: C73 D72 D74 D82 D83 P16
    Date: 2020–10
  3. By: Benoit S Y Crutzen (Erasmus School of Economics); Hideo Konishi (Boston College); Nicolas Sahuguet (HEC Montreal)
    Abstract: Under closed-list proportional representation, a party's electoral list determines the order in which legislative seats are allocated to candidates. When candidates differ in their ability, parties face a trade-off between competence and incentives. Ranking candidates in decreasing order of competence ensures that elected politicians are most competent. Yet, party lists create incentives for candidates that may push parties not to rank candidates in decreasing competence order. We examine this trade-off in a game-theoretical model in which parties rank their candidate on a list, candidates choose their campaign effort, and the election is a team contest for multiple prizes. We show that the trade-off between competence and incentives depends on candidatesÂ’' objective and the electoral environment. In particular, parties rank candidates in decreasing order of competence if candidates value enough post-electoral high offices or media coverage focuses on candidates at the top of the list.
    JEL: D72 C72
    Date: 2021–05–10
  4. By: Davide Cipullo; André Reslow
    Abstract: This paper documents the existence of Political Forecast Cycles. In a theoretical model of political selection, we show that governments release overly optimistic GDP growth forecasts ahead of elections to increase the reelection probability. The bias arises from lack of commitment if voters are rational and from manipulation of voters’ beliefs if they do not expect the incumbent to be biased. Using high-frequency forecaster-level data from the United States, the United Kingdom, and Sweden, we document that governments overestimate short-term GDP growth by 10 to 13 percent during campaign periods.
    Keywords: electoral cycles, political selection, voting, macroeconomic forecasting
    JEL: D72 D82 E37 H68
    Date: 2021
  5. By: Battaglini, Marco; Leone Sciabolazza, Valerio; Patacchini, Eleonora
    Abstract: We study the extent to which personal connections among legislators influence abstentions in the U.S. Congress. Our analysis is conducted by observing representatives' abstention for the universe of roll call votes held on bills in the 109th-113th Congresses. Our results show that a legislator's propensity to abstain increases when the majority of his or her alumni connections abstains, even after controlling for other well-known predictors of abstention choices and a vast set of fixed effects. We further reveal that a legislator is more prone to abstain than to take sides when the demands from personal connections conflict with those of the legislator's party.
    Keywords: abstention; alumni networks; Social Networks; U.S. Congress
    JEL: D72 D85
    Date: 2020–09
  6. By: Guerrero, Omar; Matter, Ulrich
    Abstract: Building on the concept of reciprocity in directed weighted networks, we propose a framework to study legislative vote trading. We first discuss the conditions to quantify vote trading empirically. We then illustrate how a simple empirical framework—complementary to existing approaches—can facilitate the discovery and measurement of vote trading in roll-call data. The application of the suggested procedure preserves the micro-structure of trades between individual legislators, shedding light on, so far, unstudied aspects of vote trading. Validation is provided via Monte Carlo simulation of the legislative process (with and without vote trading). Applications to two major studies in the field provide richer, yet consistent evidence on vote trading in US politics.
    Keywords: Vote trading, roll-call voting, networks, reciprocity, US Congress
    JEL: D72 D85
    Date: 2021–06
  7. By: Alesina, Alberto F; Tabellini, Marco
    Abstract: We review the growing literature on the political effects of immigration. After a brief summary of the economics of immigration, we turn to the main focus of the paper: how immigrants influence electoral outcomes in receiving countries, and why. We start from the "standard" view that immigration triggers political backlash and raises support for nativist, anti-immigrant political parties. We present evidence from a variety of studies that the causes of natives' political discontent are unlikely to have (solely) economic roots, but are instead more tightly linked to cultural and social concerns. Next, we discuss works that paint a more nuanced picture of the effects of immigration, which, in some cases, can move natives' preferences in a more liberal direction. We also consider the factors that can explain a seemingly puzzling empirical regularity: the anti-immigration rhetoric has become a banner of right wing parties. We conclude by outlining what, to us, are promising avenues for future research.
    JEL: D72 J11 J15 J61 Z1
    Date: 2020–11
  8. By: Ying Chen; Jan Zapal
    Abstract: To enact a policy, a leader needs votes from committee members with heterogeneous opposition intensities. She sequentially offers transfers in exchange for votes. The transfers are either promises paid only if the policy passes or paid up front. With transfer promises, a vote costs nearly zero. With up-front payments, a vote can cost significantly more than zero, but the leader is better off with up-front payments. The leader does not necessarily buy the votes of those least opposed. The opposition structure most challenging to the leader involves either a homogeneous committee or a committee with two homogenous groups. Our results provide an explanation for several empirical regularities: lobbying of strongly opposed legislators, the Tullock Paradox and expansion of the whip system in the U.S. House concurrent with ideological homogenization of parties. We also discuss several extensions including private histories and simultaneous offers.
    Keywords: vote buying; legislative bargaining; coalition building; endogenous sequencing; transfer promise; up-front payment; contracting with externalities;
    JEL: C78 D72 P16
    Date: 2021–04
  9. By: Castagnetti, Alessandro; Proto, Eugenio
    Abstract: Anger is an important driver in shaping economic activities, particularly in instances that involve strategic interactions between individuals. Here we test whether anger impairs the capacity to think strategically, and we analyze the implications of our result on bargaining and cooperation games. Accordingly, with a preregistered experiment (Experiment 1), we externally induce anger to a subgroup of subjects following a standard procedure that we verify by using a novel method of text analysis. We show that anger can impair the capacity to think strategically in a beauty contest game. Angry subjects choose numbers further away from the Nash equilibrium, and earn significantly lower profits. A structural analysis estimates that there is an increase in the share of level-zero players in the treated group compared to the control group. Furthermore, with a second preregistered experiment (Experiment 2), we show that this effect is not common to all negative emotions. Sad subjects do not play significantly further away from the Nash equilibrium than the control group in the same beauty contest game of Experiment 1, and sadness does not lead to more level-zero play.
    Keywords: anger; beauty-contest; induced emotions; Strategic Interactions
    JEL: C92 D90 D91
    Date: 2020–09
  10. By: Benoit S Y Crutzen (Erasmus Universiteit Rotterdam); Sabine Flamand (Universitat Rovira I Virgili)
    Abstract: We develop a formal model of the internal game between the leader and the factions of a party, to study the effect of party leadership on electoral success. Factions are of interest or of principle. The probability of winning an election is increasing in the leader's charisma, but also in party unity and coherence and in the factions' total contributions to party work and electoral efforts. To push factions to contribute, the leader offers both types of factions their favorite rewards in exchange for their contributions. We show that party unity and factions' total contributions are not necessarily increasing in the leader's charisma and ideological proximity to factions. Further, we show that factions of interest constraint the party's electoral strategy less than factions of principle. In particular, factions of interest always contribute more than factions of principle, are less of an obstacle towards achieving party unity, and offer the party more freedom in its choice of the ideological location and charisma of the party leader.
    JEL: D72 C72
    Date: 2021–05–11
  11. By: Nick Lombard (University of Toronto)
    Abstract: Today, Toronto’s Lester B. Pearson International Airport is the busiest in the country and anchors the second-largest employment zone in Canada. However, the growth of the airport and the surrounding region were not always in synch. Rather, from its approval in 1937 the airport and the surrounding region found themselves frequently at odds over land use planning and airport expansions. Overlapping federal, provincial, and municipal control over various aspects of airport and land use planning made the airport project seem rife with conflict. However, this paper finds that this jurisdictional and territorial overlap led to innovative governance around the airport. Despite the absence of legislated relationships between the various bodies responsible for governing airport expansion and surrounding land use, local officials in present-day Mississauga, Toronto, and Brampton, along with their on-the-ground counterparts from Ottawa and the province of Ontario, would construct a durable framework for informal cooperation that would enable the complementary planning of airport and surrounding land uses. This paper examines three key moments of airport expansion and adaptation with local planners: the 1953 Malton Airport Zoning ordinance, the 1958 jetport plan, and the 1968 expansion plan. It argues that at each of these points, governmental and non-governmental actors worked to construct a flexible framework through which information sharing and complementary planning could be carried out without formal or legislative approval. The result, this paper argues, was a robust infrastructure and land use planning coalition that continues today.
    Keywords: airports, land use planning, infrastructure, intergovernmental relations
    JEL: H10 H77 R58
    Date: 2021–05
  12. By: Acemoglu, Daron; Egorov, Georgy; Sonin, Konstantin
    Abstract: In this essay, we provide a simple conceptual framework to elucidate the forces that lead to institutional persistence and change. Our framework is based on a dynamic game between different groups, who care both about current policies and institutions and future policies, which are themselves determined by current institutional choices, and clarifies the forces that lead to the most extreme form of institutional persistence ("institutional stasis") and the potential drivers of institutional change. We further study the strategic stability of institutions, which arises when institutions persist because of fear of subsequent, less beneficial changes that would follow initial reforms. More importantly, we emphasize that, despite the popularity of ideas based on institutional stasis in the economics and political science literatures, most institutions are in a constant state of flux, but their trajectory may still be shaped by past institutional choices, thus exhibiting "path-dependent change", so that initial conditions determine both the subsequent trajectories of institutions and how they respond to shocks. We conclude the essay by discussing how institutions can be designed to bolster stability, the relationship between social mobility and institutions, and the interplay between culture and institutions.
    Keywords: conflict; Constitutions; democracy; Institutional Change; institutions; Persistence; stability
    JEL: C73 D72 D74 N10 N40 P16
    Date: 2020–09
  13. By: Bierbrauer, Felix; Polborn, Mattias
    Abstract: Gerrymandering undermines representative democracy by creating many uncompetitive legislative districts, and generating the very real possibility that a party that wins a clear majority of the popular vote does not win a majority of districts. We present a new approach to the determination of electoral districts, taking a design perspective. Specifically, we develop a redistricting game between two parties who both seek an advantage in upcoming elections, and show that we can achieve two desirable properties: First, the overall election outcome corresponds to the popular vote. Second, most districts are competitive.
    Keywords: Gerrymandering; legislative elections; redistricting
    JEL: C72 D72
    Date: 2020–10
  14. By: Lydia Assouad (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, WIL - World Inequality Lab); Amory Gethin (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, WIL - World Inequality Lab); Thomas Piketty (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, WIL - World Inequality Lab); Juliet-Nil Uraz (EUI - European University Institute)
    Abstract: This paper draws on political attitudes surveys to document the evolution of political cleavages in light of inequality dynamics in Algeria (2002-2018), Iraq (2005-2018), and Turkey (1991-2018). We investigate how social divides and ethno-religious conflicts shape voting behaviors in these three countries through their interaction with the voting system and the structure of inequalities. Our findings suggest that identity-based voting remains highly interconnected with social disparities and does not offer extensive explanatory power on its own, except in the extreme case of the Iraqi sectarian political system. Socioeconomic factors play a differentiated role depending on the historical and institutional context and have increasingly been at the heart of popular mobilizations outside of the electoral arena.
    Date: 2021–03

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