nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2021‒10‒18
seven papers chosen by
Stan C. Weeber, McNeese State University

  1. Populists in Power By Luisa Doerr; Niklas Potrafke; Felix Roesel
  2. Voting like your betters: the bandwagon effect in the diet of the Holy Roman Empire By Volckart, Oliver
  3. Group Identity, Social Learning and Opinion Dynamics By Sebastiano Della Lena; Luca Paolo Merlino
  4. Farsighted Rationality in Hedonic Games By Demeze-Jouatsa, Ghislain-Herman; Karos, Dominik
  5. Limiting the Leader: Fairness Concerns in Team Production with Leader-Determined Monitoring By Luke Boosey; R. Mark Isaac; Abhijit Ramalingam
  6. Political Reservations as Term-Limits By Garance Genicot; Cait Brown; Nishtha Kochhar
  7. Norm Prevalence and Interdependence: Evidence from a Large-Scale Historical Survey of German speaking Villages By Radost Holler; Paul Ivo Schäfer

  1. By: Luisa Doerr; Niklas Potrafke; Felix Roesel
    Abstract: We examine how populist governments influence political culture and economic outcomes. Some Austrian communities are governed by far-right populist mayors, directly elected by a majority of voters. We exploit close elections and find that the electorate becomes more polarized under populist mayors. However, polarization is not limited to politics. A major innovation of our study is using data on team members of local football teams. Our results show that diversity in local football teams decreases when populists are in power, indicating that populists infiltrate the civic society. When it comes to economic outcomes, migration and budget transparency decrease under populist governments.
    Keywords: populism, far-right politics, partisan politics, polarization, immigration, economic policy, local government, budget transparency
    JEL: D72 P16 H72 Z18
    Date: 2021
  2. By: Volckart, Oliver
    Abstract: Scholars agree that a core feature of the political style of the Holy Roman Empire was the focus on consensus, without which policies at the level of the Empire were impossible. The present article demonstrates that the consensus on which decisions of the imperial estates was based tended to be superficial and was often in danger of breaking down. This was because the diet’s open and sequential voting procedure allowed the bandwagon effect to distort outcomes. An analysis of the votes cast in the princes’ college of the diet of 1555 shows that low-status members of the college regularly imitated the decisions of high-status voters. Reforming the system would have required accepting that the members of the college were equals – an idea no one was prepared to countenance. Hence, superficial and transitory agreements remained a systematic feature of politics at the level of the Empire.
    Keywords: bandwagon effect; voting; early modern parliamentarism; Holy Roman Empire
    JEL: H11 N43
    Date: 2021–08
  3. By: Sebastiano Della Lena; Luca Paolo Merlino
    Abstract: In this paper, we study opinion dynamics in a balanced social structure consisting of two groups. Agents learn the true state of the world naively learning from their neighbors and from an unbiased source of information. Agents want to agree with others of the same group -- in-group identity, -- but to disagree with those of the opposite group -- out-group conflict. We characterize steady state opinions, and show that agents' influence depends on their Bonacich centrality in the signed network of opinion exchange. Finally, we study the effect of group size, the weight given to unbiased information and homophily when agents in the same group are homogeneous.
    Date: 2021–10
  4. By: Demeze-Jouatsa, Ghislain-Herman (Center for Mathematical Economics, Bielefeld University); Karos, Dominik (Center for Mathematical Economics, Bielefeld University)
    Abstract: We consider a hedonic coalition formation game in which at each possible partition any new coalition can decide the probability with which to form and leave the current partition. These probabilities are commonly known so that farsighted players can decide whether or not to support a coalition's move: they know which future partition, and hence payoffs, will be reached with what probability. We show that if coalitions make mistakes with positive probability, i.e., if they choose probabilities that are always above some $\varepsilon>0$, then there is a behavior profile in which no coalition has a profitable one-shot deviation.
    Keywords: abstract games, hedonic games, farsighted stability, coalition stable equilibrium
    Date: 2021–10–05
  5. By: Luke Boosey; R. Mark Isaac; Abhijit Ramalingam
    Abstract: We use a laboratory experiment to investigate the extent to which leaders—faced with opportunistic incentives—employ monitoring to improve team production. Participants are assigned to teams, with one person appointed as the leader. The leader has the power to commit to a monitoring option, which replaces the default equal sharing rule with one that distributes team revenue in proportion to individual investments. Additionally, the leader can announce a claim to a portion of the team revenue, which is paid before shares are distributed. Theoretically, there are multiple equilibria involving monitoring and full investment, characterized by the largest claim the non-leaders are willing to cede to the leader. We appeal to fairness concerns and repeated interaction in order to provide sharper predictions that pivot around a ‘fair claim’. In the experiments, leaders are mostly unsuccessful at increasing team production as they claim too much or forgo the monitoring option too often, especially when it is costly to monitor. When there is no cost, nearly half of the leaders successfully increase team production towards full investment, by relying on constant monitoring and resisting the temptation to issue unfair claims. These results highlight the potential for opportunistic incentives to undermine efficiency-enhancing leadership, even when the leader can commit to her decisions. Key Words: leader, monitoring, team production, fairness, free-riding, experiment
    JEL: C72 C92 D20 D70 H41 M5
    Date: 2021
  6. By: Garance Genicot (Department of Economics, Georgetown University); Cait Brown (Department of Economics, University of Manchester); Nishtha Kochhar (Department of Economics, Georgetown University)
    Abstract: While political reservations aim to ensure a more equal representation for women and disadvantaged groups, they also impose effective term limits on many incumbent politicians who would otherwise have had a chance to contest elections again. By decreasing the future electoral prospects of politicians, next-period reservations may affect politicians’ present resource allocations and worsen elite capture. We first illustrate this issue using a theoretical model in which the allocation of public resources is a trade-off between the incentive of the incumbent to increase their future electoral prospects and their incentive to cater to elites. Using detailed data from India, we then estimate the differences in public resource allocations between term- and non-term-limited village presidents. We find that term-limited presidents provide relatively fewer public goods to heavily populated streets (with many potential votes), and instead allocate more public goods to the streets of the landed elite. We also find that term-limited presidents provide more private benefits to landed households. These findings appear to be driven predominately by term-limited lower-caste presidents. Our findings have important implications for the interpretation of the effects of political reservations and understanding elite capture in rural India.
    Keywords: Term-limits, political reservations, elite capture, public goods, India
    JEL: D72 H41 I38 J18 O18 P16
    Date: 2021–07–15
  7. By: Radost Holler (Bonn Graduate School of Economics); Paul Ivo Schäfer (Bonn Graduate School of Economics)
    Abstract: We use large-scale survey data of German speaking villages from the 1930's to investigate drivers of cooperation, gender, and religious norms. Through geographic cluster analysis, we show that inter-regional variation explains only little heterogeneity in norms. Villages in the same physical and institutional environment still maintain different norms. We argue that local differences in the structure of social relationships can explain intra-regional heterogeneity in norms. We focus on a community's ability to transmit and enforce norms to derive theoretical links between correlates of community social relationships and the number of norms it maintains (norm prevalence). Empirically we find that: (1) norm prevalence is positively related to three correlates of community social relationships: religiously homogeneous villages, villages that border on other villages with a different majority religion, and villages with more within-village social gatherings; (2) villages with stronger community-level social relationships are also less likely to segment their reference group for the cooperation norm to smaller social units; (3) cooperation norms make other norms more likely.
    Keywords: social norms; gender; religion; cooperation; culture; geography; communities
    JEL: Z10 N94 J16 D03 Z12
    Date: 2021–10

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