nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2022‒01‒24
seven papers chosen by
Stan C. Weeber, McNeese State University

  1. Individual and Collective Information Acquisition: An Experimental Study By Pëllumb Reshidi; Alessandro Lizzeri; Leeat Yariv; Jimmy Chan; Wing Suen
  2. Corrupted Votes and Rule Compliance By Arno Apffelstaedt; Jana Freundt
  3. Internal versus External Rent-Seeking with In-Group Inequality and Public Good Provision By Bakshi, Dripto; Dasgupta, Indraneel
  4. Opening Heaven's Door: Public Opinion and Congressional Votes on the 1965 Immigration Act By Facchini, Giovanni; Hatton, Timothy J.; Steinhardt, Max F.
  5. Cooperation and Retaliation in Legislative Bargaining By Agustín Casas; Martín Gonzalez-Eiras
  6. Legislative bargaining with private information: A comparison of majority and unanimity rule By Piazolo, David; Vanberg, Christoph
  7. Other-regarding preferences and pro-environmental behaviour: an interdisciplinary review of experimental studies By Heinz, Nicolai; Koessler, Ann Kathrin

  1. By: Pëllumb Reshidi; Alessandro Lizzeri; Leeat Yariv; Jimmy Chan; Wing Suen
    Abstract: Many committees—juries, political task forces, etc.—spend time gathering costly information before reaching a decision. We report results from lab experiments focused on such information-collection processes. We consider decisions governed by individuals and groups and compare how voting rules affect outcomes. We also contrast static information collection, as in classical hypothesis testing, with dynamic collection, as in sequential hypothesis testing. Several insights emerge. Static information collection is excessive, and sequential information collection is non-stationary, producing declining decision accuracies over time. Furthermore, groups using majority rule yield especially hasty and inaccurate decisions. Nonetheless, sequential information collection is welfare enhancing relative to static collection, particularly when unanimous rules are used.
    Keywords: information acquisition, collective choice, experiments
    JEL: C91 C92 D72 D83 D87
    Date: 2021
  2. By: Arno Apffelstaedt (University of Cologne and ECONtribute); Jana Freundt (University of Fribourg, Department of Economics and University of Pennsylvania, School of Arts and Sciences)
    Abstract: Allegations of voter fraud accompany many real-world elections. How does electoral malpractice affect the acceptance of elected institutions? Using an online experiment in which people distribute income according to majority-elected rules, we show that those who experience vote buying or voter disenfranchisement during the election are subsequently less willing to comply with the rule. On average, the detrimental impact of electoral malpractice on compliance is of the same magnitude as removing the election altogether and imposing a rule exogenously. Our experiment shows how corrupting democratic processes can impact economic behavior and sheds light on the behavioral mechanisms underlying "rule legitimacy".
    Keywords: rule compliance, endogenous institutions, corruption, procedural fairness, legitimacy
    JEL: D02 D72 D91 C92
    Date: 2022–01
  3. By: Bakshi, Dripto (Indian Statistical Institute); Dasgupta, Indraneel (Indian Statistical Institute)
    Abstract: We examine how inequality in the endowment of secure wealth, mediated through voluntary public good provision, affects rent-seeking within and between groups. We model a scenario where two communities, each internally differentiated into rich, intermediate and poor segments, contest one another for the division of some rent. Any rent accruing to a community is distributed internally according to another, simultaneous, contest. Individuals first decide how much of their endowments to allocate to the two contests. They subsequently decide how to allocate their remaining wealth and rental income between private consumption and a community-specific public good. We find that greater endowment inequality among the non-rich, both within and across communities, aggravates inter-group rent-seeking. Within-group rent-seeking may rise as well. In contrast, higher such inequality between the rich and others within a community depresses between-group conflict. Within-group conflict may fall as well. The ‘paradox of power’ is violated for both kinds of conflict – better-endowed individuals are more successful in the internal conflict, while better-endowed groups are more successful in the external conflict.
    Keywords: internal v. external rent-seeking, ethnic conflict, intra-group inequality, inter-group inequality, public good provision
    JEL: D72 D74
    Date: 2021–11
  4. By: Facchini, Giovanni (University of Nottingham); Hatton, Timothy J. (University of Essex); Steinhardt, Max F. (Free University of Berlin)
    Abstract: The Immigration Act of 1965 marked a dramatic shift in policy and one with major long term consequences for the volume and composition of immigration to the United States. Here we explore the political economy of a reform that has been overshadowed by the Civil Rights and Great Society programs. We find that public opinion was against expanding immigration, but it was more favorable to abolishing the old country of origin quota system. Votes in the House of Representatives and the Senate were more closely linked to opinion on abolishing the country of origin quotas than to public opinion on the volume of immigration. Support for immigration reform initially followed in the slipstream of civil rights legislation both among members of Congress and their constituents. The final House vote, on a more restrictive version of the bill, was instead more detached from state-level public opinion on civil rights and gained more support from those whose constituents wanted to see immigration decreased.
    Keywords: US immigration policy, 1965 Immigration Act, congressional voting
    JEL: N12 F22 J68
    Date: 2021–12
  5. By: Agustín Casas (CUNEF); Martín Gonzalez-Eiras (University of Copenhagen)
    Abstract: We study a legislative-bargaining divide-the-pie game in which some legislators have the ability to a ect the amount of resources to be distributed (positively or negatively). If included in the winning coalition, these legislators cooperate and increase the size of the pie. If excluded, they retaliate and decrease it. Cooperation and retaliation produce significant changes in the equilibrium allocation relative to Baron and Ferejohn (1989): The bargaining position of cooperating and retaliating legislators improves, and thus they are more likely to be included in the winning coalition (which may be larger-than-minimum). Some of these legislators may be excluded from the winning coalition, creating inefficient output losses. Moreover, output losses increase with legislators' patience.
    Keywords: Legislative bargaining, non-minimum winning coalitions, spillovers,allocative efficiency.
    JEL: D72 D74 D61
    Date: 2021–11
  6. By: Piazolo, David; Vanberg, Christoph
    Abstract: We present a three-person, two-period bargaining game with private information. A single proposer is seeking to secure agreement to a proposal under either majority or unanimity rule. Two responders have privately known "breakdown values" which determine their payoff in case of "breakdown". Breakdown occurs with some probability if the first proposal fails and with certainty if the second proposal fails. We characterize Bayesian Equilibria in Sequentially Weakly Undominated Strategies. Our central result is that responders have a signaling incentive to vote "no" on the first proposal under unanimity rule, whereas no such incentive exists under majority rule. The reason is that being perceived as a "high breakdown value type" is advantageous under unanimity rule, but disadvantageous under majority rule. As a consequence, responders are "more expensive" under unanimity rule and disagreement is more likely. These results confirm intuitions that have been stated informally before and in addition yield deeper insights into the underlying incentives and what they imply for optimal behavior in bargaining with private information.
    Date: 2022–01–13
  7. By: Heinz, Nicolai; Koessler, Ann Kathrin
    Abstract: Pro-environmental behaviour (PEB) is often promoted by reinforcing or highlighting own benefits. However, considering that actors also care about the outcomes for others (i.e. they hold other-regarding preferences), PEB may also be encouraged by addressing these other-regarding preferences. In this paper, we review the results from social science experiments where interventions addressing other-regarding preferences were used to promote PEB. Based on our synthesis, we conclude that addressing other-regarding preferences can be effective in promoting (various types of) PEB in some, but not in all instances. Whether an intervention was effective depended inter alia on the pre-established preferences, cost structures and the perceived cooperation of others. Effective interventions included the provision of information on behavioural consequences, perspective-taking, direct appeals, framing and re-categorization. The interventions worked by activating other-regarding preferences, raising awareness about adverse consequences, evoking empathic concern and expanding the moral circle. We propose to take these findings as an impulse to examine policy instruments and institutions in terms of whether they activate and strengthen other-regarding preferences, thereby enabling collective engagement in PEB.
    Keywords: empathic concern; experiments; other-regarding preferences; preference activation; pro-environmental behaviour; review
    JEL: D90 Q56 Y80
    Date: 2021–06–01

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