nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2023‒07‒24
six papers chosen by
Stan C. Weeber, McNeese State University

  1. Approval vs. Participation Quorums By Dmitriy Vorobyev; Azamat Valei; Andrei Matveenko
  2. The Political Effects of the 1918 Influenza Pandemic in Weimar Germany By Stefan Bauernschuster; Matthias Blum; Erik Hornung; Christoph Koenig
  3. The “weight” of territorial issues: Evidence from Catalonia, Scotland, and Northern Ireland By Laia Balcells; Lesley-Ann Daniels; Daniel Alexander Kuo
  4. Voting with Interdependent Values: The Condorcet Winner By Alex Gershkov; Andreas Kleiner; Benny Moldovanu; Xianwen Shi
  5. When Credit Turns Political: Evidence from the Spanish Financial Crisis By Pia Hüttl; Simon Baumgartner
  6. Variable Payment Schemes and Productivity: Do Individual-Based Schemes Really Have a Stronger Influence than Collective Ones? By Jirjahn, Uwe; Mohrenweiser, Jens

  1. By: Dmitriy Vorobyev; Azamat Valei; Andrei Matveenko
    Abstract: Using a pivotal costly voting model of elections between a status quo and a challenger alternative, we compare participation and approval quorum requirements in terms of how they shape voter incentives to cast votes, and how they ultimately impact voter turnout, election outcomes, and welfare. We first show that approval and participation quorum restrictions of equal strictness result in at most two types of stable non-trivial equilibria: “abstention, ” in which status quo supporters strategically abstain from voting, and “coordination, ” in which they vote with positive probability. While abstention equilibria are always identical in the two quorum settings, coordination equilibria may differ, but only when the cost of voting is sufficiently low and status quo support among voters is neither extremely high or low, nor is it close to the degree of support for the challenger. We show that, in those cases, the difference in the outcomes of interest between approval and participation quorum settings is quantitatively small. The main difference between the two settings therefore arises from the fact that, under an approval quorum, coordination equilibrium exists for a narrower range of status quo support levels than under a participation quorum. We discuss the implications of these findings for designing optimal quorum restrictions, suggesting that choosing an approval quorum over a participation quorum and setting its strictness close to half of the number of voters, or setting no quorum restrictions at all, are often welfare maximizing choices.
    Keywords: voting, participation quorum, approval quorum
    JEL: D71 D72
    Date: 2023–07
  2. By: Stefan Bauernschuster (University of Passau); Matthias Blum (German Medical Association); Erik Hornung (University of Cologne); Christoph Koenig (University of Rome Tor Vergata)
    Abstract: How do health crises affect election results? We combine a panel of election results from 1893-1933 with spatial heterogeneity in excess mortality due to the 1918 Influenza to assess the pandemic's effect on voting behavior across German constituencies. Applying a dynamic differences-in-differences approach, we find that areas with higher influenza mortality saw a lasting shift towards left-wing parties. We argue that pandemic intensity increased the salience of public health policy, prompting voters to reward parties signaling competence in health issues. Alternative explanations such as pandemic-induced economic hardship, punishment of incumbents for inadequate policy responses, or polarization of the electorate towards more extremist parties are not supported by our findings.
    Keywords: Pandemics, Elections, Health, Voting behavior, Issue salience, Issue ownership, Weimar Republic
    JEL: D72 I18 N34 H51
    Date: 2023–06
  3. By: Laia Balcells (Georgetown Universit); Lesley-Ann Daniels (Institute Barcelona d’Estudis Internacionals (IBEI)); Daniel Alexander Kuo (University of Oxford (DPIR and Christ Church))
    Abstract: Territorial debates complicate the politics of the affected regions, as parties must decide whether to compete on a territorial dimension alongside others, such as redistribution, that have longstanding importance. Yet, empirical evidence is scarce regarding how much voters actually weigh territorial issues against others, and on which issues voters most reward congruent (like-minded) candidates. We theorize that in contexts when such issues are salient, they have a greater weight relative to others due to their identity-oriented nature. We present evidence from a conjoint experiment embedded in simultaneously fielded surveys in three European regions with active territorial disputes: Catalonia, Scotland, and Northern Ireland. We find that individuals’ preferences on the territorial issue matter more than other issues for candidate choice: the reward (punishment) of congruent (incongruent) candidates is greater, and individuals are less prepared to concede on this issue. Our results have broader comparative implications for political competition in multidimensional spaces where territorial disputes are present.
    Keywords: secessionism, voting behavior, conjoint experiment, territorial disputes, substate nationalism, United Kingdom, Spain
    Date: 2023–06
  4. By: Alex Gershkov (Department of Economics, Hebrew University Jerusalem and School of Economics, University of Surrey); Andreas Kleiner (Department of Economics, Arizona State University); Benny Moldovanu (Department of Economics, University of Bonn); Xianwen Shi (Department of Economics, University of Toronto)
    Abstract: We generalize the standard, private values voting model with single-peaked preferences and incomplete information by introducing interdependent preferences. Our main results show how standard mechanisms that are outcome-equivalent and implement the Condorcet winner under complete information or under private values yield starkly different outcomes if values are interdependent. We also propose a new notion of Condorcet winner under incomplete information and interdependent preferences, and discuss its implementation. The new phenomena in this paper arise because diffrent voting rules (including dynamic ones) induce different processes of information aggregation and learning.
    Date: 2023–06
  5. By: Pia Hüttl; Simon Baumgartner
    Abstract: This paper provides causal evidence on the effect of credit crunches on political polarization. We combine data on bank-firm connections and electoral outcomes at the city-level during the 2008-2014 Spanish Financial Crisis. First, we show that firms in a relationship with weak banks experience a reduction in their loan supply and employment growth. Next, we estimate the effects of unemployment on voting behaviour. We construct an instrument for unemployment based on the city-level exposure to foreign weak banks. We find that a one standard deviation increase in instrumented unemployment translates into a 7 percentage increase in the polarisation of voters.
    Keywords: Polarization, financial crisis, instrumental variable strategy, Spanish elections, credit supply shock, real effects, unemployment risk
    JEL: G01 P16 D72 D43
    Date: 2023
  6. By: Jirjahn, Uwe (University of Trier); Mohrenweiser, Jens (Bournemouth University)
    Abstract: While studies on individual-based and collective payment schemes are largely unconnected, there appears to be a widely held belief that individual-based schemes have a stronger influence on firm performance than collective ones. This also applies to an index of best management practices developed by Bloom and Van Reenen (2007). The index assigns the highest weight to individual-based performance pay, a medium weight to group-based performance pay and a low weight to profit sharing. This weighting is obviously driven by the implicit assumption that collective payment schemes suffer from a free-rider problem so they have a less strong influence on productivity than individual-based schemes. We show that this assumption is questionable from both a theoretical and an empirical point of view. Using the German Management and Organizational Practices Survey, one of the datasets initiated by Bloom and Van Reenen, we show that individual-based performance pay does not outperform group-based performance pay or profit sharing. The finding also holds when accounting for possible interactions among the payment schemes and considering the moderating roles of firm size, employee representation, and innovativeness. Our results suggest that researchers should be careful with respect to the assumptions and subjective priors guiding their empirical analyses.
    Keywords: management practices, free-rider problem, individual performance pay, group performance pay, profit sharing
    JEL: J33 M52 M50
    Date: 2023–06

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