nep-cdm New Economics Papers
on Collective Decision-Making
Issue of 2023‒10‒09
nine papers chosen by
Stan C. Weeber, McNeese State University

  1. Information Aggregation with Delegation of Votes By Dhillon, Amrita; Kotsialou, Grammateia; Ravindran, Dilip; Xefteris, Dimitrios
  2. Voting Choice By Andrey Malenko; Nadya Malenko
  3. The Politics of Public Service Reform: Experimental Evidence from Liberia By Wayne Aaron Sandholtz
  4. Juries and Information Aggregation in Dynamic Environments By Esteban Colla-De-Robertis
  5. The Political Effects of the 1918 Influenza Pandemic in Weimar Germany By Bauernschuster, Stefan; Blum, Matthias; Hornung, Erik; Koenig, Christoph
  6. Issue salience and women’s electoral performance: Theory and evidence from Google trends By Michela Cella; Elena Manzoni; Francesco Scervini
  7. Dishonesty as a collective‐risk social dilemma By Shuguang Jiang; Marie Claire Villeval
  8. Partisan Alignment, Insurgency and Public Safety: Evidence from the Indian Red-corridor By Ashani Amarasinghe; Pushkar Maitra; Yuchen Zhongs
  9. Minimum Wages and Voting: Assessing the Political Returns to Redistribution outside the Tax System By Huet-Vaughn, Emiliano

  1. By: Dhillon, Amrita (King’s College, London); Kotsialou, Grammateia (London School of Economics); Ravindran, Dilip (Humboldt University of Berlin); Xefteris, Dimitrios (University of Cyprus)
    Abstract: Liquid democracy is a system that combines aspects of direct democracy and representative democracy by allowing voters to either vote directly themselves, or delegate their votes to others. In this paper we study the information aggregation properties of liquid democracy in a setting with heterogeneously informed truth-seeking voters—who want the election outcome to match an underlying state of the world—and partisan voters. We establish that liquid democracy admits equilibria which improve welfare and information aggregation over direct and representative democracy when voters’ preferences and information precisions are publicly or privately known. Liquid democracy also admits equilibria which do worse than the other two systems. We discuss features of efficient and inefficient equilibria and provide conditions under which voters can more easily coordinate on the efficient equilibria in liquid democracy than the other two systems.
    Keywords: Liquid democracy, delegation, strategic voting, information aggregation, Condorcet Jury theorem JEL Classification: D72
    Date: 2023
  2. By: Andrey Malenko; Nadya Malenko
    Abstract: Traditionally, fund managers cast votes on behalf of investors whose capital they manage. Recently, this system has come under intense debate given the growing concentration of voting power among a few asset managers and disagreements over environmental and social issues. Major fund managers now offer their investors a choice: delegate their votes to the fund or cast votes themselves ("voting choice"). This paper develops a theory of delegation of voting rights and studies the implications of voting choice for investor welfare. If the reason for offering voting choice is that investors have different preferences, then investors may retain their voting rights excessively, inefficiently prioritizing their private preferences over information. As a result, investors on aggregate are not always better off if voting choice is offered to them. In contrast, if the reason for offering voting choice is that investors have information about the proposal that the fund manager does not have, then voting choice is generally efficient, increasing investor welfare. However, if information collection is costly, voting choice may lead to coordination failure, resulting in less informed voting outcomes.
    JEL: D74 G34
    Date: 2023–08
  3. By: Wayne Aaron Sandholtz
    Abstract: This paper provides experimental evidence on the electoral effect of a large education reform in a developing democracy. Despite significantly improving school quality, the policy reduced the incumbent party’s presidential vote share by 3 percentage points (10%). This does not imply that voters fundamentally oppose service improvements: household surveys showed strong support for the policy, and variation in school-pair-level treatment effects shows that the more the policy raised test scores, the more it increased incumbent vote share. Instead, the negative average electoral effect was driven by opposition from teachers. The policy reduced teachers’ job satisfaction, their support for the incumbent government, and their political engagement. The more the policy reduced teacher political engagement, the more it reduced incumbent vote share. Counterfactual simulations suggest that relatively small improvements in effectiveness and/or teacher engagement could have made the policy a net vote winner. This paper empirically demonstrates the importance of political feasibility in the design of public service reforms.
    Keywords: electoral returns, policy feedback, public service delivery, policy experimentation, education, political economy, elections, randomized controlled trial, Liberia, information
    JEL: O10 C93 D72 P16 H41 I25
    Date: 2023
  4. By: Esteban Colla-De-Robertis (Universidad Panamericana)
    Abstract: We study information aggregation through voting in dynamic environments. We show that the voting rule under which an informative vote is a Nash equilibrium entails a time-varying quota, which suggests that efficient information aggregation requires the use of time-varying voting rules. We also show that a time-invariant simple majority quota rule is asymptotically efficient, that is when the size of the committee tends to infinity. We discuss possible applications to the monitoring and managing of natural resources and the environment.
    Keywords: Condorcet Jury Theorem - Information aggregation - Partially Observable Markov Decision Processes - Management of natural resources - Environment
    Date: 2023–09
  5. By: Bauernschuster, Stefan (University of Passau); Blum, Matthias (German Medical Association); Hornung, Erik (University of Cologne); Koenig, Christoph (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 Classification: D72, I18, N34, H51
    Date: 2023
  6. By: Michela Cella; Elena Manzoni; Francesco Scervini
    Abstract: In this paper we study, theoretically and empirically, how the belief that the gender of politicians affects their competence on a range of issues may influence electoral outcomes depending on the salience of these issues. We propose a model of issue-specific gender bias in elections which can describe both the presence of a real comparative advantage (‘kernel-of-truth’ case, or stereotype) and the case of pure prejudice. We show that the bias influences electoral results but it can be partially reversed by successful information transmission during the electoral campaign. We then empirically investigate the relation between issue salience and women’s performance, using US data on House and Senate elections. Estimates of issue salience are obtained using Google Trends data. Exploiting the longitudinal dimension of the dataset at district level and an IV strategy to rule out possible endogeneity, we show a positive correlation between the salience of feminine issues and women’s electoral outcomes. The average effect is sizable with respect to the share of votes for women candidates, even if not large enough, on average, to increase the probability that women candidates win elections.
    Keywords: gender bias, elections, female politicians.
    JEL: D72 J16
    Date: 2023–09
  7. By: Shuguang Jiang; Marie Claire Villeval (GATE - GATE - GATE - Groupe d'Analyse et de Théorie Economique -UMR5824)
    Abstract: We investigated lying as a collective‐risk social dilemma. Misreporting resulted in increased individual earnings but when total claims reached a certain threshold, all group members were at risk of collective sanction, regardless of their individual behavior. Due to selfishness and miscoordination, most individuals earned less than the reservation payoff from honest reporting in the group. However, preferences for truth‐telling lowered the risk of collective sanction in this setting compared to a social dilemma game in which players could make direct claims without lying. The risk of sanctions decreased with risk aversion and a smaller group size.
    Keywords: Dishonesty, Collective Risk, Public Bad, Group Size, Individualism, D01
    Date: 2023–07–10
  8. By: Ashani Amarasinghe; Pushkar Maitra; Yuchen Zhongs
    Abstract: Better economic outcomes can prevail when governments at different levels of hierarchy are politically aligned. This often happens because upper level governments are more willing to transfer resources to, and invest in public goods in, aligned constituencies, where the elected candidate belongs to the party in power. In this paper we examine whether such political alignment causally affects public safety. We consider the case of the Naxalite insurgency in India, an issue of significant public safety and security. We focus on close elections using a regression discontinuity (RD) design, which allows us to examine the causal impact of electing a (state ruling party) aligned candidate at the constituency level. Our RD estimates show that the election of an aligned candidate leads to a significant reduction in the incidence of violence. We find that the benefits of alignment are amplified where politically aligned constituencies are spatially clustered. Examining the role of local natural resource activity, i.e., mining, as an underlying mechanism, we find that this negative effect is driven by constituencies close to mining areas. These findings confirm the relevance of political alignment in delivering public safety within constituencies, and the potential role played by local mining activity.
    Keywords: Political alignment; Naxalite insurgency; public safety; India
    Date: 2023–09
  9. By: Huet-Vaughn, Emiliano (Pomona College)
    Abstract: The positive political returns to providing cash transfers have been well documented. However, redistribution through the tax and transfer system, while direct, is not the only means by which governments seek to change the income distribution: regulation of private market transactions may have a similar, if indirect, effect, implicitly redistributing via so-called "pre-distribution" policies. Wage floors, in particular, are implemented with the explicit goal of redistributing pre-tax firm income to low-wage workers. In the United States, polls consistently indicate minimum wage increases are broadly popular, and, also clearly associated with the Democratic party. This paper provides the first test of whether large minimum wage increases actually yield electoral gains for Democrats. For both federal and state races, I find no evidence that this is generally true using an event-study design and sub-national variation in minimum wages from the early 1990s to recent years. A null result is further confirmed when using a beneficiary-level political sentiment measure and difference-in-difference design. Various explanations for the finding are explored and dispelled while newly collected survey evidence supports a salience, or inattention, mechanism. Specifically, voters are found to attend much less to a minimum wage increase than to an equivalently-valued direct cash transfer from the government. This suggests putting money in people's hands may not be enough to receive political credit and that the directness of a transfer may itself matter.
    Keywords: salience, minimum wage, voting
    JEL: J8 D72
    Date: 2023–08

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