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on Collective Decision-Making |
| By: | Shuo Liu |
| Abstract: | We study the effect of public information on collective decision-making in a committee with members of both common and conflicting interests. We show that the set of preferences that allow for the existence of an informative voting equilibrium can be heavily restricted by the presence of a public signal, regardless of the size of the committee and the choice of the voting threshold value. What’s worse, the presence of the public information introduces an inefficient equilibrium which robustly exists across different voting rules. To mitigate the harmful effect of the public information, we propose to use a class of more flexible voting rules, whose threshold values de- pend on both the precision and the realization of the public signal, that may restore the informative voting equilibrium. In particular, in a standard setting with common interest agents, the contingent voting rule that we construct not only always restores the informative voting equilibrium but also achieves full informational efficiency. |
| Keywords: | Strategic voting, collective decision-making, public information, committee design, optimal voting rule |
| JEL: | D72 D82 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:zur:econwp:191&r=cdm |
| By: | Valentina Bosetti (Fondazione Eni Enrico Mattei, Milan (Italy) and Bocconi University, Milan (Italy)); Melanie Heugues (Fondazione Eni Enrico Mattei, Milan (Italy)); Alessandro Tavoni (Grantham Research Institute, London School of Economics, London (England)) |
| Abstract: | We study the effect of leadership in an experimental threshold public ‘bad’ game, where we manipulate both the relative returns of two investments (the more productive of which causes a negative externality) and the extent to which the gains from leadership diffuse to the group. The game tradeoffs mimic those faced by countries choosing to what degree and when to transition from incumbent polluting technologies to cleaner alternatives, with the overall commitment dictating whether they manage to avert dangerous environmental thresholds. Leading countries, by agreeing on a shared effort, may be pivotal in triggering emission reductions in non-signatories countries. In addition, the leaders’ coalition might also work as innovation and technology adoption catalyzer, thus producing a public good (knowledge) that benefits all countries. In our game, players can choose to tie their hands to a cooperative strategy by signing up to a coalition of first movers. The game is setup such that as long as the leading group reaches a pivotal size, its early investment in the externality-free project may catalyze cooperation by non-signatories. We find that the likelihood of reaching the pivotal size is higher when the benefits of early cooperation are completely appropriated by the coalition members, less so when these benefits spillover to the non-signatories. On the other hand, spillovers have the potential to entice second movers into adopting the ‘clean’ technology. |
| Keywords: | Climate Change, International Cooperation, R&D Spillovers, Threshold Public Goods Game, Coalition Formation Game, Climate Experiment |
| JEL: | Q5 Q58 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2015.21&r=cdm |
| By: | Pietro Battiston; Luca Stanca |
| Abstract: | This paper investigates opinion dynamics and social in uence in directed communication networks. We study the theoretical properties of a boundedly rational model of opinion formation in which individuals aggregate the information they receive from their neighbors by using weights that are a function of neighbors' indegree. We then present the results of a laboratory experiment explicitly designed to test the causal effect of indegree on social in uence. We find that the social influence of an agent is positively affected by the number of individuals she listens to. When forming their opinions, agents take into account the structure of their communication network, although only to a limited extent. |
| Keywords: | Social Networks, Learning, Social Influence, Bounded Rationality |
| Date: | 2015–04–24 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2015/11&r=cdm |
| By: | Adena, Maja; Enikolopov, Ruben; Petrova, Maria; Santarosa, Veronica; Zhuravskaya, Ekaterina |
| Abstract: | How do the media affect public support for democratic institutions in a fragile democracy? What role do they play in a dictatorial regime? We study these questions in the context of Germany of the 1920s and 1930s. During the democratic period, when the Weimar government introduced progovernment political news, the growth of Nazi popularity slowed down in areas with access to radio. This effect was reversed during the campaign for the last competitive election as a result of the pro- Nazi radio broadcast following Hitler's appointment as German chancellor. During the consolidation of dictatorship, radio propaganda helped the Nazis to enroll new party members. After the Nazis established their rule, radio propaganda incited anti-Semitic acts and denunciations of Jews to authorities by ordinary Germans. The effect of anti-Semitic propaganda varied depending on the listeners' predispositions toward the message. Nazi radio was most effective in places where anti- Semitism was historically high and had a negative effect in places with historically low anti-Semitism. |
| Abstract: | Inwieweit können die Medien zum Schutz oder zur Untergrabung ungefestigter Demokratien beitragen? Und inwieweit können sie Unterstützung für die Politik des Diktators generieren? Wir analysieren diese Fragen im Kontext des Radios in der Weimarer Republik und dem frühen NSRegime. In der Zeit zwischen 1929 und 1932, in der das Rundfunkprogramm pro-demokratisch ausgerichtet war, hatte das Radio einen signifikant negativen Einfluss auf die Wahlergebnisse der NSDAP. Dieser Effekt wurde bereits 5 Wochen nach der Ernennung Hitlers zum Kanzler und der Kontrollübernahme über das Rundfunkprogramm umgekehrt. Nachdem die Nazis ihre Macht konsolidiert hatten, trug die Rundfunkpropaganda messbar zu vermehrten Parteieintritten und zur Zustimmung der Bevölkerung bei der Denunziation von Juden und zu anderen Formen des offenen Antisemitismus bei. Dennoch war der Einfluss der NS-Propaganda nicht uniform. Je nach Voreingenommenheit der Zuhörer konnte die Propaganda sehr effektiv oder aber kontraproduktiv sein. Das NS-Radio war am effektivsten in Orten mit historisch hohem Antisemitismus und hatte einen negativen Effekt auf die Unterstützung der antisemitischen Politik in Orten mit historisch niedrigem Antisemitismus. |
| Keywords: | Anti-semitism,dictatorship,media,Nazis,propaganda,unconsolidated democracy |
| JEL: | D72 L82 N74 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:wzbeoc:spii2013310r&r=cdm |
| By: | Edward Cartwright; Anna Stepanova |
| Abstract: | We contrast and compare three ways of predicting efficiency in a forced contribution threshold public good game. The three alternatives are based on ordinal potential, quantal response and impulse balance theory. We report an experiment designed to test the respective predictions and find that impulse balance gives the best predictions. A simple expression detailing when enforced contributions result in high or low efficiency is provided. |
| Keywords: | Public good; threshold; impulse balance theory; quantal response; forced contribution; ordinal potential |
| JEL: | C72 H41 C92 |
| Date: | 2015–03 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:1506&r=cdm |
| By: | Abel Bojar |
| Abstract: | The New Politics of the welfare state suggests that periods of welfare retrenchment present policy-makers with a qualitatively different set of challenges and electoral incentives compared to periods of welfare expansion. An unresolved puzzle for this literature is the relative electoral success of retrenching governments in recent decades, as evidenced by various studies on fiscal consolidations. This article points to the importance of partisan biases as the main explanatory factor. I argue that partisan biases in the electorate create incentives for incumbent governments to depart from their representative function and push the burden of retrenchment on the very constituencies that they owe their electoral mandate to (”Nixon-goes-to-China”). After offering a simple model on the logic of partisan biases, the article proceeds by testing the unexpected partisan hypotheses that the model generates. My findings from a cross-section-time-series analysis in a set of 25 OECD countries provide corroborative evidence on this Nixon-goes-to-China logic of welfare retrenchment: governments systematically inflict pain on their core constituencies. Some of the losses that the core constituencies suffer during austerity, however, are recouped during fiscal expansions when traditional partisan patterns take hold. |
| Keywords: | welfare retrenchment, social spending, austerity, partisanship, Nixon-goes-to-China, representation |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:eiq:eileqs:91&r=cdm |
| By: | Marcel Fafchamps; Ruth Vargas Hill |
| Abstract: | We design an original laboratory experiment to investigate whether redistributive actions hinder the formation of Pareto-improving groups. We test, in an anonymous setting with no feedback, whether people choose to destroy or steal the endowment of others and whether they choose to give to others, when granted the option. We then test whether subjects join a group that increases their endowment but exposes them to redistribution. We conduct the experiment in three very different settings with a priori different norms of pro-social behavior: a university town in the UK, the largest urban slum in Kenya, and rural Uganda. We find a lot of commonality but also large differences between sites. UK subjects behave in a more selfish and strategic way -- giving less, stealing more. Kenyan and Ugandan subjects behave in a more altruistic and less strategic manner. However, pro-social norms are not always predictive of joining behavior. African subjects are less likely to join a group when destruction or stealing is permitted. It is as if they are less trusting even though they are more trustworthy. These findings contradict the view that African current underdevelopment is due to a failure of generalized morality. |
| JEL: | D03 O17 |
| Date: | 2015–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:21127&r=cdm |
| By: | Paola Conconi; David De Remer; Georg Kirchsteiger; Lorenzo Trimarchi; Maurizio Zanardi |
| Keywords: | trade disputes; elections; reciprocity |
| JEL: | F13 D72 D78 D63 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:eca:wpaper:2013/199236&r=cdm |
| By: | Fanti, Luciano; Buccella, Domenico |
| Abstract: | This paper investigates the bargaining agenda selection in a unionised monopoly with network effects. In contrast with the established result that monopolist always prefers Right-To-Manage (RTM), it is shown that monopolist prefers Sequential Efficient Bargaining (SEB), provided that the network effect is sufficiently intense and union’s power not too high. Since the union always prefers SEB, the presence of network effects may solve the traditional conflict of interests between parties and allow the achievement of the highest social welfare. Moreover, if the monopolist can choose the agenda, it may strategically commit either to RTM or SEB or EB to deter market entry, depending on the network intensity and thus all agendas are an effective device as a barrier to entry. Furthermore, with endogenous agenda’s selection, the parties may agree on SEB, provided that the network effects are intense and the union’s power not excessively low. The social welfare under duopoly with SEB is the Pareto-superior outcome. However, the SEB institution may deter entry in specific cases. Thus, the SEB institution itself may prevent the most desirable welfare outcome but in any case it remains socially preferred to RTM and EB. |
| Keywords: | Efficient bargaining; Right-to-manage; Firm-union bargaining agenda; Network effects |
| JEL: | J51 L13 L21 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:64090&r=cdm |
| By: | Ralph-C Bayer (School of Economics, University of Adelaide) |
| Abstract: | If either property rights or institutions are weak, agents who create wealth by cooperating will later have an incentive to fight over the distribution of it. In this paper we investigate theoretically and experimentally the circumstances under which welfare losses from investment in distributional contests destroy welfare gains from voluntary cooperation. We find that in situations, where the return to cooperation is high, subjects cooperate strongly and welfare exceeds the predicted non-cooperation levels. If returns to cooperation are low, then subjects still cooperate, but the resources wasted in the distributional conflict lead to lower welfare than if subjects had followed the theoretical prediction of not cooperating. |
| Keywords: | Conflict, Cooperation, Contests, Experiments |
| JEL: | D74 C91 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:adl:wpaper:2015-04&r=cdm |