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on Collective Decision-Making |
| By: | Christina Luxen |
| Abstract: | This paper studies the effect of pre-election polls on the participation decision of citizens in a large, two-candidate election, and the resulting incentives for the poll participants. Citizens have private values and voting is costly and instrumental. The environment is ex ante symmetric and features aggregate uncertainty about the distribution of preferences. Citizens base their participation decision on their own preferences and on the information provided in the poll. If all participants answer the poll truthfully, the underdog effect implies that the supporters of the trailing candidate turn out at higher rates than the supporters of the leader of the poll. This effect yields incentives for the poll participants to misrepresent their preferences to encourage the voters who have the same preferences to turn out. If poll participants are strategic, however, there does not exist an equilibrium in which the poll conveys any information. Thus, in the limit, the majority candidate wins the election almost surely, regardless of voters' posterior beliefs. |
| Keywords: | Costly voting, Polls, Aggregate Uncertainty, Underdog Effect |
| JEL: | D72 D83 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_199&r=all |
| By: | Andre Speit; Paul Voss |
| Abstract: | Financial innovation has created a multitude of techniques for activist investors to acquire voting rights in excess of their economic exposure. We provide structure to the manifold of decoupling techniques by classifying them into Buy&Hedge, Hedge&Buy, and Vote Trading techniques. The possibility to cast votes without bearing the effect on share value is of particular interest to an activist who wants to push her private agenda, instead of maximizing firm value. Thus, we analyze which classes of decoupling techniques can be exploited profitably by a hostile activist. We find that Vote Trading techniques are most profitable and have the largest potential to reduce overall and shareholder welfare. Buy&Hedge techniques are constrained efficient because the activist suffers from a commitment problem. Hedge&Buy techniques fall in between, exhibiting inefficient and constrained-efficient equilibria. The results match the empirical evidence on vote prices from options and equity lending markets. |
| Keywords: | decoupling techniques, empty voting, hostile activism, shareholder activism, vote trading |
| JEL: | G32 G34 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_201&r=all |
| By: | Alessandra Casella (Columbia University [New York]); Antonin Macé (PSE - Paris School of Economics, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | Voters have strong incentives to increase their inuence by trading votes, a practice indeed believed to be common. But is vote trading welfare-improving or welfare-decreasing? We review the theoretical literature and, when available, its related experimental tests. We begin with the analysis of logrolling { the exchange of votes for votes, considering both explicit vote exchanges and implicit vote trades engineered by bundling issues in a single bill. We then focus on vote markets, where votes can be traded against a numeraire. We cover competitive markets, strategic market games, decentralized bargaining, and more centralized mechanisms, such as quadratic voting, where votes can be bought at a quadratic cost. We conclude with procedures allowing voters to shift votes across decisions { to trade votes with oneself only { such as storable votes or a modi_ed form of quadratic voting. We _nd that vote trading and vote markets are typically ine_cient; more encouraging results are obtained by allowing voters to allocate votes across decisions. |
| Keywords: | logrolling,vote trading,storable votes,quadratic voting,bundling,vote markets |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:psewpa:halshs-02922012&r=all |
| By: | Andre Speit; Paul Voss |
| Abstract: | This paper examines the effect of vote trading on shareholder activism and corporate governance. We show that vote trading enables hostile activism because voting rights trade at inefficiently low prices even when the activist’s motives are transparent. Our results explain empirical findings of low vote prices (Christofferson et al. 2007) and inefficient outcomes (Hu & Black 2006). Though an activist with superior information can facilitate information transmission through vote trading, traditional activist intervention techniques provide the same information transmission without the downsides inherent in vote trading. Our analysis of potential policy measures suggests that adopting simple majority rules and excluding bought votes offer the most promising intervention avenues. |
| Keywords: | blockholder, decoupling techniques, empty voting, hostile activism, share-holder activism, vote trading |
| JEL: | G32 G34 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2020_200&r=all |
| By: | Francesco Amodio (McGill University, CIREQ); Giorgio Chiovelli (Universidad de Montevideo); Sebastian Hohmann (Stockholm School of Economics SITE) |
| Abstract: | This paper studies the labor market consequences of ethnic politics in African democracies. We combine geo-referenced data from 15 countries, 32 parliamentary elections, 62 political parties, 243 ethnic groups, 2,200 electoral constituencies, and 400,000 individuals. We implement a regression discontinuity design that compares individuals from ethnicities connected to parties at the margin of electing a local representative in the national parliament. We find that having a local ethnic politician in parliament increases the likelihood of being employed by 2-3 percentage points. We hypothesize that this effect originates from strategic interactions between ethnic politicians and traditional leaders, the latter retaining the power to allocate land and agricultural jobs in exchange for votes. The available evidence supports this hypothesis. First, the employment effect is concentrated in the historical homelands of ethnicities with strong pre-colonial institutions. Second, individuals from connected ethnicities are more likely to be employed in agriculture, and in those countries where customary land tenure is officially recognized by national legislation. Third, they are also more likely to identify traditional leaders as partisan, and as being mainly responsible for the allocation of land. Evidence shows that ethnic politics shapes the distribution of productive resources across sectors and ethnic groups. |
| Keywords: | ethnic politics, employment, democracy, traditional leaders, Africa |
| JEL: | J15 J70 O10 P26 Q15 |
| Date: | 2019–12 |
| URL: | http://d.repec.org/n?u=RePEc:mtl:montec:12-2019&r=all |
| By: | Alessandro Passero; Filippo Randelli |
| Abstract: | Faced with increasing risks from climate change, food systems will need to transition away from dominant industrial paradigms and move towards a more sustainable way of producing, distributing, and consuming food. One solution or one side alone though might not have the desired systemic change or might not capture the full complexity of food systems. To go beyond two known criticisms of local food sustainable initiatives, i.e. to be rather small and to be developed outside policy frameworks and/or in stark opposition to current food systems, in this paper we argue to look at new meso-spaces of network relations at local level where community members, professionals, and governments get together to share knowledge, deliberate, and collectively devise place-based strategies to address complex food systems issues. To completely understand these spaces, this article provides a conceptual framework of analysis combining ideas from environmental governance, grassroots innovations, and diverse economies. |
| Keywords: | food systems, sustainability transitions, governance, grassroots innovations, diverse economies |
| JEL: | R11 O13 O44 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2020_09.rdf&r=all |
| By: | Bettina Klaus; Panos Protopapas |
| Abstract: | We study correspondences that choose an interval of alternatives when agents have single-peaked preferences over locations and ordinally extend their preferences over intervals. We extend the main results of Moulin (1980) to our setting and show that the results of Ching (1997) cannot always be similarly extended. First, strategy-proofness and peaks-onliness characterize the class of generalized median correspondences (Theorem 1). Second, this result neither holds on the domain of symmetric and single-peaked preferences, nor can in this result min/max continuity substitute peaks-onliness (see counter-Example 3). Third, strategy-proofness and voter-sovereignty characterize the class of ecient generalized median correspondences (Theorem 2). |
| Keywords: | correspondences; generalized median correspondences; single-peaked preferences;strategy-proofness |
| JEL: | C71 D63 D78 H41 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:20.04&r=all |