5th Workshop

(Most papers are work in progress and preliminary and should not be cited without the consent of the authors.)
 

Nicola Maaser | Aarhus University
Thomas Stratmann | George Mason University

Costly Voting in Weighted Committees: The Case of Moral Costs, Downloadpaper (PDF, 1.4 MB)vertical_align_bottom

We develop a theoretical model of voting behavior in committees when members differ in influence and receive payoffs that condition on the individual vote and the collective decision. Applied to a group decision involving moral costs, the model predicts that the distribution of decision-making power affects committee members’ incentives to make immoral choices: More influential agents tend to support the immoral choice, while less influential agents free-ride. A skewed power distribution makes immoral collective choices more likely. We then present results of a laboratory experiment that studies committee members’ voting behavior and collective choices under different distributions of decision-making power. As hypothesized, we find that the frequency of immoral decisions is positively related to an agent’s voting power.

Nikitas Konstantinidis | IE University
Konstantinos Matakos | King’s College London

Have Your Cake and Eat It Too? Intraparty Bargaining and the Micro-foundations of Populism, Downloadpaper (PDF, 524 KB)vertical_align_bottom


We develop a model of electoral competition in the context of multi-party systems, where policy platforms consist of traditional spatial positions and a policy in favor or against membership in an international union that imposes binding policy constraint on the traditional left-right dimension. We assume that parties consist of two factions, the Opportunists (office-seekers) and the Militants (ideologues), and we extend Roemer’s (1998) Party Unanimity Nash Equilibrium (PUNE) concept for endogenously formed parties to derive a manifold of equilibria, ranging form moderate pro-membership, to populist, to polarized anti-membership ones. We then apply the Nash bargaining solution —by allowing for the possibility of party splits as disagreement outcomes— in order to refine our equilibrium predictions and to infer under what conditions party splits are the more likely outcomes depending on the perceived benefits of union membership and the scope of policy constrains that come with it. We show how populism can arise as the outcome of intra-party bargaining that keeps the party together in the face of strong factionalism over supranational integration. A direct implication of our results is that populism can be innately cyclical. Our model also predicts that party fragmentation (as a result of party splits) and ideological polarization are more likely when the orthogonal benefits of integration are lower and the scope of policy constraints is narrower.

Antoine Loeper | Universidad Carlos III de Madrid
Wioletta Dziuda | University of Chicago

Legislative Priorities and the Structure of Government, Downloadpaper (PDF, 425 KB)vertical_align_bottom
 

We propose a dynamic model of elections and policymaking in which in every period, a representative voter decides whether to elect a unified government, in which a single party controls policymaking, or a divided government, in which the agenda and veto powers are held by different parties. The elected government then observes a common shock to the playersí preferences, and decides which of two policy dimensions to reform, if any. On the consensual policy dimension, both parties and the voter have congruent preferences (e.g., infrastructure), whereas on the divisive dimension (e.g., taxation), they disagree with positive probability: party l (r) has more leftist (rightist) preferences than the voter. Crucially, the government faces an agenda constraint in that it can change only one dimension of the policy vector inherited from the previous government. Which reform is socially optimal depends on the realization of the shock. We show that in each period, the voter elects a divided government in which the agenda power is held by the party more inclined to implement a divisive reform in that period. A divided government prevents the agenda setting party from prioritizing a divisive reform when it is inefficient, which frees up the agenda constraint and forces it to focus on the consensual reform. The allocation of agenda power, however, assures that a divisive reform is more likely to occur whenever the voter benefits from it more than from a consensual reform. Interestingly, the electoral incentives provided by the voterís choice lead parties to moderate policymaking on the divisive dimension, further benefiting the voter.

Karine Van der Straeten | Toulouse School of Economics
Takuro Yamashita | Toulouse School of Economics

On the Veil-of-ignorance Principle: Welfare-optimal Information Disclosure in Voting, Downloadpaper (PDF, 282 KB)vertical_align_bottom

Voters’ voting decisions crucially depend on their information. Thus, it is an important question how much / what kind of information they should know, as a normative guidance of the optimal extent of transparency. We consider a simple two-alternative, private-value voting environment, and study the optimal information disclosure policy by a utilitarian social planner. Although full transparency is sometimes (informally) argued as ideal, we show that full transparency is often strictly suboptimal, which is basically because any voting mechanism can only elicit the voters’ ordinal preferences rather than their cardinal ones. Under certain conditions, the optimal policy discloses just the “anonymized” information, which can effectively make the voters close to the state of the “veil of ignorance”. In particular, we discuss the importance of the optimality of the voting mechanism in place as a part of our condition: if the voting rule is suboptimal, then the optimal  information disclosure policy could be biased in order to mitigate it.

David K. Levine | EUI and WUSTL
Cesar Martinelli | George Mason University

Razor-Thin Elections, Downloadpaper (PDF, 177 KB)vertical_align_bottom

We model head-to-head elections as a competition between incentive schemes to turn out voters. We show that elections are either heavily contested, and decided by thin margins, or safe, meaning that voters in one of the two sides effectively give in, possibly leading to a landslide in favor of the larger side. In equilibrium, as the quality of polling improves, contested elections with razor-thin margins become prevalent.

Ingela Alger | Toulouse School of Economics
Jean-Francois Laslier | Paris School of Economics 

Homo Moralis Goes to the Voting Booth: a New Theory of Voter Turnout, Downloadpaper (PDF, 219 KB)vertical_align_bottom
 

Why do voters incur costs to participate in large elections? This paper proposes an exploratory analysis of the implications of evolutionary Kantian morality for this classical problem in the economic theory of voting: the costly participation problem.

Sascha Kurz | Bayreuth University
Alexander Mayer | Bayreuth University
Stefan Napel | Bayreuth University

Influence, Success and Manipulation in Weighted Committee Voting
 

Committee decisions on three or more alternatives depend on the adopted voting method and the underlying distribution of votes (e.g. voting weights, party seats, individual shareholdings). Based on structural analysis of how voting weights affect the aggregation of individual preferences into a collective decision and generalizations of the Penrose-Banzhaf and Shapley-Shubik indices from binary votes to general social choice, we study the distribution of voting power and who benefits from adoption of a particular voting rule (e.g. a plurality vote vs. plurality voting with a runoff vs. pairwise comparisons). We also investigate the interaction of voting weights, voting method and the manipulability of committee decisions.

Hans Gersbach | ETH Zurich
Akaki Mamageishvili | ETH Zurich
Oriol Tejada | University of Barcelona

No Click-Democracy, Downloadpaper (PDF, 153 KB)vertical_align_bottom
 

How should voting costs be set in democratic elections? Our main insight is that lowering the cost of voting to the lowest feasible non-zero level might not entail the best utilitarian outcomes. The explanation for this counter-intuitive result is that if voting is costly, the minority displays higher turnout rates than the majority. The so-called underdog effect creates an inefficiency of elections by lowering the probability
that the majority alternative is chosen. This inefficiency can be completely offset if there are sufficiently many (partisan) voters who vote no matter the costs and have preferences as the rest of the population. Lowering voting costs increases turnout by non-partisan voters, while increasing voting costs raises the costs incurred by partisan voters. Such costs are internalized by the utilitarian social planner.

Anja Prummer | Johannes-Kepler-University Linz
Francesco Nava | London School of Economics 

Profitable Inequality, Downloadpaper (PDF, 653 KB)vertical_align_bottom
 

We characterise an employer’s optimal design of values for promotion among his workers through workplace culture. Workers compete by exerting effort, and higher effort induced by greater valuations corresponds to higher profits for the employer. Introducing inequalities in valuations makes workers’ values more easily recognisable, reducing their information rent, which in turn increases effort. At the same time, inequalities lead to differences in promotion attainment, potentially reducing effort. We show that if culture redistributes value within or
across workers, the reduction in information rent outweighs potential losses due to inequality. Maximal dispersion and maximal discrimination emerge as features of optimal designs. We confirm our theoretical predictions in an empirical application.

The 5th ETH Workshop on Democracy, in collaboration with CEPR, will take place on the 9th and 10th of June, 2022 in Zurich.

The workshop is organized by the Chair of Macroeconomics: Innovation and Policy and aims to:

• present leading theoretical approaches to modeling Politics,
  
• present cutting-edge theoretical analyses of Political Economy problems,
  
• explore new forms of democracy.

We expect the workshop to provide a stimulating discussion of ongoing research among a limited number of invited participants. Each presentation will last 60 minutes that will be split as follows: 45 mins (speaker + questions) + 15 min (discussant). Find the workshop schedule as a pdf file Downloadhere (PDF, 470 KB)vertical_align_bottom.