scholarly journals Costly verification in collective decisions

2020 ◽  
Vol 15 (3) ◽  
pp. 923-954
Author(s):  
Albin Erlanson ◽  
Andreas Kleiner

We study how a principal should optimally choose between implementing a new policy and maintaining the status quo when information relevant for the decision is privately held by agents. Agents are strategic in revealing their information; the principal cannot use monetary transfers to elicit this information, but can verify an agent's claim at a cost. We characterize the mechanism that maximizes the expected utility of the principal. This mechanism can be implemented as a cardinal voting rule, in which agents can either cast a baseline vote, indicating only whether they are in favor of the new policy, or make specific claims about their type. The principal gives more weight to specific claims and verifies a claim whenever it is decisive.

2018 ◽  
Vol 10 (3) ◽  
pp. 253-271 ◽  
Author(s):  
Moritz Drexl ◽  
Andreas Kleiner

A committee decides collectively whether to accept a given proposal or to maintain the status quo. Committee members are privately informed about their valuations and monetary transfers are possible. According to which rule should the committee make its decision? We consider strategy-proof and anonymous mechanisms and solve for the decision rule that maximizes utilitarian welfare, which takes monetary transfers to an external agency explicitly into account. For regular distributions of preferences, we find that it is optimal to exclude monetary transfers and to decide by qualified majority voting. This sheds new light on the common objection that criticizes voting for its inefficiency. (JEL D71, D72, D82)


2006 ◽  
Vol 58 (3) ◽  
pp. 413-445 ◽  
Author(s):  
Thomas König ◽  
Jonathan B. Slapin

In spite of the recent failure of two referendums, the drafting of a constitution for the second biggest economic power in the world, the European Union (EU), remains a major event in the history of European integration. Whether the constitution or a revised version of it will come into force or not, several important questions emerge. How did an increased number of twentyfive member states reach a conclusion, whereas a lower number of fifteen had failed at previous intergovernmental attempts? In particular, how did the constitutional convention differ from previous intergovernmental conferences (iGCs) at which the EU exclusively bargained its treaty documents in the past? How can one explain the outcomes of the convention, which proposes redistribution of power and resources among twenty-five or more member states? This article uses the positions of the delegates of the EU's constitutional convention to examine bargaining in a setting with few formal rules. The authors use theoretical insights from a spatial model and new survey data to determine the implicit voting rule used at the convention. They find that the convention differed from previous IGCs because the convention was governed by consensus, whereas previous EU bargains on treaties had always required unanimous support. The level of consensus was higher than simple majority rule but lower than unanimity. Since this threshold impacted who won and who lost at the convention, the authors also examine the sources of bargaining power, such as delegates' distance to the status quo, distance to the median, population size, and domestic constraints. The results confirm several findings in the EU bargaining and two-level game literature, for example, that actors closer to the status quo hold a stronger bargaining position and that actors from larger member states are neither more likely nor less likely to win at the negotiating table than are actors from smaller states. The findings on the irrelevance of domestic constraints also indicate why the popular votes in France and the Netherlands failed.


2021 ◽  
Author(s):  
Paul J Brewer ◽  
Raymond Moberly

Emergent behavior in repeated collective decisions of minimally intelligent agents -- who at each step in time invoke majority rule to choose between a status quo and a random challenge -- can manifest through the long-term stationary probability distributions of a Markov Chain. We use this known technique to compare two kinds of voting agendas: a zero-intelligence agenda that chooses the challenger uniformly at random, and a minimally-intelligent agenda that chooses the challenger from the union of the status quo and the set of winning challengers. We use Google Co-Lab's GPU accelerated computing environment, with code we have hosted on Github, to compute stationary distributions for some simple examples from spatial-voting and budget-allocation scenarios. We find that the voting model using the zero-intelligence agenda converges more slowly, but in some cases to better outcomes.


Author(s):  
Francesco Passarelli ◽  
Alessandro Del Ponte

Prospect theory introduces several anomalies in the behavior of rational agents, including loss aversion, the reflection effect, probability weighting, and the certainty effect. Loss aversion occurs relative to the current state of the world, called reference point. Being loss averse causes people to prefer the current state of affairs above and beyond the expected utility that comes from a risky political change, engendering a status quo bias. Yet, bias is asymmetric due to the reflection effect: people are too tepid toward advantageous platforms or candidates, whereas they are not critical enough of detrimental policies or bad politicians. Both rich and poor citizens take similar stances on nonpartisan issues (such as national defense): this happens because they evaluate uncertain policy changes relative to a reference point. Citizens welcome radical political platforms with greater enthusiasm than incremental proposals. Generally, under prospect theory societal conflict is smoother than under expected utility theory. Older societies are more prone to preserving the status quo than younger ones. These properties also affect the choice of voting rules. Loss aversion induces people to prefer more prudent voting rules and preserve the status quo. Hence, agents favor higher majority thresholds or even unanimity over simple majority in constitutional choice. The status quo bias supports the persistence of policy cycles, with prolonged drifts in one direction before a trend reversal. In sum, loss aversion and other anomalies pinpointed by prospect theory offer insightful predictions with which to study political phenomena.


2005 ◽  
Author(s):  
Amber L. Garcia ◽  
Michael T. Schmitt ◽  
Naomi Ellemers ◽  
Nyla R. Branscombe
Keyword(s):  

Sign in / Sign up

Export Citation Format

Share Document