Proportional power is free from paradoxes

We modify the story behind the Shapley-Shubik power index and apply it to a legislative body. The resulting proportional index may be trivial, but is free from the paradoxical behaviour observable with standard power indices. The widespread use of this index may in fact be the reason for these \paradoxes".a priori voting power, paradox of large size,paradox of new members, paradox of quarrelling members, Gamson's Law.

Measuring voting power: The paradox of new members vs the null player axiom

Qualified majority voting is used when decisions are made by voters of different sizes. In such situations the voters' influence on decision making is far from obvious; power measures are used for an indication of the decision making ability. Several power measures have been proposed and characterised by simple axioms to help the choice between them. Unfortunately the power measures also feature a number of so-called paradoxes of voting power. In this paper we show that the Paradox of New Members follows from the Null Player Axiom. As a corollary of this result it follows that there does not exist a power measure that satisfies the axiom, while not exhibiting the Paradox.a priori voting power, paradox of new members, null player axiom

Cabinet formation and portfolio distribution in European multiparty systems

Government formation in multiparty systems is of self-evident substantive importance, and the subject of an enormous theoretical literature. Empirical evaluations of models of government formation tend to separate government formation per se from the distribution of key government pay-offs, such as cabinet portfolios, between members of the resulting government. Models of government formation are necessarily specified ex ante, absent any knowledge of the government that forms. Models of the distribution of cabinet portfolios are typically, though not necessarily, specified ex post, taking into account knowledge of the identity of some government ‘formateur’ or even of the composition of the eventual cabinet. This disjunction lies at the heart of a notorious contradiction between predictions of the distribution of cabinet portfolios made by canonical models of legislative bargaining and the robust empirical regularity of proportional portfolio allocations – Gamson’s Law. This article resolves this contradiction by specifying and estimating a joint model of cabinet formation and portfolio distribution that, for example, predicts ex ante which parties will receive zero portfolios rather than taking this as given ex post. It concludes that canonical models of legislative bargaining do increase the ability to predict government membership, but that portfolio distribution between government members conforms robustly to a proportionality norm because portfolio distribution follows the much more difficult process of policy bargaining in the typical government formation process

The Dynamics of Distributive Politics

We study dynamic committee bargaining over an infinite horizon with discounting. In each period a committee proposal is generated by a random recognition rule, the committee chooses between the proposal and a status quo by majority rule, and the voting outcome in period t becomes the status quo in period t+1. We study symmetric Markov equilibria of the resulting game and conduct an experiment to test hypotheses generated by the theory for pure distributional (divide-the-dollar) environments. In particular, we investigate the effects of concavity in the utility functions, the existence of a Condorcet winning alternative, and the discount factor (committee "impatience"). We report several new findings. Voting behavior is selfish and myopic. Status quo outcomes have great inertia. There are strong treatment effects, that are in the direction predicted by the Markov equilibrium. We find significant evidence of concave utility functions.Dynamic bargaining, voting, experiments, divide-the-dollar,committees

Transparency & Legislative Behavior

[ES] ¿Se comportan de manera diferente nuestros representantes cuando sus acciones pueden ser observadas por los ciudadanos de cuando éstas no lo son? La intuición surgiere que sí, pero la falta de transparencia que se detecta en los procesos legislativos de muchos países entorpece la investigación empírica convencional. Este trabajo presenta los resultados preliminares de un experimento diseñado para estimar precisamente cuánto importa la transparencia. El experimento reúne a cuatro personas, de los cuales tres actúan como legisladores y una como ciudadano. Los primeros formulan y votan un presupuesto y, luego, el segundo decide si reelegir a cada legislador para un siguiente mandato. El nivel de transparencia varía según los procedimientos desarrollados, pero se advierte que la transparencia fomenta presupuestos al servicio del público, coaliciones legislativas universalistas y altos niveles de reelección.[EN] Do representatives behave differently when their actions are observed by citizens versus when they are not observed? Intuition suggests the answer is yes, but non-transparent legislative processes in many countries present obstacles to conventional empirical research. This paper presents preliminary results from an experiment designed test what difference transparency makes. The experiment involves Legislators proposing and voting on a budget that can be divided among the Legislators and the Public, followed by the Public deciding whether to reelect each Legislator for the next period. The degree of transparency varies across different treatments. Transparency encourages public-serving budgets, universalistic legislative coalitions, and high rates of reelection

Inequality, Development, and the Stability of Democracy – Lipset and Three Critical Junctures in German History

This paper studies the endogenous emergence of political regimes, in particular democracy, oligarchy and mass dictatorship, in societies in which productive resources are distributed unequally and institutions do not ensure political commitments. The political regime is shown to depend on resource inequality as well as on economic development, reflected in the production structure. The main results imply that for any level of development there exists a distribution of resources such that democracy is the political outcome. This distribution is even independent of the particular development level if the income share generated by the poor is sufficiently large. On the other hand, there are distributions of resources for which democracy is infeasible in equilibrium irrespective of the level of development. The model also delivers results on the stability of democracy. Variations in inequality across several dimensions due to unbalanced technological change, immigration or changes in the demographic structure affect the scope for democracy or may even lead to its breakdown. The results are consistent with the different political regimes that emerged in Germany after its unification in 1871.Income inequality, development, democracy, coalition formation, factor endowments, demographic structure.

Essays in Experimental Economics

This dissertation consists of four essays which use laboratory experiments to gather causal evidence on important economic questions and theories. Part 1 (chapters 2 and 3) contributes to a literature in Behavioral Economics by analyzing the role of heuristics and biases in explaining social choices in one-shot games and decisions. Part 2 (chapters 4 and 5) contributes to a literature in Public Economics by asking how the decision rule affects the type of agreements made as well as the efficiency of such agreements