Decision Costs and Welfare Effects of Democratic Voting Rules: An Experimental Analysis

What impact do majority rule and unanimity rule have on welfare and decision costs? According to Buchanan and Tullock ([1962] 1999) the unanimity principle must be regarded as a democratic norm, because it guarantees Pareto-efficient welfare effects. We present experimental results from a public goods game, which demonstrate in contrast to this assumption that majority rule can produce greater welfare effects than unanimity rule. This result suggests a critical revision of theoretical approaches which narrow the legiti­macy of majority rule in this respect

Decision Costs and Welfare Effects of Democratic Voting Rules: An Experimental Analysis

What impact do majority rule and unanimity rule create on welfare and decision costs? According to Buchanan and Tullock ([1962] 1999) the unanimity principle must be regarded as a democratic norm, because it guarantees Pareto-efficient welfare effects. We present experimental results from a public goods game, which demonstrate in contrast to this assumption that majority rule can produce larger welfare effects than unanimity rule. This result suggests a critical revision of theoretical approaches which narrow the legitimacy of majority rule in this respect

Refining National Policy: The Machine-Tool Industry in the Local Economy of Stuttgart

This chapter examines the preconditions for the success of the machine-tool industry in Stuttgart. It considers the historical origins of the machinery industry in Stuttgart, the development of the Diversified Quality Production (DQP) regime after World War II, and the city’s economic performance and challenges faced by firms and supporting institutions in the 1980s and 1990s. The responses of firms to these challenges and the fate of the DQP regime are then analysed

Restructuring Duisburg: A New Local Production System Substitutes an Old Steel Plant

This chapter examines the rise, decline, and restructuring of the steel industry in Duisburg. Structural policy initiatives led to the shift from steel production to a logistics cluster. The former steel city was attractive for larger enterprises of the logistics branch due to its market proximity and connection to different means of transportation

Behavioral Differences between Collective and Individual Players in the Public Goods Game

Most experiments comparing individual and group behavior find that groups behave more egoistically than individuals. However, most of these studies do not control for the influence of the within-group decision making mechanism which might have an important impact on group behavior. In this paper, we report first results of laboratory experiments comparing individual and group behavior in a public goods game. Groups decide by majority rule. We find that cooperation levels do not differ between groups and individuals. The median player is the most influential group member. We can show that the institutional incentives set by majority rule dominate psychological traits which presumably lead to more selfish group behavior in other experimental settings

Regional and sectoral varieties of capitalism

This study seeks to go beneath the generalizations that constitute characterizations of national economies in order to examine local and sectoral diversity - in particular, forms of capitalist organization at the level of localized sectors. It reports on the findings of research based on detailed case histories of local economies in four different types of production: modernized craft manufacturing (furniture), mass production (motor vehicles), high-technology production (biopharmaceuticals) and high-tech services (television film-making). In each case a local economy in Germany (usually seen counter-factually as an example of a particularly national system) was compared with one elsewhere in Europe: respectively, southern Sweden, Hungary (compared with eastern Germany) and the UK (for two studies). In the analysis, companies act rationally in response to sector-specific challenges, being partly bound by the existing institutional framework that they encounter, but partly acting to alter it. Two possibilities are distinguished and found in the cases. In the first (structurally conservative) case, arrangements of governance in the national innovation and production system prove to be beneficial for the companies and their aim to stand up to international competition. Insofar as national institutions help companies to deal with competition on their markets, they will probably try to preserve these arrangements. In the second (innovative) case, companies turn away from the national context and develop their own local governance structure. If the national institutional structure is seen as not adequate or 'non-fitting' to deal with sectorally specific terms of competition, then the internal and external coordination of companies - in reaction to challenges posed by the market - is likely to deviate from the national structure. In some instances evidence of 'creative incoherence', where local deviation from the national model provides a creative impulse, is found

Creative Local Development in Cologne and London Film and TV Production

This chapter analyses two case studies on public broadcasting in Germany and the UK. The case studies demonstrate several examples of actors at local and sectoral level taking initiatives to resolve apparent deficiencies for their purposes in the ‘normal’ national array of institutions. A particular surprise of the finding is that in doing so both German and British film and television makers have occasionally, usually by chance, hit on institutions more typical of the other country