The network of weighted majority rules and its geometric realizations

In a previous work the first author considered the network G(n,p) of weighted majority rules (WMR) for n decision makers whose competencies are given by their probabilities p=(p₁,…,p_n) of making a correct decision. On this paper we consider chains of decision profiles, which must occur in G(n,p) in a fixed order, and show that they can be mapped onto straight lines in a low-dimensional geometric realization. The minimal number of directions which must used to separate all edges is given as the chromatic number of a certain incidence graph. We also define degenerate networks in which several nodes coalesce.     

Karl Marx’s Theory of Socio-Institutional Transformation in Late-Stage Capitalism

This article is in the tradition of Thorstein Veblen’s organized-intelligence-in-action definition of technology¹. It intends to identify the social technology necessary for organizing knowledge in order to get a grip on social change. Social change is seldom directed by discretionary policy; its rate is too fast for most to comprehend, and it has consequences that too often are neither desirable nor just. Since the last century scholars have “accepted the idea that the circumstances of existence were continually changing, that society was necessarily in the process of making adaptions to the changing circumstances, and that intelligent adaptation would result in human progress.“² Yet most of our social science models have yet to incorporate these dynamics. To further our understanding, scientific modeling must be developed to reflect social change as the norm, not as the exception to equilibrium.     

When too little is as good as nothing at all: Rationing a disposable good among satiable people with acceptance thresholds

We study the problem of rationing a divisible good among a group of people. Each person?s preferences are characterized by an ideal amount that he would prefer to receive and a minimum quantity that he will accept: any amount less than this threshold is just as good as receiving nothing at all. Any amount beyond his ideal quantity has no effect on his welfare.We search for Pareto-efficient, strategy-proof, and envy-free rules. The definitions of these axioms carry through from the more commonly studied problem without disposability or acceptance thresholds. However, these are not compatible in the model that we study. We adapt the equal-division lower bound axiom and propose another fairness axiom called awardee-envy-freeness. Unfortunately, these are also incompatible with strategy-proofness. We characterize all of the Pareto-efficient rules that satisfy these two properties. We also characterize all Pareto-efficient, strategy-proof, and non-bossy rules.     

Independent electoral management bodies and international election observer missions: any impact on the observed level of democracy? A conceptual framework

What kind of institutions are needed to stabilize and foster democracy? Clearly elections are crucial and much of the institutional and legal surrounding of elections has been subject to research. Two institutional variables have been neglected though, specifically in empirical research: Electoral Management Bodies (EMBs) and International Observer Missions (EOMs). Can EMBs and EOMs foster free and fair elections? If yes, under what conditions? And what kind of competences are needed for them? We hypothesize that both can become crucial institutions for free and fair elections. Whereas independent central banks or audit courts control special issue areas in order to take certain decision out of the realm of politics, EMBs control the moment of the set-up of government—the election, when conflicts of interest of politicians are at its peak. Although other kinds of independent administrative agencies have been the subject of political science and economic research, EMBs and EOMs have also been neglected here. This article undertakes to outline a conceptual framework for testing various hypotheses on the institutional set-up of EMBs. Hypothesizing that de iure and de facto independence of EMBs foster fair elections, the detailed institutional set-up of EMBs as independent variable is outlined in order to test for the level of democracy as a dependent variable. Furthermore, the importance of EOMs as well as their interaction effect with EMBs is analyzed. Although by now EOMs are sent to almost any country with elections, their impact has not been analyzed in an encompassing way in spite of that the mission have intensified in their work, have become more costly and their verdicts are gaining ever more publicity.     

Zero-sum condition: A necessary and sufficient condition for a transitive voting system

A simple and quick way to ascertain whether or not any given majority voting system can always produce a transitive social preference orderings without imposing any restriction on the distribution of diverse individual preference orderings is to examine whether all individual voting (preference) vectors satisfy the Addition Rule or not. This conclusion was obtained by first reformulating the voting mechanism into that of a linear mapping from T^m defined by q = Σp_i. It was found that the subset P of T that can accommodate all possible individual preference ordering profiles and such that every sum vector q = Σ p_i of its member vectors p_i is contained in T can be expressed as P = {p: p∈ T, s(p) = 0}. It was also pointed out that this is equivalent to the requirement that all individual preference (voting) functions must satisfy the Addition Rule. Finally, Borda's Rule and Saposnik's Contributive Rule were shown to be examples of transitive voting rules which satisfy these necessary and sufficient conditions.     

The political economy of fiscal procyclicality

It is well-recognized that fiscal spending in developing countries tends to display significant procyclicality (increased spending during expansions and vice versa), in contravention of rational stabilization policy. Theoretical explanations have relied on either financial access or political-economic factors to justify this phenomenon. In this paper, we model the fiscal-output relationship as a dcc-garch process, and inquire whether debt or political economy constraints play a comparatively more important role in conditioning this correlation. Our evidence favors a positive effect from political economy, with weaker and more mixed results pertaining to financial access. Somewhat surprisingly, we also find that politics-induced procyclicality appears to be driven by advanced economies, and fiscal rules exacerbate procyclical tendencies.     

Recovery Growth and Some Peculiarities of the Contemporary Economic Situation in Russia

This article shows that after the collapse of the USSR the post-socialist countries all followed a similar path: after the transformation fall in social production they are now in the stage of growth. Moreover, this does not depend on particular circumstances connected with, for example, the absence or presence of exportable resources, government by one party or another or the accession of any particular politician to power. This growth, called recovery growth, by its nature inevitably fades, and in Russia its possibilities are practically exhausted. However, the question is not about driving up the pace of growth, which is dangerous. On the contrary, efforts must be concentrated on preparing and carrying out comprehensive, interconnected structural reforms, which will also ensure steady economic growth in the future. The country, the author says, must learn to develop using not so much instruments of state coercion as private incentives and initiative.     

On demand responsiveness in additive cost sharing

Under partial responsibility, the ranking of cost shares should never contradict that of demands.The Solidarity axiom says that if agent i demands more, j should not pay more if k pays less. It characterizes the quasi-proportional methods, sharing cost in proportion to `rescaled' demands.Full responsibility rules out cross-subsidization for additively separable costs. Restricting solidarity to submodular cost characterizes the fixed-flow methods, containing the Shapley-Shubik and serial methods.The quasi-proportional methods meet—but most fixed-flow methods fail—Group Monotonicity: if a group of agents increase their demands, not all of them pay less. Serial cost sharing is an exception.     

Judicial review and the power of the executive and legislative branches

The legal system can affect what policies a government can implement. In particular, when there is separation of powers, the strength of the judiciary to review and overturn actions of the executive and legislative branches can affect such things as how much redistribution these policy-making branches can do. Surprisingly, having judicial review helps the policy-making branches—the stronger is the judiciary, the more redistribution they are able to do. This occurs because the policy-making branches must make promises on and off the equilibrium path to individuals in order to make redistribution possible. However, in many circumstances, the government wants to renege on these promises, either to do more redistribution than promised or to not carry out severe threats against any individuals who lied. Judicial review can prevent reneging on these promises, thus making them credible.We develop this in the context of an optimal income tax model with a finite number of individuals where the government knows the exact distribution of types but not which individual is of which type. In this finite model, the government can detect misrevelation by even a single individual so that an individual׳s taxes can depend not just on one׳s own actions but also on others’ actions. Piketty (JET, 1993) showed that the government could implement any full-information Pareto optimal allocation if the government could commit to its announcements, even to infeasible allocations in circumstances after some individuals misreveal. We derive the sequential equilibrium allocations when individuals reveal their types by simple announcements when feasibility on and off the equilibrium path is imposed. Increasing the degree of judicial review expands the set of achievable allocations on the full-information utility possibility frontier. We also relate the different possible legal rules to different solution concepts in game theory.     

Coalitional Strategy-Proof House Allocation

We consider house allocation without endowments. We show that there is a unique maximal domain including all strict preferences on which efficiency and coalitional strategy-proofness are compatible. A preference relation belongs to the unique maximal domain if it is a strict descending ranking of houses to a certain house and indifference holds over it and the remaining houses. We also show that on this domain mixed dictator-pairwise-exchange rules are the only rules satisfying efficiency and coalitional strategy-proofness. Journal of Economic Literature Classification Numbers: C78, D63, D71.     

刑事程序失灵的危害及对策

刑事诉讼法修订后已经实施十多年了,但在司法实践中各个诉讼阶段的程序保障条款仍受到不同程度的架空和规避。刑事程序的价值必须得到重视。如果继续存在刑事程序失灵问题,那么有关刑事程序的一系列司法改革都是没有意义的。对此,可以加强公安司法人员程序意识的培养和教育,建立和完善刑事诉讼程序性裁判机制以及建立健全诉讼监督机制。     

Transaction Cost Economics, Antitrust Rules, and Remedies

This article discusses the application of transaction cost economics(TCE) to the specification of antitrust legal rules and antitrustremedies and explains why the application of TCE analysis maylead to very different legal rules and remedies from approachesthat ignore TCE considerations. Antitrust legal rules must besensitive to the attributes of the institutions we rely uponto enforce antitrust policies, the information and analyticalcapabilities these institutions possess, the uncertainties theymust confront in the diagnosis and mitigation of anticompetitivebehavior and market structures, and the associated costs oftype I and type II errors implied by alternative legal rulesand remedies. Modern imperfect competition theory that failsto take TCE principles into account is likely to lead to poorlegal rules and remedies. These conclusions are supported bya discussion of the Kodak case and its progeny and of the proposeddivestiture remedies approved by the District Court's decisionin the Microsoft case.     

Rebate rules in threshold public good provision

This paper considers how six alternative rebate rules affect voluntary contributions in a threshold public-good experiment. The rules differ by (1) whether an individual can receive a proportional rebate of excess contributions, a winner-takes-all of any excess contributions, or a full rebate of one's contribution in the event the public good is provided and excess contributions exist, and (2) whether the probability of receiving a rebate is proportional to an individual's contribution relative to total contributions or is a simple uniform probability distribution set by the number of contributors. The paper adds to the existing experimental economics literature on threshold public goods by investigating both aggregate and individual demand revelation under the winner-take-all and random full-rebate rules. Half of the rules (proportional rebate, winner-take-all with uniform probability among all group members, and random full-rebate with uniform probability) provide total contributions that nearly equal total benefits, while the rest (winner-take-all with proportional probability, winner-take-all with uniform probability among contributors only, and random full-rebate with proportional probability) exceed benefits by over 30%. Only the proportional rebate rule is found to achieve both aggregate and individual demand revelation. Our experimental results have implications for both fundraisers and valuation practitioners.     

Reasoning about rules

The Reason of Rules stands as a key text in the development of Constitutional Political Economy (CPE). While the achievements of the book in further shifting attention towards the constitutionalist perspective and providing a wide ranging discussion of the demand for rules are acknowledged, I suggest that the account of rules provided there and which still forms the core of much constitutionalist discussion in the Buchanan tradition seems limited. This paper revisits the analysis of rules in order to offer a broader perspective that is still consistent with the central ambitions of The Reason of Rules and CPE more generally.     

Regulating coexistence in Europe: Beware of the domino-effect!

In the literature spatial coexistence of genetically modified (GM) and non-GM crops is often regarded as a technical challenge, depending on spatial pollen dispersal and cross-pollination, temporal and spatial distribution and interaction of crops, separation distances and practical measures, but the interaction between economic incentives and costs of coexistence is poorly studied. Europe is currently struggling to implement coherent coexistence regulations in all EU Member States. Since the publication of the European Commission's guidelines in 2003, some Member States have developed, and others are still developing, a diversity of ex ante regulations and ex post liability rules on the coexistence of GM and non-GM crops. In this article, our attention is drawn to ex ante regulations. More specifically, we polarize two alternative ways of regulating spatial coexistence, i.e. rigid minimum distance rules, imposed on GM crop production, versus flexible segregation measures such as buffer zones, leaving more freedom of negotiation between neighboring farmers. We conduct simulations with the software ArcView® on a GIS dataset of a hypothetical case of GM herbicide tolerant oilseed rape cultivation in Central France. Our findings show that rigid coexistence rules, such as large distance requirements, may impose a severe burden on GM crop production in Europe. These rules are not proportional to the farmers' basic economic incentives for coexistence and hence not consistent with the objectives of the European Commission. More alarming, we show that in densely planted areas a domino-effect may occur, a theoretical possibility ignored in the literature. This effect raises coexistence costs and even adds to the non-proportionality of rigid coexistence regulations. Instead, we show that flexible measures would be preferable since they are proportional to the economic incentives for coexistence and, hence, less counterproductive for European agriculture.     

The communication requirements of efficient allocations and supporting prices

We show that any communication finding a value-maximizing allocation in a private-information economy must also discover supporting prices (in general personalized and nonlinear). In particular, to allocate L indivisible items between two agents, a price must be revealed for each of the 2^L-1 bundles. We prove that all monotonic prices for an agent must be used, hence exponential communication in L is needed. Furthermore, exponential communication is needed just to ensure a higher share of surplus than that realized by auctioning all items as a bundle, or even a higher expected surplus (for some probability distribution over valuations). When the utilities are submodular, efficiency still requires exponential communication (and fully polynomial approximation is impossible). When the items are identical, arbitrarily good approximation is obtained with exponentially less communication than exact efficiency.     

Love,war and cultures: a reply to my commentators

The purpose of this short reply is to consider the issue of the evolution of the exceptional human intellectual capabilities which has been the focus of the majority of the comments to my article “love, war and culture: an institutional approach to human evolution” all published in the April 2013 of the Journal of Bioeconomics. All the contributions are submitted to the test of two plausibility conditions. The first requires that the explanation of the emergence of human capabilities should rely on circumstances peculiar, or better unique, to human evolution. The second states that the explanation should not rely on factors that require the pre-existence of these capabilities. The claim, advanced in this short article, is that only the “sexual subsidy hypothesis” satisfies these conditions.     

Asymmetric rules for claims problems without homogeneity

We introduce a general class of rules for claims problems, called the difference rules, and demonstrate that a rule satisfies composition down and composition up if and only if it is a difference rule. We show that these rules are very simple to describe when there are two agents. In a variable population framework, we introduce a family of rules satisfying consistency, composition down, and composition up, which we term the logarithmic-proportional rules. These rules satisfy neither symmetry nor homogeneity.     

Fiscal decentralization,fiscal rules and fiscal discipline

Fiscal decentralization (FD) and fiscal rules (FR) are institutional mechanisms that are implemented by varying degrees in increasing number of countries. This paper investigates empirically the effect of FR on the effectiveness of FD in achieving fiscal discipline. Panel evidence strongly supports that balanced budget and expenditure rules help FD to achieve this goal, while debt rule has a direct disciplinary effect.     

Sharing the cost of redundant items

We ask how to share the cost of finitely many public goods (items) among users with different needs: some smaller subsets of items are enough to serve the needs of each user, yet the cost of all items must be covered, even if this entails inefficiently paying for redundant items. Typical examples are network connectivity problems when an existing (possibly inefficient) network must be maintained.We axiomatize a family cost ratios based on simple liability indices, one for each agent and for each item, measuring the relative worth of this item across agents, and generating cost allocation rules additive in costs.