Welfarist evaluations of decision rules for boards of representatives

We consider a decision board with representatives who vote on proposals on behalf of their constituencies. We look for decision rules that realize utilitarian and (welfarist) egalitarian ideals. We set up a simple model and obtain roughly the following results. If the interests of people from the same constituency are uncorrelated, then a weighted rule with square root weights does best in terms of both ideals. If there are perfect correlations, then the utilitarian ideal requires proportional weights, whereas the egalitarian ideal requires equal weights. We investigate correlations that are in between these extremes and provide analytic arguments to connect our results to Barberà and Jackson (J Polit Econ 114(2):317–339, 2006) and to Banzhaf voting power.     

Utilitarianism or welfarism: does it make a difference?

We show that it is possible to reconcile the utilitarian and welfarist principles under the requirement of unanimity provided that the set of profiles over which the consensus is attained is rich enough. More precisely, we identify a closedness condition which, if satisfied by a class of n-tuples of utility functions, guarantees that the rankings of social states induced by utilitarian and welfarist unanimities over that class are identical. We illustrate the importance of the result for the measurement of unidimensional as well as multidimensional inequalities from a dominance point of view.     

Optimality among restricted majority decision rules

When a group of decision makers with common interests faces a dichotomous choice, the task of deciding may be delegated to a committee consisting of a subset of the original group. This procedure is called a restricted majority decision rule. If each member of the original group is characterized by the probability of his deciding correctly, the expected utility from the decision is determined by which members are appointed to the committee. The conditions between enabling the comparison of alternative restricted majority rules are based on the voting profiles of the decision makers. The purpose of the current study is to propose an algorithm for identifying the optimal restricted majority rule amongst all restricted majority rules.I am indebted to Shmuel Nitzan for helpful comments and suggestions. All shortcomings are, of course, entirely my responsibility.     

The battle over the allocation of interstate waters : Two contending doctrines

The doctrinal basis for resolving interstate water disputes is in a confused state because of a recent Supreme Court decision which holds that market forces should determine the allocation of interstate ground waters even though the same court has consistently held that doctrine of equitable apportionment governs interstate surface waters. Although there are arguments for both approaches, the doctrine of equitable apportionment is preferable in that by allocating shares to individual states it provides stability for state and regional water planning while limiting the excesses of territorial chauvinism by requiring sharing. The market approach is a single edged sword which protects a state wanting to take water from another. Equitable apportionment, on the other hand, is a double edged sword which protects both states and allocates to each an equitable share of interstate water resources.     

Strategies in dynamic decision making - An experimental investigation of the rationality of decision behaviour

This paper is concerned with the question of how people tackle dynamic decision problems. It is on the interface between economics and psychology. Economic theory has a well-defined theory of how people should tackle such problems, but experimental evidence suggests that these are not empirically valid, and particularly that people find dynamic decision problems complex and cognitively demanding. Psychologists have long been aware of such issues and have developed a suite of theories to explain behaviour in such contexts, but these have been largely developed in a static context. This paper attempts to build a bridge between the two disciplines by exploring decision processes in a dynamic problem for which economic theory provides clear predictions. To aid us in this quest we use an experimental design which enables us to infer the decision rules that people are using. We identify a number of distinct decision heuristics, which could usefully be embodied into economic models of dynamic decision making.     

The Intersection of Business, State Government, and Special Interests in Federal Legislation: An Examination of Congressional Votes on the Road to Interstate Branching

The approval of interstate branching in 1994 created a significant structural change in the banking industry. The influences captured by 1991 congressional votes resulting in a red light for interstate branching are examined using public choice variables, state banking law variables, and variables characterizing the business of banking by states. Our research offers a methodology for modeling voting behavior in the presences of intra-industry conflicts and state versus federal government differences. We find that state and industry interests appear to influence votes more than political variables. (JEL G28 , D72 , L51 )     

Toward a theory of choice: Socially embedded preference construction

We present a boundedly rational model of choice that makes room for individual values and social influences in a process of preference construction. It takes from the subjective expected utility model the notion that people assess their options in terms of expected outcomes, referenced to personal values, but it presumes that individuals assess sharply truncated lists of relevant options, outcomes and values and apply a classification logic rather than a calculative one. Such a model is consistent with the nature of evolved human cognitive abilities. The model treats cognitive heuristics and various forms of social influence as determinants of selection of the truncated lists and it treats moral norms as classification rules activated when certain actions and outcomes become salient. The model has implications for understanding how political rhetoric affects individual and social preferences and how “hot cognitions” fit into human choice and for developing improved methods of collective decision making.     

Multi-profile welfarism: A generalization

This paper characterizes welfarist social evaluation in a multi-profile setting where, in addition to multiple utility profiles, there may be more than one profile of non-welfare information. We prove a new version of the welfarism theorem in this alternative framework, and we demonstrate that adding a plausible and weak anonymity property to the welfarism axioms generates welfarist social-evaluation orderings that are anonymous.This is a revised version of our earlier paper “Welfarism with multiple non-welfare profiles.” We thank François Maniquet, Kotaro Suzumura, John Weymark, an editor and two referees for comments and discussions. The paper was presented at the International Symposium on Intergenerational Equity in Tokyo, December 2001 and at the Meeting of the Society for Social Choice and Welfare in Pasadena, July 2002. Financial support through a grant from the Social Sciences and Humanities Research Council of Canada is gratefully acknowledged.     

What Drives Progressive Policy? Institutional Politics,Political Mediation,Policy Feedbacks,and Early U.S. Old‐Age Policy

What drives progressive public policy? Because progressive policy challenges the interests of powerful people and interests that dominate policy making, it is puzzling that progressive policy ever happens. This article addresses this question by modeling and appraising institutional political, political mediation, and policy feedback theories and models of progressive policy making. Institutional political theory focuses on political institutional conditions, bureaucratic development, election results, and public opinion. Political mediation theory holds that social movements can have influence over progressive policy under favorable political conditions. Policy feedback theory holds that programs will be self‐reinforcing under certain conditions. The article goes beyond previous research by including and analyzing public opinion in institutional political and political mediation models and addressing positive policy feedbacks. We appraise five models derived from these three theories through fuzzy set qualitative comparative analyses of the generosity of early old‐age policy across U.S. states at two key moments. We find some support for each theory, and the results suggest that they are complementary. Left regimes or social movements can initiate progressive policy, which can be reinforced for the long term through positive policy feedback mechanisms. We discuss the implications for current U.S. politics and for progressive policy elsewhere.     

Implications of the 65-mph speed limit for traffic safety.

This study evaluates the impact of the 65-mph speed limit on traffic safety. Using data for the years 1981 to 1995 for all 50 states, a pooled time series analysis is conducted. Separate models are estimated for state fatality rates on four categories of roads: rural interstate highways, rural noninterstate roads, all roads except for rural interstate highways, and all roads. It is reported that the 65-mph speed limit increased fatality rates on rural interstate highways but was correlated with a reduction in state fatality rates on the three other categories of roads.     

American Indian migration and economic opportunities

This article examines interstate migration and labor force participation among White, American Indian, and intermarried Indian/White couples in the US. The results show that endogamous American Indian couples are much less likely to change states of residence than are the other 2 groups of couples. The effect of interstate migration on labor force participation does not vary across the 3 groups of couples. The implications of these results for the assimilation and internal colonial models of race relations and for federal Indian policy are discussed     

Optional citizenship; articulation of interests and identities in naturalisations

Citizenship should be understood as a bundle of rights rather than as a legal expression of national membership. The citizenship status of immigrants is characterised by their human rights, their rights of external citizenship provided by sending countries, and their rights as resident aliens provided by receiving states. In this perspective naturalisation is only one amongst several options open to migrants to change and improve their legal position. The normative aspect of citizenship implies that general and basic rights should be distributed equally and universally within society. Raising the standard of alien rights, allowing for dual citizenship and conceiving of naturalisation as an individual option rather than as an obligation or as a discretionary decision of the receiving state would contribute to a more equal distribution of rights within societies of immigration. A model for explaining individual decision to naturalise is presented which is based on a combined analysis of interests and identities. The main factors that enter the model are rules applied by state authorities, social positions occupied by immigrants, the cost/benefit balance of rights in the transition to internal citizenship, and affiliations to different communities in the sending and the receiving state. The combination of rules, rights and social positions makes it possible to distinguish an objective value of internal citizenship for immigrants from transaction prices and subjective utilities. The main theoretical argument is that decisions can be influenced both by a perception of rational individual interests and by communal identities.     

Gerontocracy in a comparative perspective: Explaining why political leaders are (almost always) older than their constituents

Gerontocracy, in its narrowest sense, refers to political systems ruled by elderly people, whether de jure or de facto. Although formal gerontocratic rules are progressively disappearing, contemporary political systems are still governed by individuals who are significantly older than the mean voter. This article reviews existing explanations for the prevalence of gerontocracy. To summarize main findings, gerontocracy cannot be explained by the leadership qualities of older rulers: aging leaders do not perform better in office and voters seem to be aware of it. Instead, existing research suggests that gerontocracy can be explained by strategic considerations. In autocracies, the selectorate tends to choose aging leaders in order to reduce their expected tenure length. In democracies, voters are more likely to select experienced candidates, which they expect to be more effective at advancing the interests of their constituency: this premium put on experience mechanically lengthens political careers and increases the age of the average politician. Finally, older voters, which participate more in politics, tend to prefer older politicians, because they (correctly) expect them to better defend their own interests.     

HETEROGENEITY IN STATE‐DEPENDENT UTILITY: EVIDENCE FROM STRATEGIC SURVEYS

A standard result of life‐cycle models under uncertainty is that optimizing individuals equate the expected marginal utility of consumption across states of the world if insurance is available at actuarially fair rates. A small empirical literature has suggested that the marginal utility of consumption is lower in less healthy states. We use a novel survey‐based measure to document significant heterogeneity in health‐state dependence across individuals largely orthogonal to standard controls. We further show that individuals value unhealthy states of the world more when facing work‐limiting disabilities than when facing disabilities requiring long‐term care, and when facing physical rather than mental disabilities. (JEL D12, I10)     

The Integration of Interstate Migrants in India: A 7 State Policy Evaluation

Interstate migration in developing countries is a key income generating strategy for low-income households. In India, despite the importance of migration between states, interstate migrants continue to face significant integration barriers in their destination states. The impact of state borders on migration within India is significant and large. This study presents one of the first attempts at creating a set of indicators to understand the role of state-level policies for the integration of interstate migrants in a developing country. After illustrating the process behind the creation of this tool and the tool in itself, we compare seven of the major migrant destination states of India, based on their policy frameworks relevant to the integration of interstate migrants. Out of these states, we found that Kerala state is the most inclusive of interstate migrants but that overall, policymakers in the considered Indian states have a long way to go to improve the integration of interstate migrants.     

Dual criteria decisions

The most popular models of decision making use a single criterion to evaluate projects or lotteries. However, decision makers may actually consider multiple criteria when evaluating projects. We consider a dual criteria model from psychology. This model integrates the familiar tradeoffs between risk and utility that economists traditionally assume, allowance for rank-dependent decision weights, and consideration of income thresholds. We examine the issues involved in full maximum likelihood estimation of the model using observed choice data. We propose a general method for integrating the multiple criteria, using the logic of mixture models, which we believe is attractive from a decision-theoretic and statistical perspective. The model is applied to observed choices from a major natural experiment involving intrinsically dynamic choices over highly skewed outcomes. The evidence points to the clear role that income thresholds play in such decision making, but does not rule out a role for tradeoffs between risk and utility or probability weighting.     

Decision styles in transport mode choice

In this paper it is argued that travel demand analysis should pay more attention to recent findings in cognitive psychology. Especially the rules used by people to reach a decision should be the focus of research. As part of a Park-and-Ride study in the Netherlands a model which specifies the relation between attitudes and behaviour is tested. The hypothesized model is a multi-attribute utility model incorporating weights. Train-travellers are much better predicted by this model than car-travellers. Car-travellers appear to use a small set of important attributes, train-travellers on the contrary seem to weigh satisfaction scores over a broad range of attributes.As a hypothesis for further research a difference of decision style between car-travellers and train-travellers is suggested. The behaviour of train-travellers can be adequately described with a compensatory choice strategy, but for car-travellers a non-compensatory rule (conjunctive model) is perhaps more plausible.     

Selection of portfolios with risky and riskless assets: Experimental tests of two expected utility models

Two expected utility models are considered for a multi-period portfolio selection task of a special nature: the generalized logarithmic and negative exponential models. A weak version of the models is formulated in which the single parameter of each of the models is allowed to vary freely from one period to another in order to account for observed individual differences between subjects as well as trial-to-trial variations within subjects. Employing parameter-free predictions, the models are tested experimentally with individual data from six different groups varying from one another in the savings or return rates. The experimental results refute the two models conclusively. Alternative approaches to model portfolio selection behavior are mentioned briefly.     

Welfare, freedom of choice and composite utility in the logit model

Discrete choice models characterize the alternatives in the choice set by utilities/attributes. The decision making is described by a probability distribution over the choice set. In this paper we introduce a welfare measure based on expected payoff and expected freedom of choice for the simple one parameter logit model. In this case the welfare measure turns out to be the so called composite utility. This means that the composite utility can be interpreted as the combined benefit of expected payoff and expected freedom of choice. The proposed welfare measure can be extended to the linear-in-parameters logit model and nested logit models and others. The proposed welfare measure is formulated in terms of the choice probability distribution. It depends on the form of the probabilities, but not on any particular derivation of the distribution.     

The reinforcement axiom under sequential positional rules

The reinforcement axiom roughly states that when an alternative is selected by two different constituencies, it must also be selected by their union. Hare and Coombs rules are special cases of sequential positional voting rules, which are known to violate this axiom. In this article, we first show that reinforcement can be violated by all such rules. We then evaluate, by the use of Monte Carlo simulations and the Fishburn–Gehrlein technique, the proportion of profiles at which this phenomenon occurs.