Several authors have argued that homeowners associations (HOAs) constitute an ideal institution for implementing Buchanan and Tullock's Calculus of Consent. HOAs provide collective goods and mitigate collective action problems. Developers offer constitutions ready-made, economizing on the decision-making costs which render unanimity infeasible. Competition will constrain real-estate developers to offer exactly those constitutions which consumers themselves would have crafted. However, critics of HOAs have voiced a variety of criticisms. For example, they allege that HOAs often suffer from a high degree of conflict and consumer dissatisfaction. I argue that government regulation – especially FHA mortgage underwriting – has homogenized HOAs, reducing the scope for competition and product differentiation. Developers often adopt legal boilerplate, lifting their HOA contracts from government handbooks. This reduced competition undercuts the economic justification of HOAs. To some degree, the flaws and shortcomings of HOAs may owe themselves to regulatory-induced homogeneity.
{"title":"Cookie Cutter Covenants: Regulation-Induced Homogeneity of Homeowners Associations","authors":"Michael Makovi","doi":"10.2139/ssrn.3194419","DOIUrl":"https://doi.org/10.2139/ssrn.3194419","url":null,"abstract":"Several authors have argued that homeowners associations (HOAs) constitute an ideal institution for implementing Buchanan and Tullock's Calculus of Consent. HOAs provide collective goods and mitigate collective action problems. Developers offer constitutions ready-made, economizing on the decision-making costs which render unanimity infeasible. Competition will constrain real-estate developers to offer exactly those constitutions which consumers themselves would have crafted. However, critics of HOAs have voiced a variety of criticisms. For example, they allege that HOAs often suffer from a high degree of conflict and consumer dissatisfaction. I argue that government regulation – especially FHA mortgage underwriting – has homogenized HOAs, reducing the scope for competition and product differentiation. Developers often adopt legal boilerplate, lifting their HOA contracts from government handbooks. This reduced competition undercuts the economic justification of HOAs. To some degree, the flaws and shortcomings of HOAs may owe themselves to regulatory-induced homogeneity.","PeriodicalId":365118,"journal":{"name":"ERN: Other Public Choice: Analysis of Collective Decision-Making (Topic)","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-06-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132841556","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Ron Allen and Mike Pardo have criticized probabilistic theories of legal proof and have presented an alternative “relative plausibility” theory of legal proof. Alas, both Allen and Pardo’s critique and their new approach are wrong. The remainder of this paper will describe their theory of relative plausibility, restate Allen and Pardo’s objections to subjective or Bayesian probability, and then answer each one of these objections. This paper will then explain why a Ramsian or subjective view of proof provides a better explanation of juridical proof than Allen and Pardo’s relative plausibility theory. At the end of the day, the key question is this: which of the two competing theories of juridical proof--i.e. subjective probability or relative plausibility--makes more sense, either as a descriptive or normative manner? In summary, because relative plausibility models can be Dutch-booked, and because juror evaluation of proof is an essentially subjective exercise, this paper shall defend a subjective conception of legal proof. Lastly, I shall describe a simple method for operationalizing subjective verdicts in civil cases.
{"title":"Subjective Probability and Legal Proof: A Ramsian Reply to Allen and Pardo","authors":"F. Guerra-Pujol","doi":"10.2139/ssrn.3181616","DOIUrl":"https://doi.org/10.2139/ssrn.3181616","url":null,"abstract":"Ron Allen and Mike Pardo have criticized probabilistic theories of legal proof and have presented an alternative “relative plausibility” theory of legal proof. Alas, both Allen and Pardo’s critique and their new approach are wrong. The remainder of this paper will describe their theory of relative plausibility, restate Allen and Pardo’s objections to subjective or Bayesian probability, and then answer each one of these objections. This paper will then explain why a Ramsian or subjective view of proof provides a better explanation of juridical proof than Allen and Pardo’s relative plausibility theory. At the end of the day, the key question is this: which of the two competing theories of juridical proof--i.e. subjective probability or relative plausibility--makes more sense, either as a descriptive or normative manner? In summary, because relative plausibility models can be Dutch-booked, and because juror evaluation of proof is an essentially subjective exercise, this paper shall defend a subjective conception of legal proof. Lastly, I shall describe a simple method for operationalizing subjective verdicts in civil cases.","PeriodicalId":365118,"journal":{"name":"ERN: Other Public Choice: Analysis of Collective Decision-Making (Topic)","volume":"68 4","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114120878","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The tools and concepts of the emerging field of complexity science—like agent-based modeling, network theory, and machine learning—can offer powerful insights to economists and crafters of public policy. Complexity science enables us to explicitly model relationships between individuals and institutions, asymmetric information and influence, the emergence of unplanned emergent social orders, and dynamically adaptive individuals. In the last few decades the tools of complexity science have been applied to the problem of public goods provision, correcting hypothesized behavioral biases, and raising the efficiency of policy implementation. These analyses often lack public choice perspectives, which may complicate and even obviate their findings when the designer becomes entangled with the complex structures in his models. Furthermore, there remains a good deal of work to be done to harmonize traditional public choice work with the tools and insights of complexity science. Uncharted waters must eventually be charted; we hope to begin in such a way that avoids the worst of the dragons.
{"title":"Complex and Entangled Public Policy: Here Be Dragons","authors":"Abigail N. Devereaux","doi":"10.2139/ssrn.3177464","DOIUrl":"https://doi.org/10.2139/ssrn.3177464","url":null,"abstract":"The tools and concepts of the emerging field of complexity science—like agent-based modeling, network theory, and machine learning—can offer powerful insights to economists and crafters of public policy. Complexity science enables us to explicitly model relationships between individuals and institutions, asymmetric information and influence, the emergence of unplanned emergent social orders, and dynamically adaptive individuals. In the last few decades the tools of complexity science have been applied to the problem of public goods provision, correcting hypothesized behavioral biases, and raising the efficiency of policy implementation. These analyses often lack public choice perspectives, which may complicate and even obviate their findings when the designer becomes entangled with the complex structures in his models. Furthermore, there remains a good deal of work to be done to harmonize traditional public choice work with the tools and insights of complexity science. Uncharted waters must eventually be charted; we hope to begin in such a way that avoids the worst of the dragons.","PeriodicalId":365118,"journal":{"name":"ERN: Other Public Choice: Analysis of Collective Decision-Making (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-05-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130094346","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper establishes the necessary and sufficient conditions for transitivity and quasi-transitivity under the method of majority decision. The terms 'necessary' and 'sufficient' here are used in the sense of logic, and not in the sense of usage common in the restricted domain literature. These necessary and sufficient conditions enable derivation of all existing theorems pertaining to transitivity and quasi-transitivity under the method of majority decision very simply, almost trivially.
{"title":"The Method of Majority Decision: The Necessary and Sufficient Conditions for Transitivity and Quasi-Transitivity","authors":"S. Jain","doi":"10.2139/ssrn.3127727","DOIUrl":"https://doi.org/10.2139/ssrn.3127727","url":null,"abstract":"This paper establishes the necessary and sufficient conditions for transitivity and quasi-transitivity under the method of majority decision. The terms 'necessary' and 'sufficient' here are used in the sense of logic, and not in the sense of usage common in the restricted domain literature. These necessary and sufficient conditions enable derivation of all existing theorems pertaining to transitivity and quasi-transitivity under the method of majority decision very simply, almost trivially.","PeriodicalId":365118,"journal":{"name":"ERN: Other Public Choice: Analysis of Collective Decision-Making (Topic)","volume":"6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2018-03-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130269695","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Despite some skepticism among experts about the effects of a minimum wage, there is remarkably widespread public support for such policies. Using representative survey data from 2015 and 2016, we investigate the subjective attitudes driving public support for Germany’s recent minimum wage reform. We find that socio-economic characteristics and political orientations explain a minor part of the variation in attitudes, whereas beliefs that the reform will bring positive redistributional effects and perceptions that it will help people to maintain or improve their overall economic situation (measured by living standards, income, hours worked, and job security) play a major role.
{"title":"Economic Aspects of Subjective Attitudes towards the Minimum Wage Reform","authors":"A. Fedorets, Carsten Schröder","doi":"10.2139/ssrn.3105415","DOIUrl":"https://doi.org/10.2139/ssrn.3105415","url":null,"abstract":"Despite some skepticism among experts about the effects of a minimum wage, there is remarkably widespread public support for such policies. Using representative survey data from 2015 and 2016, we investigate the subjective attitudes driving public support for Germany’s recent minimum wage reform. We find that socio-economic characteristics and political orientations explain a minor part of the variation in attitudes, whereas beliefs that the reform will bring positive redistributional effects and perceptions that it will help people to maintain or improve their overall economic situation (measured by living standards, income, hours worked, and job security) play a major role.","PeriodicalId":365118,"journal":{"name":"ERN: Other Public Choice: Analysis of Collective Decision-Making (Topic)","volume":"34 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130476049","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The liberal international order seems to be resting on very shaky ground. While the election of Donald Trump and the Brexit vote were startling shocks, these developments represented only the most extreme outcomes of anti-globalization and anti-establishment politics that had been growing for some time. As analysts today struggle to understand these complex phenomena, they most often divide their explanations into two opposing camps: identity politics versus economic anxiety. I argue that we need instead to understand the new political cleavages in terms of the interactions between economic circumstances and culture, rather than thinking of them as competing explanations. I offer a new way of theorizing about where interests come from, one that focuses on the stark geographic cleavages of the new post-industrial economy and how these material circumstances have created polarized everyday lived experiences. Although I focus on the US case in this short memo, this emphasis on the cultural class cleavages created by the twenty-first century economy should also illuminate some of the drivers for Brexit and the rise of populist politics more generally.
{"title":"Constructing Economic Interests: Geography, Culture, & the Liberal International Order","authors":"K. McNamara","doi":"10.2139/SSRN.3057049","DOIUrl":"https://doi.org/10.2139/SSRN.3057049","url":null,"abstract":"The liberal international order seems to be resting on very shaky ground. While the election of Donald Trump and the Brexit vote were startling shocks, these developments represented only the most extreme outcomes of anti-globalization and anti-establishment politics that had been growing for some time. As analysts today struggle to understand these complex phenomena, they most often divide their explanations into two opposing camps: identity politics versus economic anxiety. \u0000I argue that we need instead to understand the new political cleavages in terms of the interactions between economic circumstances and culture, rather than thinking of them as competing explanations. I offer a new way of theorizing about where interests come from, one that focuses on the stark geographic cleavages of the new post-industrial economy and how these material circumstances have created polarized everyday lived experiences. Although I focus on the US case in this short memo, this emphasis on the cultural class cleavages created by the twenty-first century economy should also illuminate some of the drivers for Brexit and the rise of populist politics more generally.","PeriodicalId":365118,"journal":{"name":"ERN: Other Public Choice: Analysis of Collective Decision-Making (Topic)","volume":"67 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-10-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128557416","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Exploiting a novel panel dataset of consumer financial transactions in Singapore, we examine the consumption response to an anticipated, transitory price shock generated by the nation-wide annual sale event. Consistent with theory, we find inter-temporal substitution where consumers spend less immediately before the event, and cross-categorical substitution behavior where consumers decrease spending in items unaffected by the sale event. However, liquidity constrained consumers responded to the price change with significant spending increase and little substitution behavior. Moreover, consumers pay by credit card first and switch to debit card afterwards, further highlighting the role of liquidity in understanding the consumption response.
{"title":"Consumption Response to Temporary Price Shock: Evidence from Singapore's Annual Sale Event","authors":"Sumit Agarwal, Kang Mo Koo, Wenlan Qian","doi":"10.2139/ssrn.3035787","DOIUrl":"https://doi.org/10.2139/ssrn.3035787","url":null,"abstract":"Exploiting a novel panel dataset of consumer financial transactions in Singapore, we examine the consumption response to an anticipated, transitory price shock generated by the nation-wide annual sale event. Consistent with theory, we find inter-temporal substitution where consumers spend less immediately before the event, and cross-categorical substitution behavior where consumers decrease spending in items unaffected by the sale event. However, liquidity constrained consumers responded to the price change with significant spending increase and little substitution behavior. Moreover, consumers pay by credit card first and switch to debit card afterwards, further highlighting the role of liquidity in understanding the consumption response.","PeriodicalId":365118,"journal":{"name":"ERN: Other Public Choice: Analysis of Collective Decision-Making (Topic)","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-09-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132560342","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines whether an institution has a differing impact on cooperation if it is introduced by a representative of the affected parties rather than exogenously imposed. The experimental design is able to control for selection effects arising from the democratic policy choice. I find evidence of a large democracy premium in the sense that endogenously implemented institutions lead to more cooperation than iden- tical exogenous institutions. Especially the subjects who initially did not prefer the policy comply if it was brought about by an elected representative. The results have implications for the analysis of decision-making processes and policy recommendations in general.
{"title":"Institutional Choice and Cooperation in Representative Democracies: An Experimental Approach","authors":"Fanny E. Schories","doi":"10.2139/ssrn.2951008","DOIUrl":"https://doi.org/10.2139/ssrn.2951008","url":null,"abstract":"This paper examines whether an institution has a differing impact on cooperation if it is introduced by a representative of the affected parties rather than exogenously imposed. The experimental design is able to control for selection effects arising from the democratic policy choice. I find evidence of a large democracy premium in the sense that endogenously implemented institutions lead to more cooperation than iden- tical exogenous institutions. Especially the subjects who initially did not prefer the policy comply if it was brought about by an elected representative. The results have implications for the analysis of decision-making processes and policy recommendations in general.","PeriodicalId":365118,"journal":{"name":"ERN: Other Public Choice: Analysis of Collective Decision-Making (Topic)","volume":"50 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-04-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124111747","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
R. Enikolopov, Alexey Makarin, M. Petrova, L. Polishchuk
Social motivation plays a vital role in electoral participation, political contributions, and charitable donations. We examine the role of social image concerns in the decision to participate in political protests. We develop a dynamic model of protest participation, where socially-minded individuals use protest participation to signal their type. We then test predictions of the model using individual and city-level data from 2011-2012 political protests in Russia. We report several findings, consistent with the theory. First, list experiment results from a specially conducted survey imply that social signaling motives indeed were important for the decision to participate in protests. Second, participation in online protest groups increased offline protest participation. Third, participation in protests was associated with higher social capital in a city. Finally, the importance of both online social networks and offline social capital for protest participation diminished over time.
{"title":"Social Image, Networks, and Protest Participation","authors":"R. Enikolopov, Alexey Makarin, M. Petrova, L. Polishchuk","doi":"10.2139/ssrn.2940171","DOIUrl":"https://doi.org/10.2139/ssrn.2940171","url":null,"abstract":"Social motivation plays a vital role in electoral participation, political contributions, and charitable donations. We examine the role of social image concerns in the decision to participate in political protests. We develop a dynamic model of protest participation, where socially-minded individuals use protest participation to signal their type. We then test predictions of the model using individual and city-level data from 2011-2012 political protests in Russia. We report several findings, consistent with the theory. First, list experiment results from a specially conducted survey imply that social signaling motives indeed were important for the decision to participate in protests. Second, participation in online protest groups increased offline protest participation. Third, participation in protests was associated with higher social capital in a city. Finally, the importance of both online social networks and offline social capital for protest participation diminished over time.","PeriodicalId":365118,"journal":{"name":"ERN: Other Public Choice: Analysis of Collective Decision-Making (Topic)","volume":"83 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132294328","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Past research has shown that people often take punitive actions towards norm violators even when they are not directly involved in transactions. However, it at the same time suggests that such third-party punishment may not be strong enough to enforce cooperation norms in dilemma situations. This paper experimentally compares the effectiveness of third-party punishment between different enforcement formats. Consistent with past studies, our data shows that having an individual third-party punisher in a group does not make one’s defection materially unbeneficial because of the weak punishment intensity. It also shows that third-party punishment is not effective when two individuals form a pair as a punisher and jointly decide how strong third-party punishment they impose. However, third-party punishment can be sufficiently strong to enforce cooperation norms when a third-party punisher’s action choice is made known to another individual third-party punisher in a different group, or when there are two independent individual third-party players in a group.
{"title":"Altruistic Norm Enforcement and Decision-Making Format in a Dilemma: Experimental Evidence","authors":"Kenju Kamei","doi":"10.2139/ssrn.2912543","DOIUrl":"https://doi.org/10.2139/ssrn.2912543","url":null,"abstract":"Past research has shown that people often take punitive actions towards norm violators even when they are not directly involved in transactions. However, it at the same time suggests that such third-party punishment may not be strong enough to enforce cooperation norms in dilemma situations. This paper experimentally compares the effectiveness of third-party punishment between different enforcement formats. Consistent with past studies, our data shows that having an individual third-party punisher in a group does not make one’s defection materially unbeneficial because of the weak punishment intensity. It also shows that third-party punishment is not effective when two individuals form a pair as a punisher and jointly decide how strong third-party punishment they impose. However, third-party punishment can be sufficiently strong to enforce cooperation norms when a third-party punisher’s action choice is made known to another individual third-party punisher in a different group, or when there are two independent individual third-party players in a group.","PeriodicalId":365118,"journal":{"name":"ERN: Other Public Choice: Analysis of Collective Decision-Making (Topic)","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-02-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121909639","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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