Prior research on “strategic voting†has reached the conclusion that unanimity rule is uniquely bad: it results in destruction of information, and hence makes voters worse off. We show that this conclusion depends critically on the assumption that the issue being voted on is exogenous, i.e., independent of the voting rule used. We depart from the existing literature by endogenizing the proposal that is put to a vote, and establish that under many circumstances unanimity rule makes voters better off. Moreover, in some cases unanimity rule also makes the proposing individual better off even when he has diametrically opposing preferences. In this case, unanimity is the Pareto dominant voting rule. Voters prefer unanimity rule because it induces the proposing individual to make a more attractive proposal. The proposing individual prefers unanimity rule because the acceptance probabilities for moderate proposals are higher.
{"title":"Strategic Voting Over Strategic Proposals","authors":"P. Bond, Hülya Eraslan","doi":"10.2139/ssrn.961106","DOIUrl":"https://doi.org/10.2139/ssrn.961106","url":null,"abstract":"Prior research on “strategic voting†has reached the conclusion that unanimity rule is uniquely bad: it results in destruction of information, and hence makes voters worse off. We show that this conclusion depends critically on the assumption that the issue being voted on is exogenous, i.e., independent of the voting rule used. We depart from the existing literature by endogenizing the proposal that is put to a vote, and establish that under many circumstances unanimity rule makes voters better off. Moreover, in some cases unanimity rule also makes the proposing individual better off even when he has diametrically opposing preferences. In this case, unanimity is the Pareto dominant voting rule. Voters prefer unanimity rule because it induces the proposing individual to make a more attractive proposal. The proposing individual prefers unanimity rule because the acceptance probabilities for moderate proposals are higher.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130163172","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}
Pub Date : 2007-01-01DOI: 10.1108/01437720710830061
Síle O'dorchai, R. Plasman, F. Rycx
Economic theory advances a number of reasons for the existence of a wage gap between part-time and full-time workers. Empirical work has concentrated on the wage effects of part-time work for women. For men, much less empirical evidence exists, mainly because of lacking data. In this paper, we take advantage of access to unique harmonised matched employer-employee data (i.e. the 1995 European Structure of Earnings Survey) to investigate the magnitude and sources of the part-time wage penalty for male workers in six European countries (i.e. Belgium, Denmark, Ireland, Italy, Spain, and the UK). Findings show that the raw gap in hourly gross pay amounts to 16 per cent of male part-timer’s wage in Spain, to 24 per cent in Belgium, to 28 per cent in Denmark and Italy, to 67 per cent in the UK and to 149 per cent in Ireland. Human capital differences explain between 31 per cent of the observed wage gap in the UK and 71 per cent in Denmark. When a larger set of control variables is taken into account (including occupation, industry, firm size, and level of wage bargaining), a much smaller part of the gap remains unexplained by differences in observed characteristics (except in Italy). Overall, results suggest that policy initiatives to promote lifelong learning and training are of great importance to help part-timers catch up. Moreover, except for Italy, they point to a persisting problem of occupational and sectoral segregation between men working part-time and full-time which requires renewed policy attention.
{"title":"The Part-Time Wage Penalty in European Countries: How Large is it for Men?","authors":"Síle O'dorchai, R. Plasman, F. Rycx","doi":"10.1108/01437720710830061","DOIUrl":"https://doi.org/10.1108/01437720710830061","url":null,"abstract":"Economic theory advances a number of reasons for the existence of a wage gap between part-time and full-time workers. Empirical work has concentrated on the wage effects of part-time work for women. For men, much less empirical evidence exists, mainly because of lacking data. In this paper, we take advantage of access to unique harmonised matched employer-employee data (i.e. the 1995 European Structure of Earnings Survey) to investigate the magnitude and sources of the part-time wage penalty for male workers in six European countries (i.e. Belgium, Denmark, Ireland, Italy, Spain, and the UK). Findings show that the raw gap in hourly gross pay amounts to 16 per cent of male part-timer’s wage in Spain, to 24 per cent in Belgium, to 28 per cent in Denmark and Italy, to 67 per cent in the UK and to 149 per cent in Ireland. Human capital differences explain between 31 per cent of the observed wage gap in the UK and 71 per cent in Denmark. When a larger set of control variables is taken into account (including occupation, industry, firm size, and level of wage bargaining), a much smaller part of the gap remains unexplained by differences in observed characteristics (except in Italy). Overall, results suggest that policy initiatives to promote lifelong learning and training are of great importance to help part-timers catch up. Moreover, except for Italy, they point to a persisting problem of occupational and sectoral segregation between men working part-time and full-time which requires renewed policy attention.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"50 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134530565","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}
Pub Date : 2006-12-01DOI: 10.1111/j.1467-9442.2006.00461.x
D. Baron
This paper presents a complete information model of competitive lobbying in a majority-rule institution where lobbying consists of providing politically-valuable resources to legislators. Legislators have three roles. First, they act as allies or opponents in deciding whether to consider a lobbyist's offer. Second, they act as agenda-setters in deciding whether to bring a policy alternative to a vote. Third, they vote on the agenda. The stationary equilibria include minimal majorities and supermajorities and involve unilateral, counteractive and preemptive lobbying. Supermajorities are recruited either to influence agenda formation or to preempt the opposing lobbyist.
{"title":"Competitive Lobbying and Supermajorities in a Majority-Rule Institution","authors":"D. Baron","doi":"10.1111/j.1467-9442.2006.00461.x","DOIUrl":"https://doi.org/10.1111/j.1467-9442.2006.00461.x","url":null,"abstract":"This paper presents a complete information model of competitive lobbying in a majority-rule institution where lobbying consists of providing politically-valuable resources to legislators. Legislators have three roles. First, they act as allies or opponents in deciding whether to consider a lobbyist's offer. Second, they act as agenda-setters in deciding whether to bring a policy alternative to a vote. Third, they vote on the agenda. The stationary equilibria include minimal majorities and supermajorities and involve unilateral, counteractive and preemptive lobbying. Supermajorities are recruited either to influence agenda formation or to preempt the opposing lobbyist.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"14 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123656771","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 recent wake of financial scandals has prompted also in Italy a heated debate on how to regulate conflicts of interest emerging when banks simultaneously carry out commercial banking, on the one hand, and investment banking, on the other. Following this debate the article focuses its attention on US legal instruments that prevent and sanction abuses from conflicts of interests. Hence, it illustrates the guidelines of the US supervision system after the Gramm-Leach-Bliley Act (Paragraph 2) and the essential and most debated features of the US class action (Paragraph 3). The analysis carried out is the basis for a number of final remarks on the Italian initiatives concerning: (a) rules establishing organizational constraints in order to prevent conflicts of interest in universal banks; (b) proposed procedural rules which, aggregating lawsuits, aim at facilitating investors' access to justice. The evolution of the US regulatory framework about conflicts of interest in universal banks provides two useful indications. First, with regard to protection of investors through supervision over financial conglomerates, it suggests that in order to have efficient and competitive intermediaries it seems more appropriate to adopt a flexible approach, holding financial intermediaries responsible for the selection and implementation of the governance system that they deem more adequate to their specific structure. Second, with regard to protection of investors through an easy access to judicial redress, the US experience suggests to focus our attention on legal and market instruments that can help mitigate the risk that the collective action become an opportunity for the extraction of "private benefits" of various agents involved in the representation of investors' interests.
{"title":"Supervision and Class Action Against Conflicts of Interest in 'Universal Banking': US Experience vis-a-vis Recent Italian Initiatives","authors":"S. Cappiello","doi":"10.2139/ssrn.949896","DOIUrl":"https://doi.org/10.2139/ssrn.949896","url":null,"abstract":"The recent wake of financial scandals has prompted also in Italy a heated debate on how to regulate conflicts of interest emerging when banks simultaneously carry out commercial banking, on the one hand, and investment banking, on the other. Following this debate the article focuses its attention on US legal instruments that prevent and sanction abuses from conflicts of interests. Hence, it illustrates the guidelines of the US supervision system after the Gramm-Leach-Bliley Act (Paragraph 2) and the essential and most debated features of the US class action (Paragraph 3). The analysis carried out is the basis for a number of final remarks on the Italian initiatives concerning: (a) rules establishing organizational constraints in order to prevent conflicts of interest in universal banks; (b) proposed procedural rules which, aggregating lawsuits, aim at facilitating investors' access to justice. The evolution of the US regulatory framework about conflicts of interest in universal banks provides two useful indications. First, with regard to protection of investors through supervision over financial conglomerates, it suggests that in order to have efficient and competitive intermediaries it seems more appropriate to adopt a flexible approach, holding financial intermediaries responsible for the selection and implementation of the governance system that they deem more adequate to their specific structure. Second, with regard to protection of investors through an easy access to judicial redress, the US experience suggests to focus our attention on legal and market instruments that can help mitigate the risk that the collective action become an opportunity for the extraction of \"private benefits\" of various agents involved in the representation of investors' interests.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129723254","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}
Pub Date : 2006-12-01DOI: 10.1111/j.1467-9337.2006.00341.x
E. Pattaro
The Notebook Corner, edited by Enrico Pattaro, makes its first appearance here as a new section of Ratio Juris. This new section can be described in a sense as an offshoot of the project for A Treatise of Legal Philosophy and General Jurisprudence, a work still in progress composed of five theoretical volumes and six historical ones. The theoretical volumes receive a brief presentation in the paper immediately below, with a specific focus on Volume 1, entitled The Law and the Right: A Reappraisal of the Reality That Ought to Be. This volume is then discussed as well by Rosaria Conte and Cristiano Castelfronchi in the second paper of this Notebook Corner.
{"title":"A Treatise of Legal Philosophy and General Jurisprudence","authors":"E. Pattaro","doi":"10.1111/j.1467-9337.2006.00341.x","DOIUrl":"https://doi.org/10.1111/j.1467-9337.2006.00341.x","url":null,"abstract":"The Notebook Corner, edited by Enrico Pattaro, makes its first appearance here as a new section of Ratio Juris. This new section can be described in a sense as an offshoot of the project for A Treatise of Legal Philosophy and General Jurisprudence, a work still in progress composed of five theoretical volumes and six historical ones. The theoretical volumes receive a brief presentation in the paper immediately below, with a specific focus on Volume 1, entitled The Law and the Right: A Reappraisal of the Reality That Ought to Be. This volume is then discussed as well by Rosaria Conte and Cristiano Castelfronchi in the second paper of this Notebook Corner.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"38 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123569411","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}
Pub Date : 2006-12-01DOI: 10.1111/j.1467-9442.2006.00469.x
R. Myerson
The goals of democratic competition are not only to implement a majority's preference on policy questions, but also to provide a deterrent against corrupt abuse of power by political leaders. We consider a simple model of multicandidate elections in which different electoral systems can be compared according to these two criteria. Among a wide class of single-winner scoring rules, only approval voting is found to satisfy both effectiveness against corruption and majoritarianism for this model.
{"title":"Bipolar Multicandidate Elections with Corruption","authors":"R. Myerson","doi":"10.1111/j.1467-9442.2006.00469.x","DOIUrl":"https://doi.org/10.1111/j.1467-9442.2006.00469.x","url":null,"abstract":"The goals of democratic competition are not only to implement a majority's preference on policy questions, but also to provide a deterrent against corrupt abuse of power by political leaders. We consider a simple model of multicandidate elections in which different electoral systems can be compared according to these two criteria. Among a wide class of single-winner scoring rules, only approval voting is found to satisfy both effectiveness against corruption and majoritarianism for this model.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"133 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116403320","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}
Investors and regulators often treat agency and Treasury debt as substitutes. To evaluate the extent to which this is appropriate, we study the portion of offering yield spreads over Treasury yields not explained by standard issue and issuer characteristics for Government Sponsored Enterprise (GSE) and financial corporation debt floated during 1994-2004. GSE and corporate residual yield spreads strongly correlate, appear to reflect macroeconomic risk, and respond similarly during the Long Term Capital Management Crisis. Agency debt is surprisingly comparable to corporate debt in its response to macroeconomic risk and, on this dimension, is not a good substitute for Treasury debt.
{"title":"Is the Bright Line between Agency and Corporate Debt Dim?","authors":"Timothy R. Burch, Andrea Heuson","doi":"10.2139/SSRN.957336","DOIUrl":"https://doi.org/10.2139/SSRN.957336","url":null,"abstract":"Investors and regulators often treat agency and Treasury debt as substitutes. To evaluate the extent to which this is appropriate, we study the portion of offering yield spreads over Treasury yields not explained by standard issue and issuer characteristics for Government Sponsored Enterprise (GSE) and financial corporation debt floated during 1994-2004. GSE and corporate residual yield spreads strongly correlate, appear to reflect macroeconomic risk, and respond similarly during the Long Term Capital Management Crisis. Agency debt is surprisingly comparable to corporate debt in its response to macroeconomic risk and, on this dimension, is not a good substitute for Treasury debt.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"57 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122823444","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}
In this paper, we outline a baseline DSGE model which enables a straightforward analysis of wage bargaining between firms and households/unions in a model with both staggered prices and wages. Relying on empirical evidence, we assume that prices can be changed whenever wages are changed. This feature of the model greatly reduces the complexity of the price and wage setting decisions; specifically it removes complicated interdependencies between current and future price and wage decisions. In an application of the model we study the interaction between labor-market institutions and monetary policy choices, and the consequences for welfare outcomes. Specifically, we focus on the relative bargaining power of unions. We find that, for a standard specification of the monetary policy rule, welfare is substantially affected by the degree of relative bargaining power, but that this effect can be neutralized by optimal discretionary policy.
{"title":"Monetary Policy and Staggered Wage Bargaining When Prices are Sticky","authors":"Mikael Carlsson, Andreas Westermark","doi":"10.2139/ssrn.985913","DOIUrl":"https://doi.org/10.2139/ssrn.985913","url":null,"abstract":"In this paper, we outline a baseline DSGE model which enables a straightforward analysis of wage bargaining between firms and households/unions in a model with both staggered prices and wages. Relying on empirical evidence, we assume that prices can be changed whenever wages are changed. This feature of the model greatly reduces the complexity of the price and wage setting decisions; specifically it removes complicated interdependencies between current and future price and wage decisions. In an application of the model we study the interaction between labor-market institutions and monetary policy choices, and the consequences for welfare outcomes. Specifically, we focus on the relative bargaining power of unions. We find that, for a standard specification of the monetary policy rule, welfare is substantially affected by the degree of relative bargaining power, but that this effect can be neutralized by optimal discretionary policy.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"32 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132818885","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}
There is a tradition in modern business scholarship to see the corporation as a political actor. S.P. Waring argues that the modern business corporation is a polity, Herbert Kaufman views political theorists and management theorists as merely "different species of the same genus," while Peter Drucker postulates that even the most private of private enterprises is an organ of society and serves a social function. Such views justify corporations entering into more proactive relationships with organs of the society and with the agencies of governmental agencies regulating the economy. But politics operate within the organization as well. Nowhere are the political battle lines more sharply drawn than in the boardrooms of our modern corporations. Here boardroom politics find expression in the language of corporate governance. The battlefields include questions of executive compensation, conflicts of interest, absence of transparency, ineptitude and corruption. Many boards are inadequate for the tasks with which they are charged. The skirmishes that take place in the boardroom find debilitating replication in the rest of the organization, sometimes with multiplied effect. The capacity of the human resources manager to get the most from the human resources in her organization is seriously compromised by a dysfunctional board. The solution may mean that human resources mangers should now consider among their clients, not just the employees of the organization, but the board as well. To meet the challenges, human resources managers will have to consider training down and also up to the very top of the organizational hierarchy.
{"title":"Boardroom Politics: Implications for Human Resources Management","authors":"Derrick V. McKoy","doi":"10.2139/SSRN.954709","DOIUrl":"https://doi.org/10.2139/SSRN.954709","url":null,"abstract":"There is a tradition in modern business scholarship to see the corporation as a political actor. S.P. Waring argues that the modern business corporation is a polity, Herbert Kaufman views political theorists and management theorists as merely \"different species of the same genus,\" while Peter Drucker postulates that even the most private of private enterprises is an organ of society and serves a social function. Such views justify corporations entering into more proactive relationships with organs of the society and with the agencies of governmental agencies regulating the economy. But politics operate within the organization as well. Nowhere are the political battle lines more sharply drawn than in the boardrooms of our modern corporations. Here boardroom politics find expression in the language of corporate governance. The battlefields include questions of executive compensation, conflicts of interest, absence of transparency, ineptitude and corruption. Many boards are inadequate for the tasks with which they are charged. The skirmishes that take place in the boardroom find debilitating replication in the rest of the organization, sometimes with multiplied effect. The capacity of the human resources manager to get the most from the human resources in her organization is seriously compromised by a dysfunctional board. The solution may mean that human resources mangers should now consider among their clients, not just the employees of the organization, but the board as well. To meet the challenges, human resources managers will have to consider training down and also up to the very top of the organizational hierarchy.","PeriodicalId":367470,"journal":{"name":"Political Economy (Topic)","volume":"13 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-11-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131577854","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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