zero tolerance policies do they inhibit or stimulate illicit drug consumption some have suggested fighting the drug problem with so called zero tolerance policies that impose stiff sanctions for possession of even trace amounts of illicit drugs such policies can swamp the criminal justice system and violate the principle that the punishment should fit the crime but these objections have often been suppressed by an overriding desire to minimize consumption this paper argues to the contrary that under plausible conditions zero tolerance policies may actually encourage controlled users to consume more not less than they would if the punishment increased in proportion to the quantity possessed at the time of arrest this result holds even if for every quantity the punishment under the proportional policy is less than or equal to that under the zero tolerance policy the argument relies on a mathematical model that describes how a typical controlled user s purchasing habits are affected by the punishment anticipated as a function of the quantity possessed a variety of possible p

approval voting borda winners and condorcet winners evidence from seven elections we analyze 10 three candidate elections and mock elections conducted under approval voting av using a method developed by falmagne and regenwetter 1996 that allows us to construct a distribution of rank orders from subset choice data the elections were held by the institute of management science the mathematical association of america several professional organizations in britain and the institute of electrical and electronics engineers seven of the 10 elections satisfy the conditions under which the falmagne regenwetter method is suitable for these elections we recreate possible underlying preferences of the electorate on the basis of these distributions of preferences we find strong evidence that av would have selected condorcet winners when they exist and would have always selected the borda winner thus we find that av is not just simple to use but also gives rise to outcomes that well reflect voter preferences our results also have an important implication for the general study of social choice processes they suggest that transitive majority orderings may be expected in real world settings more often then the formal social choice literature suggests in six out of seven data sets we find social welfare orders only one data set generates cycles anywhere in the solution space

nash solution and timing of bargaining abstract we analyze bargaining problems with unknown feasible sets and known disagreement points two characterizations of the nash solution are presented by formulating axioms specifying how bargaining solutions should respond under such circumstances

the politics of flatland a version of the median voter theorem holds for two dimensional spatial models in which voters regard the two dimensions as economic goods or goodlike activities and in which the set of feasible outcomes is constrained by budget or technology although mathematically trivial this fact has widespread analytical uses after arguing that our two dimensional model with its stability property fits a number of important and general policy areas we use our analysis to address some prominent theoretical issues

an empirical example of the condorcet paradox of voting in a large electorate social choice theory suggests that the occurrence of cyclical collective preferences should be a widespread phenomenon especially in large groups of decision makers however empirical research has so far failed to produce evidence of the existence of many real world examples of such and none in large electorates this paper demonstrates the existence of a real cyclical majority in a poll of danish voters preferred prime minister using pair wise comparisons this result is compared with those of a similar poll but by using different voting methods each resulting in different choices the example demonstrates the empirical reality of cyclical collective preferences and the importance of the choice of institutions

independence of irrelevant alternatives and revealed group preferences it is shown that a pareto optimal and continuous single valued choice function defined on the compact convex subsets of the positive orthant of the n dimensional euclidean space maximizes a real valued function if and only if it satisfies the independence of irrelevant alternatives condition if n 2 and the strong axiom of revealed preference otherwise the results can be applied to consumer demand theory to deal with nonlinear budget sets and to bargaining game theory to generalize the nash bargaining solution

irrigation districts and water markets an application of cooperative decision making theory water supply organizations control a large portion of agricultural water rights in the western u s this paper applies cooperative and club theory models to analyze the response of these organizations to potential rural to urban water transfers application of the models is to a proposed water trade between southern california s imperial irrigation district and metropolitan water district the analysis reveals that substantial intraorganizational conflict can emerge in response to specific transfer proposals and this conflict may be sufficient to defeat or delay otherwise beneficial transfers poorly defined property rights and a failure to align these rights with operational control in the water supply organization are pinpointed as key sources of conflict

alcohol consumption during prohibition we estimate the consumption of alcohol during prohibition using mortality mental health and crime statistics we find that alcohol consumption fell sharply at the beginning of prohibition to approximately 30 percent of its pre prohibition level during the next several years however alcohol consumption increased sharply to about 60 70 percent of its pre prohibition level the level of consumption was virtually the same immediately after prohibition as during the latter part of prohibition although consumption increased to approximately its pre prohibition level during the subsequent decade this abstract was borrowed from another version of this item

on weighted kalai samet solutions for non transferable utility coalitional form games abstract we investigate the implications of the axiom of coalitional concavity for non transferable utility coalitional form games this axiom says that if the feasible set of some coalition is uncertain whereas the feasible sets of other coalitions are known then all players in the coalition with the uncertain feasible set should weakly benefit from reaching a compromise before the uncertainty is resolved by imposing this axiom in addition to other minor axioms we characterize the weighted kalai samet econometrica 53 1985 307 solutions these solutions coincide with the weighted egalitarian solutions on the domain of bargaining problems and with the weighted shapley values on the domain of transferable utility coalitional form games

generalized utilitarianism and harsanyi s impartial observer theorem harsanyi s impartial observer must consider two types of lotteries imaginary identity lotteries accidents of birth that she faces as herself and the real outcome lotteries life chances to be faced by the individuals she imagines becoming if we maintain a distinction between identity and outcome lotteries then harsanyi like axioms yield generalized utilitarianism and allow us to accommodate concerns about different individuals risk attitudes and concerns about fairness requiring an impartial observer to be indifferent as to which individual should face similar risks restricts her social welfare function but still allows her to accommodate fairness requiring an impartial observer to be indifferent between identity and outcome lotteries however forces her to ignore both fairness and different risk attitudes and yields a new axiomatization of harsanyi s utilitarianism

the supermajority core of the us senate and the failure to join the league of nations the failure of the united states to join the league of nations is often considered to be an outcome of isolationist influence the supermajority requirement of treaty ratification in the us senate also is blamed for allowing a minority of isolationists to block the will of the majority that supported the treaty to determine the cause of the failure i analyze the senate debate over the treaty using the concepts of the supermajority core and supermajority winset using all 157 votes on the treaty i estimate senatorial positions and the locations of both the status quo and the treaty on the same metric space from this analysis i find that isolationists were not influential enough to block the ratification instead president wilson s unwillingness to compromise is found to have played a critical role in the treaty s defeat the treaty s defeat thus was not an indication of the power of isolationism this study contributes to the growing body of literature that debunks claims about the dominance of isolationism in the interwar period at the same time the paper demonstrates how the core and winset concepts can be useful in answering substantive collective choice questions

simultaneity of issues and additivity in bargaining on etudie la negociation simultanee sur plusieurs resultats par deux negociateurs en prenant les sommes des jeux de negociation et en exigeant des solutions de negociation satisfaisant certains axiomes de super additivite

utilitarianism egalitarianism and the timing effect in social choice problems two theorems are derived about social choice functions which are defined on comprehensive convex subsets of utility allocation space theorem 1 asserts that a linearity condition together with pareto optimality implies that a social choice function must be utilitarian theorem 2 asserts that a concavity condition together with pareto optimality and independence of irrelevant alternatives implies that a social choice function must be either utilitarian or egalitarian these linearity and concavity conditions have natural interpretations in terms of the timing of social welfare analysis before or after the resolution of uncertainties and its impact on social choices

would harassing drug users work when harassed users adopt new ways of transaction supply changes in predictable ways this linkage between demand and supply can explain a number of puzzling consequences of the decriminalization of marijuana and the war on heroin and cocaine

on the empirical relevance of condorcet s paradox condorcet s paradox occurs when there is no alternative that beats every other alternative by majority the paradox may pose real problems to democratic decision making such as decision deadlocks and democratic paralysis however its relevance has been discussed again and again since the celebrated works of arrow social choice and individual values 1963 and black the theory of committees and elections 1958 the discussion varies from one extreme to the other from very relevant to practically irrelevant this paper tries to bring more clarity to the discussion by reviewing the literature on the empirical relevance of condorcet s paradox since a definition of the paradox for even numbers of voters and alternatives and for weak voter preferences is missing in the literature we first define the paradox clearly and simply then three topics are investigated namely domain conditions culture and the likelihood of the paradox and the empirical detection of the paradox domain conditions express regularities in voter preference profiles that prevent the paradox frequent observations of these domain conditions would make condorcet s paradox empirically less important cultures define probability distributions over the set of voter preferences observation of cultures might be a first step to indicate the relevance of the paradox the empirical detection of the paradox speaks for itself we will try to identify the number of observations of the paradox so far the overall conclusion is that the empirical relevance of condorcet s paradox is still unsettled

majority rule outcomes and the structure of debate in one issue at a time decision making in many group decision making situations such as faculty hiring decisions outcomes are often arrived at by deciding one issue at a time e g first rank then subfield it is well known that procedures limiting votes to separate orthogonal dimensions always result in a unique outcome at the generalized median the median of each separate issue dimension often however there is conflict within groups over what ought to be the relevant orthogonal dimensions within which choices will be made we show that the way in which debate is structured i e the way in which the dimensions of choice are specified can have important consequences for what outcome gets chosen however we also show that the range of outcomes that could arise from alternative structurings of the decision process is bounded these bounds are expressed relative to the yolk a sphere located centrally in the pareto set whose existence was first noted by tullock 1967 262 and whose properties have recently been developed by mckelvey 1986 and feld et al 1987 we find that in m orthogonal dimensions the feasible outcomes must lie within mathtype mtef 2 1 feaafiart1ev1aaatcvaufebsjuyzl2yd9gzlbvynv2caerbulwbln hiov2dgi1btfmbaexatlxbi9gbaerbd9wdylwzybitldharqqtubsr 4rnchbgeagqivu0je9sqqrpepc0xbbl8f4rqqrffpeea0xe9lq jc9 vqaqpepm0xbba9pwe9q8fs0 yqaqpepae9pg0firpepekkfr0xfr x fr xb9adbaqaaegacigaaiaabeqaamaabaabaagcbawaaoaaaeaaca qgtbaaleqaaaaa 36f8 sqrt text m radii of the center of the yolk

super additivity and concavity are equivalent for pareto optimal n agent bargaining solutions abstract we show that for pareto optimal n player bargaining solutions the conditions of super additivity and concavity are equivalent further either condition implies homogeneity

cooperative bargaining foundations of the shapley shubik index abstract in a recent paper we provide an interpretation of the shapley shubik index as a measure of the bargaining power that a voting rule gives to each member of a committee negotiating in search of consensus it is assumed that negotiation takes place under the condition that every winning coalition can impose any agreement in this paper we further investigate the axiomatic foundations of this interpretation of the shapley shubik index to this end a wider framework admitting random voting rules is considered

covering dominance and institution free properties of social change this paper shows that different institutional structures for aggregation of preferences under majority rule may generate social choices that are quite similar so that the actual social choice may be rather insensitive to the choice of institutional rules specifically in a multidimensional setting where all voters have strictly quasi concave preferences it is shown that the uncovered set contains the outcomes that would arise from equilibrium behavior under three different institutional settings the three institutional settings are two candidate competition in a large electorate cooperative behavior in small committees and sophisticated voting behavior in a legislative environment where the agenda is determined endogenously because of its apparent institution free properties the uncovered set may provide a useful generalization of the core when a core does not exist a general existence theorem for the uncovered set is proven and for the downsian case bounds for the uncovered set are computed these bounds show that the uncovered set is centered around a generalized median set whose size is a measure of the degree of symmetry of the voter ideal points

a theory of rational addiction we develop a theory of rational addiction in which rationality means a consistent plan to maximize utility over time strong addiction to a good requires a big effect of past consumption of the good on current consumption such powerful complementarities cause some steady states to be unstable they are an important part of our analysis because even small deviations from the consumption at an unstable steady state can lead to large cumulative rises over time in addictive consumption or to rapid falls in consumption to abstention our theory also implies that cold turkey is used to end strong addictions that addicts often go on binges that addicts respond more to permanent than to temporary changes in prices of addictive goods and that anxiety and tensions can precipitate an addiction

quadratic social welfare functions john harsanyi has provided an intriguing argument that social welfare can be expressed as a weighted sum of individual utilities his theorem has been criticized on the grounds that a central axiom that social preference satisfies the independence axiom has the morally unacceptable implication that the process of choice and considerations of ex ante fairness are of no importance this paper presents a variation of harsanyi s theorem in which the axioms are compatible with a concern for ex ante fairness the implied mathematical form for social welfare is a strictly quasi concave and quadratic function of individual utilities

trade policy and the legalization of drugs a prominent suggestion in recent debate on the u s drug problem has been to legalize the use of drugs such as cocaine the debate about legalization however seems very polarized at one extreme opponents base their position on a fear that drug use would increase dramatically with consequent individual and social problems 3 13 14 at the other extreme proponents of legalization contemplate a never ending increasingly costly but inevitably futile war on drugs and see legalization as a means of both reducing the costs of policing and reducing the violence involved in the distribution of drugs legalizing cocaine would remove its profitable allure and this violent rent seeking behavior would diminish 5 there seems to be no middle ground in the debate between total prohibition and unregulated legalization an economist s solution would involve a compromise that trades off costs and benefits of legalization and taxation at the margin making the issue an empirical matter miron provides an excellent informal discussion of some of the economic issues involved 8 the public debate however and the u s position of zero tolerance clearly do not admit such tradeoffs accordingly the present paper focuses on legalization and taxation that purports to leave consumption unchanged from its prohibition levels a policy involving no tradeoffs between greater use and decreased enforcement

pluralism and social choice pluralist political theory identifies certain patterns of political preferences as promoting the stability of democratic political systems and others as threatening to such stability social choice theory likewise identifies certain patterns of political preferences as leading to stability in social choice under majority rule and related collective decision rules and other patterns as leading to unstable social choice but the preference patterns identified by pluralist theory as promoting stability are essentially those identified by social choice theory as entailing instability thus the notions of stability and the implicit normative criteria associated with the two theories are very close to being logically incompatible this incompatibility suggests that the social choice ideal of collective rationality may not be one that we should endorse indeed the generic instability of the pluralist political process and its consequent collective irrationality may contribute to the stability of pluralist political systems

procrastination and obedience in this lecture i shall focus on situations involving repeated decisions with time inconsistent behavior although each choice may be close to maximizing and therefore result in only small losses the cumulative effect of a series of repeated errors may be quite large thus in my examples decision makers are quite close to the intelligent well informed individuals usually assumed in economic analysis but cumulatively they make seriously wrong decisions that do not occur in standard textbook economics this lecture discusses and illustrates several pathological modes of individual and group behavior procrastination in decision making undue obedience to authority membership of seemingly normal individuals in deviant cult groups and escalation of commitment to courses of action that are clearly unwise in each case individuals choose a series of current actions without fully appreciating how those actions will affect future perceptions and behavior the standard assumption of rational forwardlooking utility maximizing is violated the nonindependence of errors in decision making in the series of decisions can be explained with the concept from cognitive psychology of undue salience or vividness for example present benefits and costs may have undue salience relative to future costs

no profitable decompositions in quasi linear allocation problems abstract we study the problem of allocating a bundle of perfectly divisible private goods from an axiomatic point of view in situations where compensations can be made through monetary transfers the key property we impose on the allocation rule requires that no agent should be able to gain by decomposing the problem into sequences of subproblems combined with additional standard properties it leads to a characterization of the rule that shares the total surplus equally hence a traditional welfarist rule emerges as the unique consequence of our axioms phrased in a natural economic environment

condorcet winners and the paradox of voting probability calculations for weak preference orders choice literature given this problem social choice theorists have attempted to estimate the probability of condorcet winners given certain empirical or theoretical conditions we shall estimate the probabilities of condorcet winners and intransitive aggregate orders for various numbers of individuals with strong or weak preference orders across various numbers of alternatives we find using computer simulation a stark contrast between these estimates assuming strong individual preferences and the estimates allowing for individuals indifference between pairs of alternatives in contrast to earlier work which depends on the strong preference assumption we suggest that the problem is most acute for small committee decision making and least acute for mass elections with few alternatives

the nature of utility functions in mass publics survey data are used to test the basic tenets of rational choice theory we find that 1 voters preferences are orderly but voters do not always have preferences when the perceived difference between two candidates is below some threshold voters are indifferent between them 2 most voters choose candidates whose issue positions are congruent with their own 3 lack of knowledge about candidates affects choice and utility through two routes indifference and risk aversion most voters have highly structured utility functions but the thresholds and risk aversion in these functions place relatively unknown candidates at a disadvantage in presidential primaries and other electoral situations moreover the importance of knowledge in these functions suggests that social choice theorists must take seriously the classic concerns of public opinion research the operation of the media and the dynamics of information in elections

the economic case against drug prohibition this paper discusses the costs and benefits of drug prohibition it offers a detailed outline of the economic consequences of drug prohibition and a systematic analysis of the relevant empirical evidence the bottom line is that a relatively free market in drugs is likely to be vastly superior to the current policy of prohibition

paradoxical effects of drug policy in a model with imperfect competition and switching costs this paper presents a stylized model of the market for hard drugs we assume that there is imperfect competition that the demand side is dominated by addicts and that the presence of switching costs leads to consumer loyalty drug policies affect the values of the parameters of the model including the degree of consumer loyalty and the static price elasticity of demand taking into account these effects it is shown that tough policies may lead to an increase in the marketing activities by suppliers and cause a long run increase in the number of addicts and total consumption

nash solution and uncertain disagreement points abstract we analyze bargaining problems with known feasible sets but uncertain disagreement points we investigate the existence of solutions such that under reasonably restricted circumstances all agents be as well off by reaching an agreement today as they would be by waiting until the uncertainty is resolved we use this requirement together with a few other commonly used conditions to characterize the nash solution

voters party preferences in multiparty systems and their coalitional and spatial implications germany after unification how should party preferences of voters in a multiparty system be measured compared and aggregated we use city block metric of distances between the pairwise comparisons of the five german parties 1995 survey data for west and east germany neither in west nor in east germany a party gains the absolute majority of voters preferences we derive coalition preferences from the party rankings the governing coalition of cdu csu and fdp is not the winner compared with other feasible coalitions of the german party system but the party rankings of the cdu csu fdp coalition leaners are more homogeneous than other groups of coalition leaners in the second part of the article we analyze the common structure of all consistent party rankings do voters apply the same criteria to evaluate the political parties although only a slight majority of individual rankings fit the often used ideological left right scale there does not exist a competing one dimensional order of the parties that would capture more voters the joint scale of individual party rankings is interpreted as the collective order which facilitates political orientation of voters this collective order is more pronounced in west than in east germany where individuals are almost as consistent in their party rankings but where the rankings fit the collective order less well than in west germany

stability and centrality of legislative choice in the spatial context majority rule spatial voting games lacking a core still always present a near core outcome more commonly known as the copeland winner this is the alternative that defeats or ties the greatest number of alternatives in the space previous research has not tested the copeland winner as a solution concept for spatial voting games without a core lacking a way to calculate where the copeland winner was with an infinite number of alternatives we provide a straightforward algorithm to find the copeland winner and show that it corresponds well to experimental outcomes in an important set of experimental legislative voting games we also provide an intuitive motivation for why legislative outcomes in the spatial context may be expected to lie close to the copeland winner finally we show a connection between the copeland winner and the shapley value and provide a simple but powerful algorithm to calculate the copeland scores of all points in the space in terms of the modified power values of each of the voters and their locations in the space

towards a theory of bicameralism the neglected contributions of the calculus of consent in the calculus of consent 1962 235 buchanan and tullock assert 1 ceteris paribus while a coalition controlling less than a majority of voters may control in either chamber the greater the difference in the bases of representation in the two houses the less likely is any given coalition of voters to control a majority of the seats in both chambers 2 the potential of cross chamber logrolls on issues of unequal intensity increases the likelihood that a minority may effectively control policy making we link these ideas to social theory approaches to bicameralism and for the empirical study of legislatures

the choquet bargaining solutions abstract we axiomatically investigate the problem of rationalizing bargaining solutions by social welfare functions that are linear in every rank ordered subset of r n such functions the so called choquet integrals have been widely used in the theories of collective and individual choice we refer to bargaining solutions that can be rationalized by choquet integrals as choquet bargaining solutions our main result is a complete characterization of choquet bargaining solutions as a corollary of our main result we also obtain a characterization of the generalized gini bargaining solutions introduced by blackorby et al 1994 econometrica 62 1161 1178 journal of economic literature classification numbers d71 c78

the pareto principle of optimal inequality the pareto principle is often viewed as a mild requirement compatible with a variety of value judgements in particular it is generally thought that it can accommodate different views on the desirable degree of equality we show that this is generally not true in intertemporal models where some uncertainty prevails to do so we formalize the concept of inequality aversion we show that different degrees of inequality aversion are not possible in typical models of time consistent dynamic decision under uncertainty

robustness of intermediate agreements and bargaining solutions abstract most real life bargaining is resolved gradually during this process parties reach intermediate agreements these intermediate agreements serve as disagreement points in subsequent rounds we identify robustness criteria which are satisfied by three prominent bargaining solutions the nash proportional and as a special case to the egalitarian solution and discrete raiffa solutions we show that the robustness of intermediate agreements plus additional well known and plausible axioms provide novel axiomatizations of the above mentioned solutions hence we provide a unified framework for comparing these solutions bargaining theories

a note on additive utility and bargaining abstract necessary and sufficient conditions are given under which a decision maker s von neumann morgenstern utility function on the cartesian product of two prospect spaces can be expressed as a sum of coordinate utility functions assuming that all preferences are given a main motivation for this result is an application in axiomatic bargaining theory

why so much stability one of duncan black s 1958 more important contributions was a classically simple proof that with complex issues and majority voting a stable outcome is unlikely this very simple proof that there would normally be no motion which can get a majority against all others and hence that any possible outcome is dominated by another has been elaborated and made more precise by later work without most improbable conditions endless cycling would be expected this is particularly true when logrolling is present as it normally is if we look at the real world however we observe not only is there no endless cycling but acts are passed with reasonable dispatch and then remain unchanged for very long periods of time thus theory and reality seem to be not only out of contact but actually in sharp conflict it is the purpose of this article to demonstrate that our existing theory when properly looked at does indeed imply a relatively stable outcome to voting in some cases however this stability will not be a true equilibrium because a random member of a large set will be chosen and then that random outcome will be left unchanged for long periods of time it does not dominate all other outcomes but is retained merely because of its particular history there are already several possible explanations for the observed stability in the literature we will take them up as they become relevant to the general line of reasoning i should however warn the reader that my own previous work including joint work with buchanan will play a major role here this may simply reflect egotism but i think that some of the early work which is now partially forgotten can provide solutions for more modern problems much recent public choice work has involved spatial models and these models frequently ignore logrolling the reason presumably is that it is very hard to put logrolling in a two dimensional diagram we shall begin considering such special models and assume that the issues are the sort that does not lead to logrolling and then turn to more complex logrolling problems with respect to the first situation in which logrolling does not occur there is already one possible explanation for the observed stability in the literature

context dependent voting and political ambiguity abstract in recent decades psychologists have shown that the standard model of individual choice is often violated one regularly observed violation is that choices are influenced by the decision context to incorporate these effects into politics we introduce a theory of context dependent voting and apply it to the puzzle of why candidates are so frequently ambiguous in their policy pronouncements we show that context dependent voters develop a taste for ambiguity even when they evaluate distances quadratically and exhibit traditional risk aversion turning to aggregate effects we incorporate context dependent voting into a model of electoral competition and show that strategic candidates respond in equilibrium to context dependent voters by offering ambiguous platforms thereby affecting the policy outcome

bargaining with uncertain disagreement points much of the uncertainty concerning the likely outcome of a typical management labor conflict pertains to the cost of possible conflict to the two sides in this paper we consider situations of this kind where the cost of conflict is not known with certainty however we will assume the benefits from cooperation to be known we place our analysis in the abstract framework formulated by nash 1950 nash described a bargaining problem as a pair consisting of a feasible set the amount to be divided among management and labor and a disagreement point giving the payoffs to both sides when they fail to reach agreement on a division that is the strike nash investigated the existence of solutions to such problems that would satisfy a certain list of appealing properties in his analysis both feasible set and disagreement point were assumed to be known here we assume only the feasible set to be known several studies have appeared of bargaining situations where the feasible set is unknown but the disagreement point is known while we are of course not denying the relevance of such studies we believe that an analysis of situations where it is the consequences of conflict that are unknown might be equally and perhaps even more relevant to industrial experience indeed consider a management labor conflict over wages and benefits in many industries the future profitability of the enterprise can be predicted with reasonable accuracy on the basis of its performance in the previous years whereas the impact of a strike might depend on a number of factors that are significantly harder to evaluate this is because strikes are infrequent and conjectures about these factors are often not put to the test a strike is a threat that is often not carried out and because they involve a number of parameters that are difficult to quantify such as the psychological readiness of the strikers the support they might receive from the population and the media and the likely response of competing and related industries we impose on solutions a new condition of disagreement point concavity guaranteeing that agents will agree on a compromise before the uncertainty concerning the disagreement point is resolved to illustrate this requirement somewhat more concretely suppose that bargaining takes place today without the precise location of the disagreement point being known this uncertainty being resolved tomorrow the bargainers have two options the first option is simply to wait until tomorrow and solve then whatever problem has come up unfortunately the resulting pair of contingent compromises evaluated today is in general strictly pareto dominated the other possibility is to solve today the problem obtained by replacing the uncertain disagreement point by its expected value this represents the cost of conflict evaluated today and to solve the resulting problem today this second option has the advantage of yielding paretoundominated compromises provided of course that agents would in the case of no uncertainty select such compromises but unfortunately it may make one of the agents worse off than under the first option in order to ensure that all agents agree to reaching a compromise today we require that the second option always pareto dominate the first one we show that disagreement point concavity when used in conjunction with three standard properties that are satisfied by virtually all of the solutions commonly discussed

is property crime caused by drug use or by drug enforcement policy the relationships among drug offenses prorperty crime and the allocation of police resources are investigated in a structural model using data from florida countries law enforcement resources are scarce and as efforts to combat drug crime increase the amount of these resources allocated to property crime is reduced this reallocation of police resources results in reduced deterrence for property crime and as a result an increase in these crimes the evidence presented suggests that rising property crimes in florida are at least partially the result of drug enforcement policy

the core and the stability of group choice in spatial voting games the core of a voting game is the set of undominated outcomes that is those that once in place cannot be overturned for spatial voting games a core is structurally stable if it remains in existence even if there are small perturbations in the location of voter ideal points while for simple majority rule a core will exist in games with more than one dimension only under extremely restrictive symmetry conditions we show that for certain supramajorities a core must exist we also provide conditions under which it is possible to construct a structurally stable core if there are only a few dimensions our results demonstrate the stability properties of such frequently used rules as two thirds and three fourths we further explore the implications of our results for the nature of political stability by looking at outcomes in experimental spatial voting games and at belgian cabinet formation in the late 1970s

when and how do voters try to manipulate experimental evidence from borda elections we study strategic voting in a laboratory experiment using a borda mechanism we find that manipulation rates are surprisingly low even for individuals who know that they possess superior information about the other agents preferences exploring possible explanations we find that manipulation rates rise significantly if individuals are not only informed about the other agents preferences but also about their actual votes this suggests that uncertainty plays a key role in understanding strategic behavior in elections by contrast distributional concerns e g in the form of inequality aversion are found to play a negligible role in our context

regret aversion and opportunity dependence this paper provides an axiomatic model of decision making under uncertainty in which the decision maker is driven by anticipated ex post regrets our model allows both regret aversion and likelihood judgement over states to coexist also we characterize two special cases minimax regret with multiple priors that generalizes savage s minimax regret and a smooth model of regret aversion

picking a loser a social choice perspective on the danish government formation of 1975 all democratic systems are theoretically open to so called election inversions i e instances wherein a majority of the decision makers prefer one alternative but where the actual outcome is another the paper examines the complex 1975 danish government formation process which involved five rounds of negotiations and at least five competing alternatives we demonstrate that in terms of party preferences the final outcome was not the condorcet winner but rather one that could have been beaten by at least three other government alternatives in head to head comparisons the danish procedural system of negative parliamentarism combined with simple plurality rule to produce the electoral inversion

the strongly stable core in weighted voting games the problems associated with the concept of the core in spatial voting games such as non existence and instability are well documented the structurally stable core presented by schofield attempts to resolve these problems by looking at the subset of the core which is still nonempty after a small change in voter preferences although this concept combined with the adoption of supramajoritarian voting rules and weighted voting games may very well explain the observed stability in reality it may not be suitable for certain coalition situations this article proposes a new solution concept the strongly stable core the conditions for the existence and the potential location of the strongly stable core are then explored and compared with those of the structurally stable core

egalitarian solutions and uncertain disagreement points abstract we consider bargaining problems with uncertain disagreement points we search for solutions providing agents the incentive to reach agreements before the uncertainty is resolved we identify the weighted egalitarian solutions as being the only ones in the family of directional solutions characterized in an earlier paper chun and thomson 1987 to satisfy three alternative lists of complementary conditions we also show that on the class of coalitional form games the kalai samet 1985 extension of the egalitarian solutions does not provide this incentive for early agreement

empirical evidence of paradoxes of voting in dutch elections in this paper we analyze four national elections held in 1982 1986 1989 and 1994 in the netherlands on the occurrence of the condorcet paradox in addition we investigate these elections on the occurrence of three so called majority plurality paradoxes the first paradox states that a party having a majority over another party may receive less seats the second states that a condorcet winner may not receive the largest number of seats and even may not receive a seat at all the third says that the majority relation may be the reverse of the ranking of parties in terms of numbers of seats

a computable equilibrium model for the study of political economy theory the need for the development and use of a concept of joint political economic equilibrium is increasingly recognized by students of democracy and markets yet to date no adequate theoretical and methodological synthesis of this kind has been produced the few works which have attempted it suffer from a lack of theoretical balance between economic and political theory unrealistic temporally aggregated conceptions of political economic equilibrium failure to incorporate theoretically meaningful stochastic elements of economic and political processes and the absence of a coherent methodology for gauging the empirical power of political economic models methods in the spirit of the ajps workshop it is shown how these problems can be solved an improved model is built one which fuses a branch of real business cycle theory and the theory of presidential approval this model produces a notion of computable political economic equilibrium that provides for market clearing and simultaneous stochastic optimization by economic and political agents then using data analysis techniques developed in parallel by real business cycle theorists hansen and heckman 1996 kydland and prescott 1990 1996 lucas 1987 prescott 1986a 1986b 1991 sims 1996 and political methodologists brady 1996 jackson 1995 the model is parameterized for the united states more specifically on the basis of estimates from economics and political science and some numerical experimentation certain of its parameters are set so that when simulated the model mimics the united states political economy in the 1980s results the parameterized model is used to study some important counterfactuals the first is the impact of increased approval volatility on political economic equilibration such volatility is expected in view of america s likely involvement in the post cold war era s increasing number of low intensity international conflicts the second is the impact of presidents pursuing relatively high nonminimum winning levels of approval this kind of behavior is attributed to certain presidents along with the claim that it has harmful effects on markets and hence on various facets of social welfare the former

an approach to empirical studies of voting paradoxes an update and extension by tradition public choice theorists have pointed out many paradoxes of collective choice the phenomenon of cyclical majorities and the more general issue of political equilibrium have proven to be fertile searching grounds one class of paradoxes derives from the intransitivity of social orderings implied by the cycle as riker 1982 notes this property of majority rule is most perplexing and paradoxical to those who hold populist beliefs that voting reflects a fair and meaningful amalgamation of individual preferences and must therefore reflect the will of the people if voting in general elections and committees is interpreted this way then the existence of voting cycles and the implied intransitivity or more generally the impossibility of any rule for making social choices assuring transitive sometimes equated with rational outcomes shakes the foundations of populist principles of political philosophy another paradox of cyclical majorities and simulations of voting games in general concerns the stability of political equilibria the body of theory regarding this issue is skillfully summarized by shepsle and weingast 1982 and can be reduced to a simple proposition with sufficient assumptions regarding the states of participants knowledge and the manipulability of

the veil of public ignorance abstract a theory of cooperative choice under incomplete information is developed in which agents possess private information at the time of contracting and have agreed on a utilitarian standard of evaluation governing choices under complete information the task is to extend this standard to situations of incomplete information our first main result generalizes harsanyi s j polit econ 63 1955 309 classical result to situations of incomplete information assuming that group preferences satisfy bayesian coherence and interim pareto dominance these axioms are mutually compatible if and only if a common prior exists we argue that this result partly resolves the impossibility of bayesian preference aggregation under complete information

assessing risky social situations this paper reexamines the welfare economics of risk it singles out a class of criteria the expected equally distributed equivalent as the unique class that avoids serious drawbacks of existing approaches such criteria behave like ex post criteria when the final statistical distribution of well being is known ex ante and like ex ante criteria when risk generates no inequality the paper also provides a new result on the tension between inequality aversion and respect of individual ex ante preferences in the vein of harsanyi s aggregation theorem

the bargaining within abstract this short paper shows that intrapersonal bargaining in a dual self model can be used to provide a foundation for quasi hyperbolic discounting model popularized by laibson laibson david 1994 essays in hyperbolic discounting ph d dissertation mit laibson david 1997 golden eggs and hyperbolic discounting quarterly journal of economics 112 443 477

cycles and instability in politics evidence from the 2009 danish municipal elections social choice theory predicts that political processes are prone to instability or outright chaos yet the evidence that actual politics is dominated by the phenomena identified in the literature is somewhat anecdotal and widely contested in order to systematically assess the degree to which politics is affected by cyclicality or chaos as predicted by social choice theorists we study the outcome of the 2009 municipal elections in denmark this yields a total of 97 cases which allows for a systematic assessment of the frequency of cycling through a large n study evidence of four cyclical results is presented

judge don t vote this article explains why 1 the traditional model of the theory of social choice misrepresents reality 2 it cannot lead to acceptable methods of ranking and electing in any case and 3 a more realistic model leads inevitably to one method of ranking and electing majority judgment that best meets the traditional criteria of what constitutes a good method

incentives compensation and social welfare first version received january 1985 final version accepted august 1986 eds alternative wage structures under conditions of moral hazard are analysed from a social welfare standpoint it is argued that ex post equity judgements in an uncertainty context should incorporate a preference for positive correlation of utilities of different individuals in the design of compensation schemes this may give rise to a conflict between ex post equity objectives and the need to provide effort incentives relative performance clauses in compensation schemes that are useful for providing incentives are undesirable from an ex post equity standpoint this is demonstrated by showing a in a context of independent production uncertainties every rankorder tournament is welfare dominated by a set of independent randomized contracts and b welfare optimal compensation schemes in general depend separately on an equity and an incentive component that tend to correlate agent compensations in different directions a central question in welfare economics concerns the design of a system of rewards for productive effort that balances distributive considerations with the provision of effort incentives this issue has usually been studied in the context of a model due to mirrlees 1971 in which the conflict between distribution and incentives arises because the social planner lacks perfect information about the abilities of individuals in this paper we analyse a model in which individual abilities are publicly known a conflict between distribution and incentives arises instead from the existence of uncertainty in production processes and a moral hazard problem stemming from the unobservability of workers effort most analyses of moral hazard have concentrated on the tradeoff between insurance of agents against wage fluctuations and provision of effort incentives the context is generally taken to be a capitalist firm where the self interested planner has a residual claim on workers output in other settings such as public sector or labour managed firms the planner may have preferences over the distribution of ex post welfare among the workers this paper analyses how with such preferences effort incentives under moral hazard are constrained both by insurance and by distributive considerations in section 2 we suggest that a concern for ex post equality of individual welfares can be expressed by a preference for positive correlation among welfare levels we then consider what properties of the ex post welfare function incorporate this preference for correlation welfare functions that are additively separable across individuals are inappropriate no matter how concave with them expected value depends only on the

drugs economics and policy drug ii let the market work there is no necessary link between drug consumption addiction and social disintegration empirical evidence suggests that a considerable share of the population has consumed illegal drugs during some period of their lives a substantial proportion of drug users have a job and home many mature out of drug consumption in their thirties most drug users are normal consumers responding systematically to relative prices after the failure of a repressive drugs policy switzerland allows cities to pursue a third way between repression and liberalization the state allows carefully screened heavy addicts to inject heroin at a nominal price while at the same time raising the cost to potential entrants the experiment has produced encouraging results the health of heroin users has improved and crime has been reduced a homogenized drugs policy in the european union would probably disallow such promising programmes bruno s frey

the price elasticity of hard drugs the case of opium in the dutch east indies 1923 1938 at the beginning of this century the dutch government controlled the opium market in the dutch east indies nowadays indonesia for several decades this state monopoly was called the opiumregie using information gathered during the opiumregie this paper estimates price elasticities of opium consumption it appears that short term price elasticities of opium use are about 0 7 long term price elasticities are about 1 0

logical deficiencies in spatial models a constructive critique a fundamental property of any good theoryis logical consistency however two commonassumptions in the rational choice approach topolitical analysis that induced preferences overpolicy are separable and that such preferences areindependent of changes in exogenous factors are notconsistent with the archetypal assumptions ofindividual utility maximization these particularpathologies of spatial models of politics have notbeen well recognized in the political scienceliterature

expectations and informal rules in coalition formation why do informal rules emerge alongside and at variance with the formal constitutional constraints that shape bargaining over coalition governments the presence of informal rules at odds with formal rules appears as an anomaly within both institution free and institution focused theories of coalitions the author argues that politicians create informal rules in order to alter formal institutions that do not function to their benefit the costs of a formal change in institutions offer incentives to politicians to invent informal rules as alternatives to such change and repeated interactions teach politicians what to expect and then invent the author s emphasis on the manipulability of rules echoes long standing themes in the study and practice of politics

the costs of coalition coalition theories and italian governments governments in italy both change and remain the same from 1946 to 1992 the christian democratic party always held governing power but almost no cabinet stayed in office more than a few years and many governments collapsed after only a few months how can instability coexist with stability in this way how can governments break up at such low cost and with so little effect on alternation these questions are rooted in but not resolved by the available game theoretic literature on coalitional behavior my answer is that politicians purposive actions can reduce the costs of coalition i argue that the costs of making breaking and maintaining coalitions depend on political institutions and on the array of parties and voters in policy space institutional and spatial conditions structure politicians opportunities and attempts to lower costs under some conditions as i show coalitions are cheap and politicians can easily make coalitions even cheaper the inference is that this framework comprehends both italy s extremes and the degrees of stability found in other parliamentary democracies

attitudes toward catastrophe in light of climate change and other global threats policy commentators sometimes urge that society should be more concerned about catastrophes this paper reflects on what society s attitude toward low probability high impact events is or should be we first argue that catastrophe risk can be conceived of as a spread in the distribution of losses based on this conception we review studies from decision sciences psychology and behavioral economics that explore people s attitudes toward various social risks contray to popular belief we find more evidence against than in favor of catastrophe aversion the preference for a mean preserving contraction of the loss distribution and discuss a number of possible behavioral explanations next we turn to social choice theory and examine how various social welfare functions handle catastrophe risk we explain why catastrophe aversion may be in conflict with equity concerns and other regarding preferences finally we discuss current approaches to evaluate and regulate catastrophe risk