Fighting pollution when decisions are strategic

In this paper we analyse anti-pollution policies in a 2-by-2 game played between a “polluter” and the “police” in which the payoffs can be manipulated by an exogenous third player called the “policy-maker.” We show that the efficiency of the policies may depend on whether the players of the 2-by-2 game choose Nash equilibrium strategies or prefer maximin.     

Seeking rents in the shadow of Coase

In this paper, we study a two-stage rent-seeking game. In the first stage, contestants compete à-la-Tullock; in the second stage, the winner can resell the rent à-la-Coase. We consider a complete information Tullock game in which the contestants have different valuations for the rent. The analysis focuses on the ex ante effects of a secondary market on efforts, payoffs, rent-dissipation and rent-misallocation. We show that the secondary market, while correcting possible misallocations, may exacerbate rent dissipation. In some situations, the increase in rent dissipation more than offsets the allocative advantage, so that a secondary market might reduce welfare. We further show how the effect of ex post tradeability on welfare depends on the parties’ bargaining power and valuations of the rent, also considering the case of endogenous bargaining power.     

Correlated payoffs in the inspection game: some theory and an application to corruption

The inspection game as formulated by Tsebelis (Am. Polit. Sci. Rev. 83:77–91, 1989) has the counterintuitive implication that crime is unaffected by the magnitude of the penalty. This paper demonstrates that to attain this outcome, it is necessary to assume independence of enforcer and offender payoffs. Given correlated payoffs, the comparative statics of the equilibrium yield an inverse relationship between crime and the severity of the sanction. In an application, we enrich the framework of Tsebelis by adding corruption stages and show that this can imply such a correlation of payoffs. Another interesting finding is that harsher anticorruption measures can increase crime incentives.     

Bias in Conditional and Unconditional Fixed Effects Logit Estimation

Fixed-effects logit models can be useful in panel data analysis,when N units have been observed for T time periods. There aretwo main estimators for such models: unconditional maximum likelihoodand conditional maximum likelihood. Judged on asymptotic properties,the conditional estimator is superior. However, the unconditionalestimator holds several practical advantages, and thereforeI sought to determine whether its use could be justified onthe basis of finite-sample properties. In a series of MonteCarlo experiments for T < 20, I found a negligible amountof bias in both estimators when T 16, suggesting that a researchercan safely use either estimator under such conditions. WhenT < 16, the conditional estimator continued to have a verysmall amount of bias, but the unconditional estimator developedmore bias as T decreased.     

Learning the structure of a simple rent-seeking game

This paper considers a form of the Tullock imperfectly discriminating rent-seeking game in which the contestants are uncertain about the value of a bias parameter in the probability of winning function. Beliefs about this unknown parameter are not constrained to be static; we consider two methods by which the players' prior beliefs on this parameter can be updated. First, we allow for information to emerge by considering the case in which the game is played twice, with the outcome of the first game known before the second begins. The identity of the winner of the first contest represents information which emerges endogenously that can be used to revise beliefs on the unknown bias parameter. Second, information can be produced outside of the model by an external agency; this gives rise to exogenous learning. We consider the consequences for rent-seeking in each of these two cases.     

General Blotto: games of allocative strategic mismatch

The Colonel Blotto game captures strategic situations in which players attempt to mismatch an opponent’s action. We extend Colonel Blotto to a class of General Blotto games that allow for more general payoffs and externalities between fronts. These extensions make Blotto applicable to a variety of real-world problems. We find that like Colonel Blotto, most General Blotto games do not have pure strategy equilibria. Using a replicator dynamics learning model, we show that General Blotto may have more predictable dynamics than the original Blotto game. Thus, adding realistic structure to Colonel Blotto may, paradoxically, make it less complex.     

Estimation of Models with Beta-Distributed Dependent Variables: A Replication and Extension of Paolino's Study

This note replicates and extends Paolino's discussion (2001,Political Analysis 9:325–346) on the estimation of modelswith beta-distributed dependent variables in two ways. First,it introduces an easy-to-use program for estimating the modelusing Stata. Second, it presents a Bayesian estimator for betavariables based on Paolino's model. Results are compared tothose in the original article.     

The missing piece: Measuring portfolio salience in Western European parliamentary democracies

Abstract.  Although much has been discovered concerning the resources and preferences that parties take into the coalition formation game in Western European parliamentary democracies, we know a good deal less about the payoffs they receive. Portfolios constitute an important payoff, not just because they provide access to patronage, but because influence over policy decisions tends to go with control over the key government portfolios. It is easy to discover which and how many portfolios each party holds in any government, but what is missing is accurate measurement of the value or salience of these portfolios. Some attempts have been made to measure portfolio salience, but they have lacked one or more of the following properties: cross-national scope, country-specific measurement, coverage of the full set of postwar portfolios, measurement by multiple experts and measurement at the interval level. In this article, we present a new data contribution: a set of portfolio salience scores that possesses all of these properties for 14 Western European countries derived from an expert survey. We demonstrate the comprehensiveness and reliability of the ratings, and undertake some preliminary analyses that show what the ratings reveal about parliamentary government in Western Europe.     

Sensitive Questions, Truthful Answers? Modeling the List Experiment with LISTIT

Standard estimation procedures assume that empirical observationsare accurate reflections of the true values of the dependentvariable, but this assumption is dubious when modeling self-reporteddata on sensitive topics. List experiments (a.k.a. item counttechniques) can nullify incentives for respondents to misrepresentthemselves to interviewers, but current data analysis techniquesare limited to difference-in-means tests. I present a revisedprocedure and statistical estimator called LISTIT that enablemultivariate modeling of list experiment data. Monte Carlo simulationsand a field test in Lebanon explore the behavior of this estimator. Author's Note: My thanks to Robert Axelrod, Janet Box-Steffensmeier,Sarah Croco, Adam Glynn, Sunshine Hillygus, John Jackson, LukeKeele, Gary King, James Kuklinski, Irfan Nooruddin, Mark Tessler,Ashutosh Varshney, and two anonymous reviewers for their commentsand suggestions. Replication materials are available on thePolitical Analysis web site.     

Do Voters’ Coalition Preferences Affect Government Formation?

Studies on coalition formation assume that political parties have two major goals: they aim to maximise office and policy payoffs. This paper shows that decision-making in the government formation game is also determined by the voters’ coalition preferences. Since the coalition formation process is not a one-shot game, parties have to take the coalition preferences of the electorate into account when they evaluate the utility of potential coalitions. If parties fail to comply with the coalition preferences of voters, they are likely to be penalised in future elections. The argument is tested by an analysis of government formation in the 16 German states between 1990 and 2009. The results support the argument: the formation of coalitions – at least in the German states – is not only determined by office- and policy-seeking behaviour of political parties, but also by the preferences of voters regarding their preferred outcome of the coalition game.     

Random Coefficient Models for Time-Series-Cross-Section Data: Monte Carlo Experiments

Jonathan N. Katz Division of the Humanities and Social Sciences, California Institute of Technology, Pasadena, CA 91125 e-mail: jkatz{at}caltech.edu e-mail: nathaniel.beck{at}nyu.edu (corresponding author) This article considers random coefficient models (RCMs) fortime-series–cross-section data. These models allow forunit to unit variation in the model parameters. The heart ofthe article compares the finite sample properties of the fullypooled estimator, the unit by unit (unpooled) estimator, andthe (maximum likelihood) RCM estimator. The maximum likelihoodestimator RCM performs well, even where the data were generatedso that the RCM would be problematic. In an appendix, we showthat the most common feasible generalized least squares estimatorof the RCM models is always inferior to the maximum likelihoodestimator, and in smaller samples dramatically so. Authors' note: We gratefully acknowledge the financial supportof the National Science Foundation. Katz also acknowledges thesupport of the Center for Advanced Study in the Behavioral Sciences.We are thankful to Jake Bowers, Rob Franzese, Andy Gelman, SandyGordon, Bill Greene, and Luke Keele for comments; to Larry Bartelsfor always reminding us that our judgment may outperform thedata; as well as to the anonymous reviewers of Political Analysis.     

Toward a theoretical explanation of premature cabinet termination

Abstract. We propose a rational choice model of premature cabinet termination involving considerations of expected gain in terms of electoral payoffs, policy payoffs, or portfolio payoffs. This approach, which distinguishes contextual variables that will generally affect the nature of cost-benefit calculations made by political actors from the factors that are most likely to have a direct impact on a particular decision to precipitate a cabinet crisis, leads us to several testable hypotheses. We provide a first illustrative test of our predictions with data from the Netherlands.     

In Defense of Comparative Statics: Specifying Empirical Tests of Models of Strategic Interaction

Christopher Zorn Department of Political Science, University of South Carolina, Columbia, SC 29208 e-mail: zorn{at}sc.edu e-mail: ccarrub{at}emory.edu (corresponding author) Beginning in 1999, Curtis Signorino challenged the use of traditionallogits and probits analysis for testing discrete-choice, strategicmodels. Signorino argues that the complex parametric relationshipsgenerated by even the simplest strategic models can lead towildly inaccurate inferences if one applies these traditionalapproaches. In their stead, Signorino proposes generating stochasticformal models, from which one can directly derive a maximumlikelihood estimator. We propose a simpler, alternative methodologyfor theoretically and empirically accounting for strategic behavior.In particular, we propose carefully and correctly deriving one'scomparative statics from one's formal model, whether it is stochasticor deterministic does not particularly matter, and using standardlogit or probit estimation techniques to test the predictions.We demonstrate that this approach performs almost identicallyto Signorino's more complex suggestion. Authors' note: We would like to thank Randy Calvert, Mark Hallerberg,Andrew Martin, Eric Reinhardt, Chris Stanton, and Craig Voldenfor their valuable feedback on this project. All remaining errorsare our own. Replication materials are available at the PoliticalAnalysis Web site.     

Stakes and Welfare in Rent-Seeking Contests

Using a public-policy application ofTullock's two-player rent-seeking contest,this paper focuses on the relationshipbetween the aggregate expected utility ofthe players and their asymmetricvaluations. In our game these valuationsare the players' payoffs in the twopossible states of nature, namely, theapproval and rejection of the proposedpublic policy. Our main result provides thecondition that ensures that the aggregateexpected payoff of the two contestants (theinterest groups that compete on theapproval of the proposed policy) is positively related to the valuationparameters.     

Social Capital and Endogenous Preferences

In this paper we analyze whether social capital can emerge endogenously from a process of preference evolution. We define social capital as preferences that promote voluntary cooperation in a one-shot Prisoner’s Dilemma game. We investigate how the endogenous preferences depend on the amount of information individuals have about each other’s preferences. When there is sufficiently much information, maximal social capital emerges. In general, the level of social capital varies positively with the amount of information. Our results may add to an understanding of the factors that determine a society’s ability to generate cooperative outcomes.     

Selfish and Cooperative Voting: Can the Majority Restrain Themselves?

At every scale from small committees to national elections, voters face tradeoffs between self-interest and the common good. We report three experiments in which participants vote for policies with real payoffs at stake. We manipulate self-interest by randomly assigning participants to two groups in society with different policy payoffs. Participants in the majority group are confronted by a simple choice between a policy that is better for themselves or a policy that is best for society. Overall, we find a clear effect of self-interest: Participants are more likely to choose the policy that earns them more money, compared to participants in the other group, even when the policy is detrimental to the common good. Simultaneously, we observe considerable levels of cooperative voting among participants in the majority, ranging from 47% to 79% across different payoff regimes. Finally, participants were not more cooperative when voting compared to when they chose between the same policies with a lottery or leader institution, departing from the hypothesis that voting institutions promote cooperative motives. We discuss implications for multiple literatures about voting behavior.

     

A comment on Baron and Ferejohn (1989): The Open Rule Equilibrium and Coalition Formation

I present a more general characterization of the symmetric stationary subgame perfect equilibrium to the Baron and Ferejohn (1989) open rule divide-the-dollar game. Specifically, I show that an amender can follow several different randomization strategies when deciding whom to make offers to, and each can be sustained as a distinct equilibrium with slightly different payoffs. The result demonstrates that, when building coalitions in bargaining settings where an offer is already on the table, those with the worst offers need not be the ones “bought up” first.     

Democratization of Eastern Europe: A Game Theoretic Perspective

The dramatic and surprising process of democratization in Eastern Europe poses a challenge to political science. There is a demand for theories which may help us to understand these transitions from authoritarian rule to democracy. This article is primarily focused on that set of hypotheses which are found in Adam Przeworski's writings on liberalization and democratization. Its main purpose is to develop some proposals for a game theoretical interpretation of Przeworski's ideas. At the outset this seems to be foredoomed to failure, since in some cases - i. e. the collapse of communism in East Germany and Czechoslovakia -the process of democratization was turbulent to the extent that even the characteristics of a game were the subject of dramatic changes. One may then ask if it is at all possible to model these processes as a game, i. e. a situation where the actors, their opportunity sets and their payoffs are well defined? In lieu of a conclusion the article ends with a suggestion that the snowball effect, as observed at the repeated demonstrations in such places as Leipzig and Wenzler Square, can be understood in terms of Granovetter's threshold model of collective action.     

Policy‐Specific Information and Informal Agenda Power

In Gilligan and Krehbiel's models of procedural choice in legislatures, a committee exerts costly effort to acquire private information about an unknown state of the world. Subsequent work on expertise, delegation, and lobbying has largely followed this approach. In contrast, we develop a model of information as policy valence. We use our model to analyze a procedural choice game, focusing on the effect of transferability, i.e., the extent to which information acquired to implement one policy option can be used to implement a different policy option. We find that when information is transferable, as in Gilligan and Krehbiel's models, closed rules can induce committee specialization. However, when information is policy‐specific, open rules are actually superior for inducing specialization. The reason for this surprising result is that a committee lacking formal agenda power has a greater incentive to exercise informal agenda power by exerting costly effort to generate high‐valence legislation.     

Ignoramus, Ignorabimus? On Uncertainty in Ecological Inference

Thomas Gschwend Center for Doctoral Studies in Social and Behavioral Sciences, University of Mannheim, D7, 27, 68131 Mannheim, Germany e-mail: gschwend{at}uni-mannheim.de Ron J. Johnston School of Geographical Sciences, University of Bristol, Bristol BS8 1SS, UK e-mail: r.johnston{at}bristol.ac.uk e-mail: elff{at}sowi.uni-mannheim.de (corresponding author) Models of ecological inference (EI) have to rely on crucialassumptions about the individual-level data-generating process,which cannot be tested because of the unavailability of thesedata. However, these assumptions may be violated by the unknowndata and this may lead to serious bias of estimates and predictions.The amount of bias, however, cannot be assessed without informationthat is unavailable in typical applications of EI. We thereforeconstruct a model that at least approximately accounts for theadditional, nonsampling error that may result from possiblebias incurred by an EI procedure, a model that builds on thePrinciple of Maximum Entropy. By means of a systematic simulationexperiment, we examine the performance of prediction intervalsbased on this second-stage Maximum Entropy model. The resultsof this simulation study suggest that these prediction intervalsare at least approximately correct if all possible configurationsof the unknown data are taken into account. Finally, we applyour method to a real-world example, where we actually know thetrue values and are able to assess the performance of our method:the prediction of district-level percentages of split-ticketvoting in the 1996 General Election of New Zealand. It turnsout that in 95.5% of the New Zealand voting districts, the actualpercentage of split-ticket votes lies inside the 95% predictionintervals constructed by our method. Authors' note: We thank three anonymous reviewers for helpfulcomments and suggestions on earlier versions of this paper.An appendix giving some technical background information concerningour proposed method, as well as data, R code, and C code toreplicate analyses presented in this paper are available fromthe Political Analysis Web site. Later versions of the codewill be packaged into an R library and made publicly availableon CRAN (http://cran.r-project.org) and on the correspondingauthor's Web site.