Democracy's Pin Factory: Issue Specialization,the Division of Cognitive Labor,and Epistemic Performance

This article describes how issue specialization through deliberative institutions called “issue publics” can improve the quality of democratic decision making. Issue specialization improves decisions by instantiating a cognitive division of labor among the mass public, which creates efficiencies in decision making and grants large groups of average citizens a scalable advantage over small groups of even the smartest and most capable individuals. Issue specialization further improves decisions by capturing issue-specific information, concentrating it within the specialized deliberative enclaves of issue publics, and refining citizens’ issue preferences. These advantages are brought to bear in wider democratic politics and policy through information shortcuts and through the specialized electoral incentives of representatives. The article responds to concerns about political ignorance, polarization/partisanship, rent seeking, and socioeconomic bias and argues that issue specialization can provide a valuable brake to polarization yet needs institutional supplementation to engage marginalized citizens and combat bias.     

Government's response to Hurricane Katrina: A public choice analysis

We use public choice theory to explain the failure of FEMA and other governmental agencies to carry out effective disaster relief in the wake of Hurricane Katrina. The areas in which we focus are: (1) the tragedy of the anti-commons resulting from layered bureaucracy, (2) a type-two error policy bias causing over cautiousness in decision making, (3) the political manipulation of disaster declarations and relief aid to win votes, (4) the problem of acquiring timely and accurate preference revelations, (5) glory seeking by government officials, and (6) the shortsightedness effect causing a bias in governmental decision making.     

“Tell It Like It Is”: Decision Making,Groupthink, and Decisiveness among U.S. Federal Subcabinet Executives

In addition to difficulties gathering and evaluating complete information, cognitive limitations and biases preclude individuals from making fully value‐maximizing choices when making decisions. It has been suggested that, done properly, involving advisors can compensate for individual‐level limitations. However, the “groupthink” tradition has highlighted ways group‐aided decision making can fail to live up to its potential. Out of this literature has emerged a paradigm Janis calls “vigilant problem‐solving.” For this article, we interviewed 20 heads of subcabinet‐level organizations in the U.S. federal government, asking questions about how they made important decisions. Ten were nominated by “good‐government” experts, 10 chosen at random. We wanted to see whether there were differences in how members of those two groups made decisions, specifically, to what extent executives in the two categories used a “vigilant” process. We found, however, that similarities between the two groups overwhelmed differences: As best as we were able to measure, decision making by U.S. subcabinet executives tracks vigilant decision making recommendations fairly closely. The similarity reflects a common style of senior‐level decision making, which we theorize grows out of government bureaucracy's methodical culture. We did, however, develop evidence for a difference between outstanding executives and others on another dimension of decision making style. Outstanding executives valued decision making decisiveness—“bias for action”—more than the comparison group. Perhaps, then, what distinguishes outstanding executives from others is not vigilance but decisiveness. Contrary to the implications of the groupthink literature, the danger in government may be “paralysis by analysis” as much or more than groupthink.     

Is compulsory voting more democratic?

Lijphart (1997) endorses compulsory voting as a means to increase voter turnout. Considering the likely effects of the role of information (including its costs) on the decision to vote and taking an expressive view of voting, however, compels us to investigate two unexamined claims by such advocates: (i) that individuals are transformed by forcing them to vote, and (ii) that a compulsory electoral outcome is a more accurate reflection of community preferences.We argue that compelling those who are not particularly interested in, or informed about, the political process to vote increases the proportion of random votes and we show that under simple majority rule, compulsory voting may violate the Pareto principle; the less popular candidate is more likely to be elected. Our results cast doubt on the ”miracle of aggregation“ argument, which optimistically concludes that as long as uninformed votes are not systematically biased, they will have no effect on voting outcomes. We also briefly consider how information cascades can exacerbate this problem.     

Stereotypes in Context: How and When Do Street‐Level Bureaucrats Use Class Stereotypes?

Stereotype use in street‐level work and discretionary judgments is important because of the possible introduction of bias. This article contributes to the study of stereotypes in street‐level work by suggesting that stereotypes are related to both cognitive and social uncertainties. A distinction between uncontrolled stereotype activation in the interpretation of information and controlled stereotype application in decision making is made to allow for a more nuanced study. A unique design combining semistructured interviews and a vignette experiment is presented to accommodate this theoretical framework. Results show that stereotype activation is conditioned by class difference and involves both categorization and simplified assumptions. Stereotype application is conditioned by class as well as by the homogeneity of the social contexts of street‐level institutions. These results suggest that in order to decrease stereotypical bias in frontline encounters, one solution may be to increase social heterogeneity.     

Robert D. Tollison and the economics of politics

This paper tracks economists’ rising, yet elusive and unstable interest in collective decision mechanism after World War II. We replace their examination of voting procedures and social welfare functions in the 1940s and 1950s in the context of their growing involvement with policy-making. Confronted with natural scientists’ and McCathythes’ accusations of ideological bias, positive studies emphasizing that collective decisions mechanisms were unstable and inefficient, and normative impossibilities, economists largely relied on the idea the policy ends they worked with reflected a “social consensus.” As the latter crumbled in the 1960s, growing disagreement erupted on how to identify and aggregate those individual values which economists believed should guide applied work, in particular in cost-benefit analysis. The 1970s and 1980s brought new approaches to collective decision: Arrow’s impossibility was solved by expanding the informational basis, it was showed that true preferences could be revealed by making decision costly, and experimentalists and market designers enabled these mechanisms to be tested in the lab before being sold to those public bodies looking for decision procedures that emulated markets. In this new regime, the focus paradoxically shifted to coordination, revelation and efficiency, and those economists studying collective decision processes were marginalized.     

THE CONSUMER INFORMATION OVERLOAD CONTROVERSY AND PUBLIC POLICY

It is widely believed that providing consumers with more product information produces "overload" and leads to confusion and poorer quality consumer decisions. The existence of a consumer information overload phenomenon has been used by marketers and others to argue against regulations and legislation mandating additional consumer information provision. The belief that a consumer information overload phenomenon exists is based largely on misinterpretations of research findings. The present paper reviews the consumer information overload research literature and concludes that existing research data support the contention that provision of more information, rather than producing overload, actually improves consumer decision making. Implications of the information overload research controversy for consumer policy makers are discussed.     

The Politics of Interpersonal Trust and Reciprocity: An Experimental Approach

Trust and reciprocity are theoretically essential to strong democracies and efficient markets. Working from the theoretical frameworks of social identity and cognitive heuristics, this study draws on dual-process models of decision making to expect (1) the trustor to infer trustworthiness from partisan stereotypes and thus to discriminate trust in favor of co-partisans and against rival partisans, but (2) the trustee to base reciprocity decisions on real information about the trustor’s deservingness rather than a partisan stereotype. So whereas partisanship is likely to trigger trust biases, the trust decision itself provides enough information to override partisan biases in reciprocity. The analysis derives from a modified trust game experiment. Overall, the results suggest partisanship biases trust decisions among partisans, and the degree of partisan trust bias is consistent with expectations from both social identity theory and cognitive heuristics. When it comes to reciprocity, however, information about the other subject’s level of trust nullifies partisan bias.     

Can decision transparency increase citizen trust in regulatory agencies? Evidence from a representative survey experiment

Decision transparency is often proposed as a way to maintain or even increase citizen trust, yet this assumption is still untested in the context of regulatory agencies. We test the effect of transparency of a typical decision tradeoff in regulatory enforcement: granting forbearance or imposing a sanction. We employed a representative survey experiment (n = 1,546) in which we test the effect of transparency in general (providing information about a decision or not) and the effect of specific types of transparency (process or rationale transparency). We do this for agencies supervising financial markets, education, and health care. We find that overall decision transparency significantly increases citizen trust in only two of the three agencies. Rationale transparency has a more pronounced positive effect only for the Education Inspectorate. We conclude that the overall effect of decision transparency is positive but that the nature of the regulatory domain may weaken or strengthen this effect.     

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.     

Public Management Decision Making: Effects of Decision Content

One obvious aspect of public management decisions and decision making has largely escaped attention—decision content. We examine the effects of decision content by asking the following questions for budget cutback and information technology decisions: How does content affect the time required for decision making? How does content affect who participates? How does content affect the decision criteria employed? How does content affect the information quality used in the decision-making process and red tape? The results suggest that information technology and budget cutback decisions differ in important ways. For information technology decisions, cost-effectiveness is not a significant criterion, average decision time is much longer, and decisions are generally viewed as permanent and stable. For cutback decisions, cost-effectiveness is a significant criterion, decisions are made much more quickly, and they are viewed as unstable and changeable. Surprisingly, decision content does not appear to affect the number of participants.     

Learning and signalling by advisor selection

In this paper we consider a model where a policy maker uses advice in order to (1) obtain information about the consequences of an innovation (information motive) and (2) to support political legitimacy of her decision (persuasion motive). We conduct our analysis in the context of a cheap-talk game with three players: (1) a policy maker, (2) the median voter in parliament or of the electorate and (3) an advisor. The advisor has private information about the consequences of policy. Communication between an advisor and a recipient improves as their preferences are closer aligned. If the preferences of the policy maker and the median voter are different the policy maker faces a trade-off. On the one hand, she wants to gain information to judge whether the innovation is worthwhile. On the other hand, she needs to convince the median voter whether the innovation is desirable.     

Candidate and party affective polarization in U.S. presidential elections: The person-negativity bias?

We investigate the degree of affective polarization in presidential election years toward the two major parties and their nominees. Notwithstanding studies which show that individuating information about an out-group member can generate a person-positivity bias, we demonstrate a person-negativity bias directed at out-party candidates at least for some. We motivate and test two hypotheses: first, we expect more sophisticated partisans to display a greater difference in their feelings towards specific candidates compared to evaluations of the parties themselves; second, we anticipate sophisticated partisans will exhibit a person-negativity bias toward out-party candidates and a person-positivity bias toward in-party candidates. The results accentuate the conditional nature of the person-positivity bias and shed light on how political sophistication is linked to affective polarization.     

Information,perceptions, and electoral behaviour of young voters: A randomised controlled experiment

The way people absorb and process politically relevant information is central to their subsequent political behaviour (in terms of turnout and vote choice). Nonetheless, little is known about how young voters – who might be more impressionable than more experienced voters – respond to the provision of such information. In this article, we design a between-subject randomised controlled trial that exposes a sample of university students to positive, neutral or negative information about central government performance before the 2017 Portuguese local elections. We find that young voters update their perceptions more when exposed to negative news. This negativity bias is stronger for first-time voters. We also find that negative information significantly affects turnout of initially undecided young voters. Our results imply that sensitivity to information is heterogeneous and that some young voters may be prone to manipulation through the provision of negative news.     

Consumer Decision Making in the Information Age

Providing people with more information and more options may seem as a good policy. However, because of limited attention and cognitive resources, people are not able to use all available information and freedom of choice effectively to achieve their own best interests. When cognitive resources and attention are depleted, decision making becomes shallow and intuitive, often unable to take important aspects of given situations into account – even though this information is readily available. An intuitive decision making may lead to suboptimal outcomes by overestimating the importance of the most salient cues and disregarding the less obvious future consequences. Although this creates a demand for decision making aides that could be satisfied by markets, policy regulation may be necessary in some areas. We provide specific examples of problems arising from limited attention together with solutions based on behavioral economics approach to policy making known as nudging.     

Reflections on theories of market efficiency

Market efficiency is determined by how efficiently markets capture the information. Efficient markets can capture and incorporate all the available information into stock prices within no time. It means market prices traded are the actual prices of shares. There have been many theories trying to debate about how to determine market efficiency. If markets are efficient, there is no scope for investors to earn abnormal returns on the investments. In that case, investments in markets would not provide any additional returns. There have been many debates and theories on the topic of market efficiency. Postmodern portfolio theory (PMPT) came into existence after almost 40 years of the modern theory of portfolio given by Henry Markowitz. Both the theories give a risk–return framework for decision making and there are many conflicting aspects of market efficiency. I try to address this issue in this paper that raises concerns for the investor as to which markets are called efficient and what contributes to market efficiency, as denoted in modern portfolio theory (MPT) and post modern portfolio theory (PMPT).     

The partisan heuristic and the voters’ knowledge: The essential role of the information environment

The low-information rationality theory expects voters with low political knowledge to make more use of the partisan heuristic than those with high knowledge. However, empirical studies on decision making in direct democracy observe a positive correlation between political knowledge and the use of party cues. We resolve this tension between theory and empirical evidence by demonstrating that the relationship between political knowledge and the use of party cues is conditional on the information environment. We provide evidence for this hypothesis by exploiting a natural experiment in Switzerland and analyze a large variety of direct democratic votes. The results show that voters with lower levels of political knowledge tend to align less with their preferred party because they often have a wrong perception of their preferred party’s vote recommendation. However, if information on parties’ position is easily available, their vote choice is at least as much in line with their preferred party as among those with high knowledge. This suggests that in such an information environment voters with low political knowledge strongly rely on the partisan heuristic. Our research note supports the low-information rationality theory and this way contributes to the literature on the quality of political opinion formation and the political psychology of reasoning and decision making.     

Does Compulsory Voting Increase Support for Leftist Policy?

Citizens unequally participate in referendums, and this may systematically bias policy in favor of those who vote. Some view compulsory voting as an important tool to alleviate this problem, whereas others worry about its detrimental effects on the legitimacy and quality of democratic decision making. So far, however, we lack systematic knowledge about the causal effect of compulsory voting on public policy. We argue that sanctioned compulsory voting mobilizes citizens at the bottom of the income distribution and that this translates into an increase in support for leftist policies. We empirically explore the effects of a sanctioned compulsory voting law on direct‐democratic decision making in Switzerland. We find that compulsory voting significantly increases electoral support for leftist policy positions in referendums by up to 20 percentage points. We discuss the implications of these results for our understanding of the policy consequences of electoral institutions.     

The first one wins: Distilling the primacy effect

Research has shown that in proportional, flexible list systems, ballot list position influences electoral success. In this paper we investigate to what extent this is due to the primacy effect, a psychological bias towards the first option in a list. We also examine alternative explanations such as the electoral beneficial traits these candidates share and extra media coverage they receive. Using data from the 2014 Belgian elections, we find that candidates with higher ballot list positions indeed score better because they have more political experience and receive more media attention. We also find strong evidence for the primacy effect which is caused by a confirmation bias as well as ballot list position being the easiest heuristic for voters.