Publications des chercheurs de PSE

We study how do-or-die threats ending negotiations affect gridlock and welfare when two opposing parties bargain. Failure to agree on a deal in any period implies a continuation of the negotiation. However, under brinkmanship, agreement failure in any period may precipitate a crisis with a small chance. In equilibrium, such brinkmanship threats improve the probability of an agreement, but also increase the risk of crisis. Brinkmanship reduces welfare when one might think it is most needed: severe gridlock. In this case, despite this global welfare loss, a party has incentives to use brinkmanship strategically to obtain a favorable bargaining position

This paper examines the comparative properties of voting rules based on the richness of their ballot spaces, assuming a given distribution of voting rights. We focus on how well voting rules aggregate the information dispersed among voters. We consider how different voting rules affect both voters’ decisions at the voting stage and the incentives of the agenda-setter, who decides whether to put the proposal to a vote. Without agenda-setter, the voting efficiency of rules is higher when their ballot space is richer. Moreover, full-information efficiency requires full divisibility of the votes. In the presence of an agenda-setter, we uncover a novel trade-off: in some cases, rules with high voting efficiency provide worse incentives to the agenda-setter to select good proposals. This negative effect can be large enough to wash out the higher voting efficiency of even the most efficient rules.

We study how voting rules shape voter coordination in large three-candidate elections. We consider three rules, that differ on the number of candidates that voters can support: Plurality (one), Anti-Plurality (two) and Approval Voting (one or two). We show that the Condorcet winner is always elected at some equilibrium under Approval Voting, and that this rule provides better welfare guarantees than Plurality. We then numerically study a dynamic process of political tâtonnement which delivers rich insights. The Condorcet winner is virtually always elected under Approval Voting, but not under the other rules. The dominance of Approval Voting is robust to several alternative welfare criteria and the introduction of expressive voters.

We propose a general model of repeated voting in committees and study equilibrium behavior under alternative majority rules. We find that repetition may significantly increase the efficiency of majority voting through a mechanism of intertemporal logrolling, agents sometimes voting against their immediate preference to benefit the group’s long-term interest. In turn, this affects the comparison of majority rules, which may differ significantly relative to the static setting. The model provides a rationale for the use of super-majority rules, while accounting for the prevalence of consensus in committee voting.

We study how investors’ beliefs about firm value, and hence their willingness to trade, respond to the release of public information. We consider a standard rational expectations model with homogeneous investors (common preferences, priors, and opinions) with the novelty that information, both public and private, pertains to the decisions the firm will make in the future and whether it is value-enhancing (what we refer to as the path-forward), instead of being directly about the value of the firm. Our analysis shows that, counter to the received wisdom, standard models can explain the well-documented pattern of increased in disagreement and trade volume after public announcements. Two economic insights emerge. First, investors holding different information about the path-forward of the firm may nonetheless have the same assessment of the firm’s value. The release of public information may then reinforce or contradict interim beliefs about the path-forward, and hence lead to divergence in investors’ assessments of the firm’s value and then an increase in trade volume. Second, investors who participate in shareholders’ meetings may have an informational advantage relative to investors that observe only public information about the meeting. The former group know both how they voted and their private information before voting, while others only know the total vote tally. The exploitation of that advantage leads to a surge in trade after public disclosure of meeting outcomes.

This paper studies the informational e¢ ciency of voting mechanisms in shareholder meetings. When the management cannot a¤ect the proposal being voted on, we show that voting mechanisms are more e¢ cient when their ballot space is richer. Moreover, e¢ ciency requires full divisibility of the votes. When the management has agenda power, we uncover a novel trade-o¤: more e¢ cient mechanisms provide worse incentives to select good proposals. This negative e¤ect can be large enough to wash out the higher voting e¢ ciency of even the most e¢ cient mechanisms.

Launched in 2019, the French Citizens’ Convention for Climate (CCC) tasked 150 randomly-chosen citizens with proposing fair and effective measures to fight climate change. This was to be fulfilled through an “innovative co-construction procedure,” involving some unspecified external input alongside that from the citizens. Did inputs from the steering bodies undermine the citizens’ accountability for the output? Did co-construction help the output resonate with the general public, as is expected from a citizens’ assembly? To answer these questions, we build on our unique experience in observing the CCC proceedings and documenting them with qualitative and quantitative data. We find that the steering bodies’ input, albeit significant, did not impair the citizens’ agency, creativity and freedom of choice. While succeeding in creating consensus among the citizens who were involved, this co-constructive approach however failed to generate significant support among the broader public. These results call for a strengthening of the commitment structure that determines how follow-up on the proposals from a citizens’ assembly should be conducted.

Voters have strong incentives to increase their influence by trading votes, acquiring others' votes when preferences are strong in exchange for giving votes away when preferences are weak. But is vote trading welfare-improving or welfare-decreasing? For a practice long believed to be central to collective decisions, the lack of a clear answer is surprising. We review the theoretical literature and, when available, its related experimental tests. We begin with the analysis of logrolling – the exchange of votes for votes. We then focus on vote markets, where votes can be traded against a numeraire. We conclude with procedures allowing voters to shift votes across decisions – to trade votes with oneself only. We find that vote trading and vote markets are typically inefficient; more encouraging results are obtained by allowing voters to allocate votes across decisions.

We study how voting rules shape voter coordination in large three-candidate elections. We consider three rules, varying according to the number of candidates that voters can support in their ballot: Plurality (one), Anti-Plurality (two) and Approval Voting (one or two). We show that the Condorcet winner—a normatively desirable candidate—can always be elected at equilibrium under Approval Voting. We then numerically study a dynamic process of political tâtonnement. Monte-Carlo simulations of the process deliver rich insights on election outcomes. The Condorcet winner is virtually always elected under Approval Voting, but not under the other rules. The dominance of Approval Voting is robust to alternative welfare criteria and to the introduction of expressive voters.

We study the design of voting rules for committees representing heterogeneous groups (countries, states, districts) when cooperation among groups is voluntary. While efficiency recommends weighting groups proportionally to their stakes, we show that accounting for participation constraints entails overweighting some groups, those for which the incentive to cooperate is the lowest. When collective decisions are not enforceable, cooperation induces more stringent constraints that may require granting veto power to certain groups. In the benchmark case where groups differ only in their population size (i.e., the apportionment problem), the model provides a rationale for setting a minimum representation for smaller groups.

Les citoyens membres de la Convention Citoyenne pour le Climat (CCC) sont-ils représentatifs des Français ? Ces derniers approuvent-ils les politiques climatiques proposées par la Convention ? Cette note aborde ces questions en comparant les points de vue des citoyens de la Convention avec ceux d’échantillons représentatifs de la population générale interrogés avant que les mesures proposées par la CCC soient diffusées publiquement.

We analyze Approval Voting in Poisson games endowing voters with private values over three candidates. We firsts how that any stable equilibrium is discriminatory: one candidate is commonly regarded as out of contention. We fully characterize stable equilibria and divide them into two classes. In direct equilibria, best responses depend only on ordinal preferences. In indirect equilibria, preference intensities matter. Counter-intuitively, any stable equilibrium violates the ordering conditions, a set of belief restrictions used to derive early results in the literature. We finally use Monte-Carlo simulations to estimate the prevalence of the different sorts of equilibria and their likelihood to elect a Condorcet winner.