Essays on Voting and Ex-Ante Incentives

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dc.contributor Aalto-yliopisto fi
dc.contributor Aalto University en
dc.contributor.author Mäkelä, Paula
dc.date.accessioned 2015-09-04T10:15:07Z
dc.date.available 2015-09-04T10:15:07Z
dc.date.issued 2015
dc.identifier.isbn 978-952-60-6251-8 (electronic)
dc.identifier.isbn 978-952-60-6250-1 (printed)
dc.identifier.issn 1799-4942 (electronic)
dc.identifier.issn 1799-4934 (printed)
dc.identifier.issn 1799-4934 (ISSN-L)
dc.identifier.uri https://aaltodoc.aalto.fi/handle/123456789/17614
dc.description Julkaistu vain painettuna, saatavuus katso Bibid. Published only in printed form, availability see Bibid
dc.description.abstract In the first two essays of this thesis we consider an agent seeking a renewal of his fixed-term employment contract. The renewal depends on the outcome of a review performed by a committee of principals. Depending on the agent's past performance, some principals find it optimal to reappoint the agent while the others do not. In particular, each principal has a private threshold that reflects the minimum requirements the agent should have fulfilled in order to become reappointed. All principals agree, however, that the better the agent has performed, the greater their payoff from the reappointment. Each principal reviews a different part of the agent's performance, and the final decision on the renewal is made collectively by voting.  In the first essay of this thesis we analyze a scenario where all communication is prohibited. The contributions of the essay are twofold. First, we show that informative voting constitutes an equilibrium whenever the number of votes required for the reappointment is sufficiently high. Second, we show that the game possesses a responsive equilibrium under all voting rules.  In the second essay of this thesis we then allow the principals to engage in a pre-vote deliberation. We establish the necessary conditions under which the game with communication possesses a fully revealing equilibrium. We then compare the principals' expected payoffs in the fully revealing equilibrium to their expected payoffs in the pure voting game. In contrast to common conception, we find that in some circumstances, the principals' expected payoffs in the pure voting game actually exceed those in the game with communication. That is, it may sometimes be in the principals' best interest to waive the opportunity to communicate and just vote. The underlying intuition is that the coordination failures that prevail in the pure voting game may actually force the agent to perform at a level beyond that in the game with communication. In the third essay we return to study a pure voting game, but modify the above framework by adding uncertainty into the principals' ability to review the agent's performance. In this revised setup, we show that for large committees, non-unanimous voting rules fully aggregate the available information and eliminate all decision-making errors. As a result, the agent's incentives are not distorted by the voters' inability to efficiently aggregate information and his optimal strategy thus coincides with the one that is socially optimal. For committees of reasonable sizes, we find that the agent's incentives may feature non-monotone behavior with respect to both the voter's threshold of reasonable doubt and the voting rule. This suggests that the agent is provided with maximal incentives by a committee whose standards are strict but yet attainable. en
dc.format.extent 136
dc.language.iso en en
dc.publisher Aalto University en
dc.publisher Aalto-yliopisto fi
dc.relation.ispartofseries Aalto University publication series DOCTORAL DISSERTATIONS en
dc.relation.ispartofseries 84/2015
dc.relation.haspart ”Voting and Ex-Ante Incentives, Part I: The Case Without Communication”, unpublished.
dc.relation.haspart ”Voting and Ex-Ante Incentives, Part II: The Case With Communication”, unpublished.
dc.relation.haspart ”On the Optimality of Unanimity Rule with Common Preferences and Endogenous State”, unpublished.
dc.subject.other Economics en
dc.title Essays on Voting and Ex-Ante Incentives en
dc.type G5 Artikkeliväitöskirja fi
dc.contributor.school Kauppakorkeakoulu fi
dc.contributor.school School of Business en
dc.contributor.department Taloustieteen laitos fi
dc.contributor.department Department of Economics en
dc.subject.keyword Voting en
dc.subject.keyword incentives en
dc.subject.keyword communication en
dc.identifier.urn URN:ISBN:978-952-60-6251-8
dc.type.dcmitype text en
dc.type.ontasot Doctoral dissertation (article-based) en
dc.type.ontasot Väitöskirja (artikkeli) fi
dc.contributor.supervisor Välimäki, Juuso, Prof., Aalto University, Department of Economics, Finland
dc.opn Kultti, Klaus, Prof., University of Helsinki, Finland
dc.subject.helecon economic science
dc.subject.helecon microeconomics
dc.subject.helecon communication
dc.subject.helecon voting
dc.subject.helecon taloustieteet
dc.subject.helecon mikrotalous
dc.subject.helecon viestintä
dc.subject.helecon äänestäminen
dc.date.defence 2015-08-07
dc.identifier.bibid 713985


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