IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp11364.html
   My bibliography  Save this paper

Does Decentralization of Decisions Increase the Stability of Large Groups?

Author

Listed:
  • Bjedov, Tjaša

    (Distance Learning University of Switzerland)

  • Lapointe, Simon

    (VATT, Helsinki)

  • Madies, Thierry

    (University of Fribourg)

  • Villeval, Marie Claire

    (CNRS, GATE)

Abstract

Using a laboratory experiment with nested local and global public goods, we analyze the stability of global groups when individuals have the option to separate, according to the degree of decentralization of decision-making. We show that increasing the number of decisions made at the local level within a smaller group reduces the likelihood that individuals vote in favor of a break-up of the global group. Voting for a break-up of the global group is more likely when global group members are less cooperative and local group members are more cooperative. Reinforcing local group identity has no impact on votes.

Suggested Citation

  • Bjedov, Tjaša & Lapointe, Simon & Madies, Thierry & Villeval, Marie Claire, 2018. "Does Decentralization of Decisions Increase the Stability of Large Groups?," IZA Discussion Papers 11364, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp11364
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp11364.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Alberto Alesina & Enrico Spolaore, 1997. "On the Number and Size of Nations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1027-1056.
    2. Wong, Maisy, 2014. "Estimating the distortionary effects of ethnic quotas in Singapore using housing transactions," Journal of Public Economics, Elsevier, vol. 115(C), pages 131-145.
    3. Ben Greiner, 2015. "Subject pool recruitment procedures: organizing experiments with ORSEE," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 1(1), pages 114-125, July.
    4. Matthias Sutter & Stefan Haigner & Martin G. Kocher, 2010. "Choosing the Carrot or the Stick? Endogenous Institutional Choice in Social Dilemma Situations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 77(4), pages 1540-1566.
    5. Jean‐Robert Tyran & Lars P. Feld, 2006. "Achieving Compliance when Legal Sanctions are Non‐deterrent," Scandinavian Journal of Economics, Wiley Blackwell, vol. 108(1), pages 135-156, March.
    6. Chakravarty, Surajeet & Fonseca, Miguel A., 2014. "The effect of social fragmentation on public good provision: An experimental study," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 53(C), pages 1-9.
    7. Matthew W. McCarter & Anya C. Samak & Roman M. Sheremeta, 2013. "Divided Loyalties or Conditional Cooperation? An experimental study of contributions to multiple public goods," Working Papers 13-08, Chapman University, Economic Science Institute.
    8. Ahmed, Ali M., 2007. "Group identity, social distance and intergroup bias," Journal of Economic Psychology, Elsevier, vol. 28(3), pages 324-337, June.
    9. Klaus Abbink & Jordi Brandts, 2016. "Political autonomy and independence: Theory and experimental evidence," Journal of Theoretical Politics, , vol. 28(3), pages 461-496, July.
    10. Maisy Wong, 2013. "Estimating Ethnic Preferences Using Ethnic Housing Quotas in Singapore," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 80(3), pages 1178-1214.
    11. Yoav Wachsman, 2002. "The Effects of Group Interaction in a Public Goods Experiment With Two Exchanges," Working Papers 200205, University of Hawaii at Manoa, Department of Economics.
    12. Karl-Martin Ehrhart & Claudia Keser, 1999. "Mobility and Cooperation: On the Run," CIRANO Working Papers 99s-24, CIRANO.
    13. Mark Isaac, R. & McCue, Kenneth F. & Plott, Charles R., 1985. "Public goods provision in an experimental environment," Journal of Public Economics, Elsevier, vol. 26(1), pages 51-74, February.
    14. Erzo F. P. Luttmer, 2001. "Group Loyalty and the Taste for Redistribution," Journal of Political Economy, University of Chicago Press, vol. 109(3), pages 500-528, June.
    15. Calvin Blackwell & Michael McKee, 2010. "Is There a Bias Toward Contributing to Local Public Goods? Cultural Effects," Forum for Social Economics, Taylor & Francis Journals, vol. 39(3), pages 243-257, January.
    16. Kohei Nitta, 2014. "The Effect of Income Heterogeneity in An Experiment with Global and Local Public Goods," Working Papers 201403, University of Hawaii at Manoa, Department of Economics.
    17. Fellner, Gerlinde & Lünser, Gabriele K., 2014. "Cooperation in local and global groups," Journal of Economic Behavior & Organization, Elsevier, vol. 108(C), pages 364-373.
    18. Patrick Bolton & Gérard Roland, 1997. "The Breakup of Nations: A Political Economy Analysis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1057-1090.
    19. Blackwell, Calvin & McKee, Michael, 2003. "Only for my own neighborhood?: Preferences and voluntary provision of local and global public goods," Journal of Economic Behavior & Organization, Elsevier, vol. 52(1), pages 115-131, September.
    20. Hoffman, Elizabeth & McCabe, Kevin & Smith, Vernon L, 1996. "Social Distance and Other-Regarding Behavior in Dictator Games," American Economic Review, American Economic Association, vol. 86(3), pages 653-660, June.
    21. Urs Fischbacher & Simon Gachter, 2010. "Social Preferences, Beliefs, and the Dynamics of Free Riding in Public Goods Experiments," American Economic Review, American Economic Association, vol. 100(1), pages 541-556, March.
    22. Lapointe, Simon, 2018. "“Love thy neighbour”? The effect of income and language differences on votes for municipal secessions," Regional Science and Urban Economics, Elsevier, vol. 70(C), pages 229-245.
    23. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    24. R. Mark Isaac & James M. Walker, 1988. "Group Size Effects in Public Goods Provision: The Voluntary Contributions Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(1), pages 179-199.
    25. Pedro Dal Bo & Andrew Foster & Louis Putterman, 2010. "Institutions and Behavior: Experimental Evidence on the Effects of Democracy," American Economic Review, American Economic Association, vol. 100(5), pages 2205-2229, December.
    26. R. Isaac & James Walker & Susan Thomas, 1984. "Divergent evidence on free riding: An experimental examination of possible explanations," Public Choice, Springer, vol. 43(2), pages 113-149, January.
    27. Putterman, Louis & Tyran, Jean-Robert & Kamei, Kenju, 2011. "Public goods and voting on formal sanction schemes," Journal of Public Economics, Elsevier, vol. 95(9), pages 1213-1222.
    28. Armin Falk & Urs Fischbacher & Simon Gächter, 2013. "Living In Two Neighborhoods—Social Interaction Effects In The Laboratory," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 563-578, January.
    29. Matthew W. McCarter & Anya C. Samak & Roman M. Sheremeta, 2014. "Divided Loyalists or Conditional Cooperators? Creating Consensus about Cooperation in Multiple Simultaneous Social Dilemmas," Working Papers 14-16, Chapman University, Economic Science Institute.
    30. Thomas Markussen & Louis Putterman & Jean-Robert Tyran, 2014. "Self-Organization for Collective Action: An Experimental Study of Voting on Sanction Regimes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(1), pages 301-324.
    31. Wit, Arjaan P. & Wilke, Henk A. M., 1992. "The effect of social categorization on cooperation in three types of social dilemmas," Journal of Economic Psychology, Elsevier, vol. 13(1), pages 135-151, March.
    32. Cinyabuguma, Matthias & Page, Talbot & Putterman, Louis, 2005. "Cooperation under the threat of expulsion in a public goods experiment," Journal of Public Economics, Elsevier, vol. 89(8), pages 1421-1435, August.
    33. Lustick, Ian S. & Miodownik, Dan & Eidelson, Roy J., 2004. "Secessionism in Multicultural States: Does Sharing Power Prevent or Encourage It?," American Political Science Review, Cambridge University Press, vol. 98(2), pages 209-229, May.
    34. Ceron, Andrea, 2015. "The Politics of Fission: An Analysis of Faction Breakaways among Italian Parties (1946–2011)," British Journal of Political Science, Cambridge University Press, vol. 45(1), pages 121-139, January.
    35. George A. Akerlof & Rachel E. Kranton, 2000. "Economics and Identity," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 715-753.
    36. Buchan, Nancy R. & Johnson, Eric J. & Croson, Rachel T.A., 2006. "Let's get personal: An international examination of the influence of communication, culture and social distance on other regarding preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 60(3), pages 373-398, July.
    37. Charness, Gary & Yang, Chun-Lei, 2014. "Starting small toward voluntary formation of efficient large groups in public goods provision," Journal of Economic Behavior & Organization, Elsevier, vol. 102(C), pages 119-132.
    38. Bernasconi, Michele & Corazzini, Luca & Kube, Sebastian & Maréchal, Michel André, 2009. "Two are better than one!: Individuals' contributions to "unpacked" public goods," Economics Letters, Elsevier, vol. 104(1), pages 31-33, July.
    39. Talbot Page & Louis Putterman & Bulent Unel, 2005. "Voluntary Association in Public Goods Experiments: Reciprocity, Mimicry and Efficiency," Economic Journal, Royal Economic Society, vol. 115(506), pages 1032-1053, October.
    40. Ananish Chaudhuri, 2011. "Sustaining cooperation in laboratory public goods experiments: a selective survey of the literature," Experimental Economics, Springer;Economic Science Association, vol. 14(1), pages 47-83, March.
    41. Rege, Mari & Telle, Kjetil, 2004. "The impact of social approval and framing on cooperation in public good situations," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1625-1644, July.
    42. Enrico Spolaore, 2010. "Federalism, Regional Redistribution and Country Stability," Chapters, in: Núria Bosch & Marta Espasa & Albert Solé Ollé (ed.), The Political Economy of Inter-Regional Fiscal Flows, chapter 13, Edward Elgar Publishing.
    43. Ehrhart, Karl-Martin & Keser, Claudia, 1999. "Mobility and cooperation: on the run," Sonderforschungsbereich 504 Publications 99-69, Sonderforschungsbereich 504, Universität Mannheim;Sonderforschungsbereich 504, University of Mannheim.
    44. Jeffrey Carpenter & Juan Camilo Cardenas, 2011. "An Intercultural Examination of Cooperation in the Commons," Journal of Conflict Resolution, Peace Science Society (International), vol. 55(4), pages 632-651, August.
    45. Yan Chen & Sherry Xin Li, 2009. "Group Identity and Social Preferences," American Economic Review, American Economic Association, vol. 99(1), pages 431-457, March.
    46. Angela Oliveira & Rachel Croson & Catherine Eckel, 2015. "One bad apple? Heterogeneity and information in public good provision," Experimental Economics, Springer;Economic Science Association, vol. 18(1), pages 116-135, March.
    47. Brancati, Dawn, 2014. "Another Great Illusion:1 The Advancement of Separatism through Economic Integration," Political Science Research and Methods, Cambridge University Press, vol. 2(1), pages 69-95, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Haruvy, Ernan & Li, Sherry Xin & McCabe, Kevin & Twieg, Peter, 2017. "Communication and visibility in public goods provision," Games and Economic Behavior, Elsevier, vol. 105(C), pages 276-296.
    2. Gürerk, Özgür & Irlenbusch, Bernd & Rockenbach, Bettina, 2014. "On cooperation in open communities," Journal of Public Economics, Elsevier, vol. 120(C), pages 220-230.
    3. Astrid Dannenberg & Corina Haita-Falah & Sonja Zitzelsberger, 2020. "Voting on the threat of exclusion in a public goods experiment," Experimental Economics, Springer;Economic Science Association, vol. 23(1), pages 84-109, March.
    4. Ramalingam, Abhijit & Stoddard, Brock V. & Walker, James M., 2019. "The market for talent: Competition for resources and self-governance in teams," Games and Economic Behavior, Elsevier, vol. 114(C), pages 268-284.
    5. Guido, Andrea & Robbett, Andrea & Romaniuc, Rustam, 2019. "Group formation and cooperation in social dilemmas: A survey and meta-analytic evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 192-209.
    6. Marco Catola & Simone D'Alessandro & Pietro Guarnieri & Veronica Pizziol, 2020. "Multilevel Public Goods Game: an Online Experiment," Discussion Papers 2020/263, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    7. Kamei, Kenju, 2019. "Cooperation and Endogenous Repetition in an Infinitely Repeated Social Dilemma: Experimental Evidence," MPRA Paper 92097, University Library of Munich, Germany.
    8. Gallier, Carlo & Goeschl, Timo & Kesternich, Martin & Lohse, Johannes & Reif, Christiane & Römer, Daniel, 2019. "Leveling up? An inter-neighborhood experiment on parochialism and the efficiency of multi-level public goods provision," Journal of Economic Behavior & Organization, Elsevier, vol. 164(C), pages 500-517.
    9. Alexander Smith & Xi Wen, 2017. "Investing in institutions for cooperation," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 3(1), pages 75-87, July.
    10. Kenju Kamei, 2019. "Cooperation and endogenous repetition in an infinitely repeated social dilemma," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(3), pages 797-834, September.
    11. Takeuchi, Ai & Seki, Erika, 2023. "Coordination and free-riding problems in the provision of multiple public goods," Journal of Economic Behavior & Organization, Elsevier, vol. 206(C), pages 95-121.
    12. Kenju Kamei & Louis Putterman & Jean-Robert Tyran, 2015. "State or nature? Endogenous formal versus informal sanctions in the voluntary provision of public goods," Experimental Economics, Springer;Economic Science Association, vol. 18(1), pages 38-65, March.
    13. Brown, Christopher L., 2024. "Team production in endogenous networks," Journal of Economic Behavior & Organization, Elsevier, vol. 217(C), pages 560-580.
    14. Astrid Dannenberg & Carlo Gallier, 2020. "The choice of institutions to solve cooperation problems: a survey of experimental research," Experimental Economics, Springer;Economic Science Association, vol. 23(3), pages 716-749, September.
    15. Michalis Drouvelis & Julian C. Jamison, 2015. "Selecting public goods institutions: Who likes to punish and reward?," Southern Economic Journal, John Wiley & Sons, vol. 82(2), pages 501-534, October.
    16. Nicklisch, Andreas & Grechenig, Kristoffel & Thöni, Christian, 2016. "Information-sensitive Leviathans," Journal of Public Economics, Elsevier, vol. 144(C), pages 1-13.
    17. Karakostas, Alexandros & Kocher, Martin G. & Matzat, Dominik & Rau, Holger A. & Riewe, Gerhard, 2023. "The team allocator game: Allocation power in public goods games," Games and Economic Behavior, Elsevier, vol. 140(C), pages 73-87.
    18. KAMEI Kenju, 2022. "Self-regulatory Resources and Institutional Formation: A first experimental test," Discussion papers 22084, Research Institute of Economy, Trade and Industry (RIETI).
    19. Angelovski, Andrej & Di Cagno, Daniela & Güth, Werner & Marazzi, Francesca & Panaccione, Luca, 2018. "Behavioral spillovers in local public good provision: An experimental study," Journal of Economic Psychology, Elsevier, vol. 67(C), pages 116-134.
    20. Markussen, Thomas & Putterman, Louis & Tyran, Jean-Robert, 2016. "Judicial error and cooperation," European Economic Review, Elsevier, vol. 89(C), pages 372-388.

    More about this item

    Keywords

    break-up of groups; decision rights; voting behavior; public goods; experiment;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp11364. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.