Katri K. Sieberg

Some Surprising Properties of Power Indices

A troubling aspect about power indices is how the values assigned to players can depend upon the index. As shown, the problem is more severe; different indices can generate radically different rankings; e.g., a 15-player game exists with over a trillion different strict power index rankings of the players. It is shown that certain indices always share the same ranking, but this assertion depends on the number of players; e.g., the Shapley and Banzhaf rankings agree with three players, but with more players they can even have opposite rankings. It is also shown how changes in certain assumptions affect the outcomes. This includes demonstrating how the rankings change when players drop out of a game.

Bobbing for Widgets: Compensating Wage Differentials

The authors describe a classroom game that introduces the concept of compensating wage differentials by allowing students to negotiate over the assignment of jobs and wages. Two jobs are designed so that neither job requires special skills, but one is significantly more unpleasant than the other. By varying the job titles and duties, students can see how wages respond to changes in job characteristics. The impact of various policy measures, such as comparable worth legislation and safety regulation, is also explored. This game can be conducted in a 50-minute class and requires only a deck of cards, poker chips, and a container of ice water.

An Experimental Study of Jury Voting Behavior

This chapter uses experimental analysis to test the Feddersen and Pesendorfer (American Political Science Review 92(1):23–35, 1998) theoretical results regarding the Condorcet jury theorem. Under the assumption that jurors will vote strategically (rather than sincerely based on private information), Feddersen and Pesendorfer derive the surprising conclusion that a unanimity rule makes the conviction of innocent defendants more likely, as compared with majority rule voting. Previous experimental work largely supported these theoretical predictions regarding strategic individual behavior, but failed to find support for the conclusions about the relative merits of unanimity and majority rule procedures in terms of group decisions. We extend this literature with an experiment in which the cost of convicting an innocent defendant is specified to be more severe than the cost of acquitting a guilty defendant. This payoff asymmetry results in a higher threshold of reasonable doubt than the 0.5 level used in earlier studies. We find very little evidence of the strategic voting predicted by theory (even for our asymmetric payoff structure) and no difference between the use of unanimity and majority rules. Overall, it was very difficult for the juries in our experiment to achieve a conviction, and no incorrect convictions occurred. Our experimental results suggest that the standard risk neutrality assumption can lead to misleading conclusions. We argue that a high cost associated with convicting the innocent can interact with risk aversion to produce an even higher threshold of reasonable doubt than would result from risk neutrality, which tends to neutralize the negative effects of strategic voting under a unanimity rule.

Deciding How to Choose the Healthcare System

The continuing debate in the United States over the form of health care provision is illustrative as to how difficult that choice can be. The choice is further complicated by political activity—lobbyists with a vested interest in various formats—and a noticeable effect from path dependence—people are used to what they have and are afraid of change, and some groups actually stand to lose from change, at least in the short run. What might the decision have been in the absence of these effects? This chapter creates a model to explore this question. In particular, we appeal to insights from Buchanan and Tullock (1962), Rawls (1971) and Kornai and Eggleston (2001) to ask what type of health care provision would a polity choose from behind the veil of ignorance, and what type of mechanism—unanimity (constitutional) or majority (legislative) would they prefer to use to select it?

Is There a Doctor in the House

What is the most efficient type of healthcare system? This question resonates globally, as governments seek to ensure that their citizens are provided with adequate care while simultaneously attempting to control costs. A vast literature addresses the various advantages and disadvantages of private versus public systems in meeting these two goals. Summers (1989) suggests that an optimal system would combine a public system—to ensure universal coverage—with some private alterative, so that those who were willing and able to pay for extra services would be able to use their resources to provide a better fit to their wants and needs. Appealing to the benefits of a simple economic model, and using the case of Finland as an example, our paper examines this option.