We use large unpublished data set about the prices by store of 381 products collected by the Israeli bureau of statistics during 1991-92 in the process of computing the CPI. On average 24% of the stores changed * This paper benefited from comments provided by the participants of the workshop at the Chicago Fed and by comments provided by Jeff Campbell.
This study shows that distortion of probabilities is a possible reason for rent under-dissipation in contests with relatively small number of participants. Such distortion may also result, however, in over-dissipation of the contested rent. Focusing on contests with homogeneous contestants and the commonly studied contest success function, our main results clarify under what circumstances (i) rents are more under-dissipated relative to the standard situation where probabilities are not distorted (ii) rents are under-dissipated, yet less intensely relative to the standard situation where probabilities are not distorted (iii) rents are over-dissipated and (iv) the contest does not possess a symmetric interior equilibrium in pure strategies.* We are grateful to the participants in the conference on ÔAdvances in the Theory of Contests and TournamentsÕ, WZB, Berlin, October 2005 and, in particular, to two anonymous referees for their useful comments and suggestions. The second author is grateful to the Adar Fund for its financial support.1 There are two exceptions. First, under independent preferences, over-dissipation is impossible in purestrategy equilibria, however, it is possible ex post for particular realisations of playersÕ mixed strategies, see Baye et al. (1999). Second, in evolutionary equilibrium, negatively interdependent preferences may induce spiteful behaviour (contestants behave as if they aim to maximise their relative payoff) that results in rent over-dissipation, see Guse and Hehenkamp (2005) and references therein.
I n pairwise voting, when a simple majority rule produces a winner, that winner is robust to the minority's preferences. The typical means of protecting the minority from the decisiveness of the majority is by increasing the required majority or by augmenting the simple majority rule with constitutional constraints. In the former case the required majority q becomes larger than one-half, and this implies that the q-majority rule becomes biased in favor of one of the alternatives, usually the status quo. In the latter case the augmented rule becomes biased in favor of the minority. The main issue examined in this paper is whether the amelioration of majority decisiveness can be attained by unbiased voting rules that allow some restricted expression of preference intensities. Our results clarify that the use of scoring rules provides a positive answer to the above question when voters resort to variable degrees of coordinated strategic voting. The results are illustrated in the special cases of the plurality and the Borda rules.
Given the judgments of multiple voters regarding some issue, it is generally assumed that the best way to arrive at some collective judgment is by following the majority. We consider here the now common case in which each voter expresses some (binary) judgment regarding each of a multiplicity of independent issues and assume that each voter has some fixed (unknown) probability of making a correct judgment for any given issue. We leverage the fact that multiple votes by each voter are known in order to demonstrate, both analytically and empirically, that a method based on maximum likelihood estimation is superior to the simple majority rule for arriving at true collective judgments.
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