Collective Choice and Producer Cartels
{'Code': '04050200', 'Directorate': {'Abbreviation': 'SBE', 'LongName': 'Direct For Social, Behav & Economic Scie'}, 'Division': {'Abbreviation': 'SES', 'LongName': 'Divn Of Social and Economic Sciences'}}
{'SignBlockName': 'Frank P. Scioli  Jr.', 'PO_EMAI': None, 'PO_PHON': None}
Agricultural marketing boards, producer cartels,                                international commodity organizations, and prorationing boards                  typically restrict output based on a committee decision.  The                   decision is generally the result of a vote.  The behavior of such               organizations obviously has important economic                                  consequences.  Nonetheless, the voting aspect of the decision                   making has previously received no attention from the                            economics profession.The purpose of this investigation is to                    develop models which will permit a better understanding of the                  decisions such organizations will make.                                         In their prior research the investigators developed a number                    of propositions concerning agricultural marketing boards.  The                  same propositions were then shown to hold for producer cartels                  provided members differed only in size or capacity, not cost.  In               this research the investigators reexamine the propositions when                 members may also differ in their costs.  While some of the                      earlier propositions remain true (even if their proofs must be                  revised to incorporate new assumptions), several propositions are               no longer valid.  For example, if cartel members differ only in                 size, the quota selected will result in a lower price than the                  quota which maximizes profits.  That is, the aspect of marketing                boards which is typically neglected makes them more competitive                 than is commonly supposed.  However, if cartel members                          have different costs, it turns out that the result may be                       reversed:  the quota voted for may be even tighter than the quota               which maximizes joint profits.                                                  The methodology of this project is straight forward.  The profits               which each voter would receive in the economic game which follows               selection of any given quota are first deduced.  These "induced                 preferences "(equilibrium profits to each voter as a function of                the scalar quota) are then used to examine the equilibrium in the               prior voting game.  The result is a joint political/economic                    equilibrium.  Given exogenous data on costs, demand, capacity,                  the voting rules, and the composition of the committee, the model               can be used to predict how each committee member will vote, what                quota will be selected, and what economic consequences will                     follow.                                                                         From the view point of economics, this research is valuable                     because it addresses an important but overlooked aspect of volume               restricting organizations.  From the viewpoint of voting theory                 in political science, the research is valuable and important                    because a natural sufficiency condition for the existence of a                  Condorcet point is proved which does not involve single                         peakedness of the induced preferences.  Finally, from a policy                  point of view the research leads to revised assessments of the                  welfare losses from cartels and marketing boards.  Moreover, the                model clarifies how political interventions can have economic                   effects.  Changes in the composition of the committee, the                      weights attached to their votes, and other exogenous                            political factors induce economic consequences.
{'FirstName': 'Stephen', 'LastName': 'Salant', 'PI_MID_INIT': 'W', 'PI_SUFX_NAME': None, 'PI_FULL_NAME': 'Stephen W Salant', 'EmailAddress': 'ssalant@umich.edu', 'NSF_ID': '000477577', 'StartDate': '05/01/1988', 'EndDate': None, 'RoleCode': 'Principal Investigator'}
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[{'Code': '1320', 'Text': 'Economics'}, {'Code': '1371', 'Text': 'Political Science'}]
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