Sabine Flamand


A Review on “Basic Income: A Radical Proposal for a Free Society and a Sane Economy”, by Phillipe Van Paris and Yannick Vanderborght

Joint with Caterina Calsamiglia

Journal of Economic Literature, forthcoming.

Strategic Choice of Sharing Rules in Collective Contests

Joint with Pau Balart and Orestis Troumpounis: paper in PDF

Social Choice and Welfare, Vol. 46, Issue 2, pp. 239-262, 2016.

Abstract: Competition between groups often involve prizes that have both a public and a private component. The exact nature of the prize not only affects the strategic choice of the sharing rules determining its allocation but also gives rise to an interesting phenomenon not observed when the prize is either purely public or purely private. Indeed, we show that in the two-groups contest, for most degrees of privateness of the prize, the large group uses its sharing rule as a mean to exclude the small group from the competition, a situation called monopolization. Conversely, there is a degree of relative privateness above which the small group, besides being active, even outperforms the large group in terms of winning probabilities, giving rise to the celebrated group size paradox.

Interregional Transfers, Group Loyalty and the Decentralization of Redistribution

Paper in PDF

Economics of Governance, Vol. 16, Issue 4, pp. 307-330, 2015.

Abstract: We study the relative merits of centralized and decentralized redistribution in a political economy context assuming cross-regional heterogeneity in average income and identity. While centralizing redistribution allows for a potentially beneficial pooling of national resources, it may decrease the degree of solidarity in the society as a result of group loyalty. We show that total welfare maximization is closely linked to the minimization of inequality within and between regions. Analyzing separately two particular cases under direct democracy ---no interregional inequality and no group loyalty--- we stress the existence of a scope effect and a pooling effect of centralized redistribution, respectively. In both cases, centralization welfare-dominates decentralization, from which it follows that the rationale for decentralization only arises when the two sources of cross-regional heterogeneity interact.

Participation Quorums in Costly Meetings

Joint with Orestis Troumpounis: paper in PDF and ONLINE APPENDIX

Public Choice, Vol. 159, No. 1, pp. 53-62, 2014.

Abstract: Meetings of shareholders, societies, and clubs often require a minimal participation quorum. In the absence of a quorum, no valid decisions can be made, and decisions are thus postponed to a later meeting. This paper examines the effect of such quorum constraints on both individual behavior and collective outcomes in a model of costly meetings based on Osborne et al. (2000). We show that when a binding quorum constraint delivers an undelayed decision, it also induces a welfare loss with respect to the outcome that prevails when no quorum applies, possibly including policy distortions. When the quorum is high and causes the decision to be postponed, the number of participants in the (second) meeting may decrease with respect to the zero-quorum rule.

Book Chapters

Prize-sharing rules in collective rent-seeking

Joint with Orestis Troumpounis

To appear in Companion to the Political Economy of Rent Seeking, Roger D. Congleton and Arye L. Hillman (Editors), Cheltenham, UK and Northampton, MA, USA: Edward Elgar Publishing, 2015.

Abstract: In this chapter, we review our knowledge as to how different ways of sharing a prize among the members of a group in collective rent-seeking affect individuals' incentives to contribute to their group's aggregate effort. Starting with Nitzan (1991), the literature has considered both exogenous and endogenous sharing rules, while it has assumed that the choice of such rules may occur under either public or private information. In turn, group sharing rules affect the extent of total rent dissipation, the occurrence of the group size paradox, group formation, and the choice between productive and appropriative activities.

Research Papers

Prize allocation and incentives in team contests

Joint with Benoît Crutzen and Nicolas Sahuguet: paper in PDF

Abstract: We study a contest between teams that compete for multiple indivisible prizes. Team output is a CES function of all the team members’ efforts. We use a generalized Tullock contest success function to allocate prizes between teams. We study how different intra-team prize allocation rules impact team output. We consider an egalitarian rule that gives all members the same chance of receiving a prize, and a list rule that sets ex-ante the order in which members receive a prize. The convexity of the cost of effort function and the complementarity of individual efforts determine which rule maximizes team output and success. Our results speak to many reald world situations, such as elections, contests for the allocation of local public goods and the internal organization of firms.

The Survival and Demise of the State: A Dynamic Theory of Secession

Joint with Joan Esteban, Massimo Morelli and Dominic Rohner: paper in PDF

Abstract: This paper analizes the repeated interaction between groups in a country as a repeated Stackelberg game, where conflict and secession can occur on the equilibrium path owing to commitment problems. If a group out of power is small enough and its contribution to total surplus not too large, then the group in power can always maintain peace with an acceptable offer of surplus sharing for every period. When there is a mismatch between the relative size and the relative surplus contribution of the minority group, conflict can occur. While in the static model secession can occur only as a peaceful outcome, in the infinite horizon game with high discount factor secession may result following costly conflict. We discuss our full characterization of equilibrium outcomes in the light of the available empirical evidence.

Sequential Choice of Sharing Rules in Collective Contests

Joint with Pau Balart, Oliver Gurtler and Orestis Troumpounis: paper in PDF

Abstract: Groups competing for a prize need to determine how to distribute it among their members in case of victory. We show that the timing of such groups' internal organization has important implications. When both groups actively take part in the competition, switching from simultaneous to sequential timing where the small group is the leader consists in a Pareto improvement and reduces aggregate effort expenditures. On the contrary, when the large group is the leader aggregate effort increases. These differences stem from the fact that while the sharing rules are strategic complements from the perspective of the large group, they are strategic substitutes from the perspective of the small one. Interestingly, the sequentiality of moves eliminates the group size paradox regardless of the leader's size, hence the small group never outperforms the large one even when it has the leadership advantage.

Leaders, Factions and Party Unity

Joint with Benoît Crutzen: paper in PDF

Abstract: We develop a formal model of the intra-party game between the leader and the factions of a mainstream party to study the conditions that are most conducive to the party appearing united behind its leader and electoral program. The leader can be charismatic or not. Charismatic leaders and party unity are both valued by voters. Factions are of interest or of principle. To push factions to contribute to party work and electoral efforts, the leader offers both types of factions their favorite rewards in exchange for their contributions. We show that party unity can only be achieved with charismatic leaders, and it is easier to achieve with factions of interest than with factions of principle. This is especially true if voters observe the factions’ contributions, on top of the rewards they receive. Our results are in line with several marking electoral results of the recent past.

Partial Decentralization as a Way to Prevent Secessionist Conflict

Paper in PDF

Abstract: We study secessionist conflict driven by both cultural and economic motives in a political union composed of two regions, and analyze under what conditions partial decentralization may serve as a conflict-mitigating strategy. We show that the probability of a successful secession is always increasing in cultural heterogeneity, while it is increasing in interregional income inequality if and only if the union is socially efficient to start with. As partial decentralization applies to both public expenditures and public revenues, it has efficiency and distributional effects. We show that if the cost of diversity decreases proportionally with decentralization, there always exists a range of decentralization levels such that both regions prefer decentralization to conflict. Greater interregional income inequality always widens this range but greater heterogeneity widens the range if and only if the union is socially efficient. We then prove that the actual level of decentralization that is implemented to prevent the conflict is closely related to the equilibrium probability of secession would a conflict occur. Finally, when decentralization is not a politically reversible process, it can never prevent costly secessionist conflict.

On the Timing of Separatist Conflict

Paper in PDF

Abstract: We study the endogenous timing of separatist conflict, that is, a situation in which two regions fight against each other in order to force the border configuration they prefer. Assuming that incentives for secession are driven by the traditional trade-off between economies of scale and heterogeneity of preferences, we show that the only equilibrium timing of the conflict game is a sequential one, and is such that both regions are active in the conflict (i.e. there is no deterrence in equilibrium). More specifically, the separatists take the lead in an efficient union, whereas the unionists take the lead when seceding is the socially efficient outcome. In turn, the properties of total conflict intensity are very different depending on whether the union is efficient or not. The equilibrium timing of the conflict is also the one that maximizes welfare.

Heterogeneous Social Preferences in a Model of Voting on Redistribution

Paper in PDF

Abstract: We introduce heterogeneous social preferences in a standard model of voting on a redistributive parameter in a direct democracy. In particular, and in accordance with experimental evidence, we assume that selfish, rawlsian and utilitarian voters coexist with given proportions. We characterize implicitly the unique political equilibrium of this economy, and prove its existence for any positively skewed income distribution. It turns out that the level of redistribution in the heterogeneous economy may be either lower or higher than in the selfish one. Furthermore, we show that slight variations in the relative proportion of a given type may lead to very important changes in the extent of redistribution, and we illustrate the implications this may have in the context of the political economy of border formation. Finally, we investigate the theoretical implications of the model regarding the link between inequality and redistribution, and show that it yields different predictions than the standard model with self-interested voters. In particular, an increase in poverty is very likely to increase redistribution. Furthermore, this is also true for a mean-preserving spread leaving the median income unaffected, although it has no effect whatsoever on redistribution in the traditional selfish economy.

Voting on Redistribution under Quasi-Maximin Altruism

Master Thesis: paper in PDF

Abstract: We introduce quasi-maximin political preferences (Charness and Rabin 2002) in a standard model of voting on redistribution. We show that the presence of fair voters does not necessarily imply a higher level of redistribution than in the case of purely self-interested voters. Furthermore, we show that more inequality might lead to less redistribution in equilibrium. We examine the implications of assuming a mixture of fair and selfish voters in a three-voter economy and identify the cases for which the identity of the median voter might be altered. We show that in all those cases, the redistributive outcome ends up being controlled by a fair voter. Finally, we compare our results with the ones obtained assuming instead self-centered inequality aversion à la Fehr and Schmidt (1999).