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Meehan Sam Kasuli Marcel Landesmann Prof. Steven Morrison ECONPress of Northeastern University Spring 2012 Volume II, Number II Letter from the Editors...................................................... 5 Voting with Bidirectional Elimination .........................6 Matthew Stephen Cook An Econometric Inquiry into the Effect of Religious Profiles on National Wealth ........................23 Edited and published at Northeastern University Brian Joel Feldman Editorial Offices: Equity Volatility across Industries from IPO Day .......35 ECONPress Andrew Nielsen Lewis 360 Huntington Avenue 301 Lake Hall Should Punitive Damages be Scaled to Wealth? ..........51 Boston, MA 02115-5000 Harrison A Seitz ISSN: International Collective Action on Climate Change ...58 2158-8864 (Print) Evan Richards Sankey 2158-8872 (Online) Submissions Process and Guidelines ...........................66 Electronic Mail: [email protected] Web Site: www.ECONPress.org R -4- ECONPress Letter from the Editors -5- Letter from the Editors The greatest insights into our world are often not revolutionary, but evolutionary. Progress is not made in leaps and bounds but by small, determined steps. The authors that we present you in this edition of ECONPress have all taken well-founded topics, ap- proached them with new questions and set into motion a process of researching answers that have not been given before. We at ECONPress have not developed the research within, but instead provide an outlet for such work to be distributed and recognized. Non-published research is akin to a tree fall not heard. We seek to make the work heard. Submitting to ECONPress is perhaps the easiest part of the entire research process and the labor of “rethinking our world” the most difficult. Yet all of the authors who submit- ted to ECONPress should be commended in their confidence and determination because as undergraduates we have not traditionally had such a way to share our work before. Each submission requires a modest confidence that one’s work is quality research - quality that each one of us undergraduates possess. The authors and research here are distinguished for hard work, unique insights, economic understanding, and adept prose - qualities that all other undergraduates like you possess and that are waiting to be shared. Let the research presented within inspire and instigate a debate in your own mind. Put that question to the test and build upon the work of those that have come before us. R “Rethink your world” and share it with all of us. Such is a process to continue throughout your lifetime, and we at ECONPress hope to be but a small part. Thank you for reading, Alec Loudenback Victor Martinelli Robert Dent Pooja Trivedi Michael Onore Tala Borno The Editorial Board of ECONPress -6- ECONPress Voting with Bidirectional Elimination -7- of Bidirectional Elimination was born. Jon “This scheme, [known as] instant-runoff mechanism. The purpose of this paper is Voting with Bidirectional also independently created his own proof of voting, doesn’t necessarily get you the to define important criteria, explain their Elimination Condorcet efficiency for the [3 candidates, M movie (or the candidate) with the most importance, and evaluate a new voting voters] case. Tyler Mullen showed me the first committed supporters, but it does get mechanism using these criteria. The mech- Matthew Stephen Cook set of conditions under which my algorithm you a winner that a majority can at anism I will analyze is called Bidirectional would not elect the Condorcet winner. This least countenance. It favors consensus. Elimination and is conducted in a manner Stanford University led me to design the specifications for the pro- Now here’s why it may also favor The similar to IRV. The criteria I will use are the gram Jaehyun coded. Thanks to the four of you Hurt Locker. A lot of people like Avatar, Condorcet criterion and strategy proofness. R for your support of this stimulating project. obviously, but a lot don’t—too cold, too I will primarily analyze the mechanism Abstract formulaic, too computerized, too de- based on the Condorcet criterion, using rivative. Avatar is polarizing. So is mathematical proofs and experimental data Two important criteria for judging the James Cameron. He may have fattened from computer simulations. I will discuss quality of a voting algorithm are strategy- 1. Introduction the bank accounts of a sizable bloc of strategy proofness briefly, and recommend proofness and Condorcet efficiency. While, Academy members—some three thou- an experimental methodology one could according to the Gibbard-Satterthwaite For decades, the Academy of Motion sand people drew Avatar paychecks— use for a rigorous analysis. theorem, we can expect no voting mecha- Picture Arts and Sciences used a plurality but that doesn’t mean that they all long nism to be fully strategy proof, many Con- vote to determine Best Picture: Over five to recrown him king of the world. The paper is organized as follows. Sec- dorcet methods are highly susceptible to thousand voters would submit a single vote These factors could push Avatar toward tion 2 reviews criteria, background, ter- compromising, burying, and bullet voting. among just a few nominees, and the movie the bottom of many a ranked-choice bal- minology, and theorems related to social In this paper I propose a new algorithm with the most votes would win. In 2010, lot. choice theory that are necessary for analyz- which I call “Bidirectional Elimination,” a the Academy replaced plurality voting with ing a voting mechanism. Section 3 dissects composite of Instant Runoff Voting and the a new system called Instant Runoff Voting On the other hand, few people who have Instant Runoff Voting, the Coombs Meth- Coombs Method, which offers the benefit (IRV). Instead of submitting a single choice, seen The Hurt Locker—a real Iraq War od, and Condorcet Methods. Section 4 of greater resistance to tactical voting while voters were asked to submit a preferential story, not a sci-fi allegory—actively dis- introduces Bidirectional Elimination, runs nearly always electing the Condorcet win- ranking of ten nominees. After all ballots like it, and many profoundly admire it. the algorithm step by step on a given set of ner when one exists. A sophisticated pro- were cast, the mechanism would systemati- Its underlying ethos is that war is hell, preferences, and analyzes based on certain gram was tailor-made and used to test IRV, cally eliminate candidates with the fewest but it does not demonize the soldiers it criteria presented in section 2. Section 5 the Coombs Method, and Bidirectional first-place votes until one winner remained. portrays, whose job is to defuse bombs, offers logic proofs related to Condorcet ef- Elimination on tens of billions of social not drop them. Even Republicans (and ficiency. Section 6 presents and analyzes ex- preference profiles in combinations of up to IRV offered several advantages over a there are a few in Hollywood) think it’s perimental results from a computer simula- ten voters and ten candidates. I offer math- simple plurality vote. The plurality mecha- good. It will likely be the second or third tion. Section 7 offers concluding remarks. ematical proofs showing the new algorithm nism could have easily elected candidates preference of voters whose first choice is meets the Condorcet criterion for up to 4 many voters strongly disliked, and it also one of the other ‘small’ films that have Results from the computer simulation voters and N candidates, or M voters and allowed for the spoiler effect—the negative been nominated.” show that Bidirectional Elimination comes up to 3 candidates; beyond this, program effect a weaker candidate has over a stron- very close to meeting Condorcet efficiency. results show Bidirectional Elimination of- ger candidate by stealing away votes. To As a process, voting requires design. Given the susceptibility of most Condorcet fers a significant advantage over both IRV compensate for the spoiler effect, voters in According to Allan Gibbard and Mark Sat- methods to tactical voting, and given that and Coombs in approaching Condorcet ef- the plurality elections were able to strate- terthwaite, no voting mechanism is fully failure to elect the Condorcet winner oc- ficiency. gize by failing to report actual first choices; strategy proof, and according to Kenneth curs less than .6% of the time for up to 10 voters could compromise by voting for the Arrow, no voting mechanism meets all rea- voters and 10 candidates using Bidirection- Acknowledgments candidate they thought realistically had the sonable criteria of fairness. A theoretical al Elimination, I find this new algorithm best chance of winning. IRV eliminated framework must be constructed to evaluate may offer a significant advantage over I am grateful to Jonathan Levin for his the spoiler effect and reduced the chance methods of aggregating individual interests Condorcet methods, and certainly a strict instructive insights, engaging discussions, and of electing candidates whom a majority into a collective decision. This theoretical advantage over Instant Runoff Voting and thoughtful guidance. A special thanks to Jae- disliked. framework, dating back to the work of over the similar Coombs Method.