Pathology or Revelation? The Public Good Index

Manfred J. Holler () and Hannu Nurmi
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Manfred J. Holler: University of Hamburg
Hannu Nurmi: University of Turku

A chapter in Voting Power and Procedures, 2014, pp 247-257 from Springer

Abstract: Abstract This paper sets out from a discussion of the well-known fact that the PGI violates the axiom of local monotonicity (LM). It argues that cases of nonmonotonicity indicate properties of the underlying decision situations which cannot be brought to light by the more popular power measures, i.e., the Banzhaf index and the Shapley–Shubik index, that satisfy LM. The discussion proposes that we can constrain the set of games such that LM also holds for the PGI. A discussion of causality follows. It suggests that the nonmonotonicity can be the result of framing the decision problem in a particular way and perhaps even ask the “wrong question.” Correspondingly, the PGI can be interpreted as an indicator. The probabilistic relationship of Banzhaf index and PGI identifies the factor which is responsible for the formal difference between the two measures and therefore for the violation of LM that characterizes the PGI, but not the Banzhaf.

Keywords: Public Good Index (PGI); Normalized Banzhaf Index; Shapley-Shubik Index; Local Monotonicity (LM); Underlying Decision Situation (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:spr:stcchp:978-3-319-05158-1_14

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DOI: 10.1007/978-3-319-05158-1_14

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