the performance of pivotal voter models in small scale elections evidence from texas liquor referenda abstract this paper explores the ability of pivotal voter models to explain voter behavior in small scale elections using data from texas liquor referenda the findings provide little support for the view that pivotal voter models are a reasonable theory for understanding small scale elections interestingly this is not because they cannot explain the levels of turnout in the data but rather because they cannot explain the size of the winning margins the logic of pivotal voter models implies that elections must be expected to be close even if there is a significant difference between the sizes of the groups or the intensity of their preferences with even a relatively small number of eligible voters elections that are expected to be close ex ante must end up being close ex post however in the data winning margins are often significant

a bayesian model of voting in juries abstract we model voting in juries as a game of incomplete information allowing jurors to receive a continuum of signals we characterize the unique symmetric equilibrium of the game and give a condition under which no asymmetric equilibria exist under unanimity rule we offer a condition under which unanimity rule exhibits a bias toward convicting the innocent regardless of the size of the jury and give an example showing that this bias can be reversed we prove a jury theorem for our general model as the size of the jury increases the probability of a mistaken judgment goes to zero for every voting rule except unanimity rule for unanimity rule the probability of making a mistake is bounded strictly above zero if and only if there do not exist arbitrarily strong signals of innocence our results explain the asymptotic inefficiency of unanimity rule in finite models and establishes the possibility of asymptotic efficiency a property that could emerge only in a continuous model journal of economic literature classification numbers c72 d72

to elect or to appoint bias information and responsiveness of bureaucrats and politicians in this paper we address empirically the trade offs involved in choosing between bureaucrats and politicians in order to do this we map institutions of selection and retention of public officials to the type of public officials they induce we do this by specifying a collective decision making model and exploiting its equilibrium information to obtain estimates of the unobservable types we focus on criminal decisions across us states supreme courts we find that justices that are shielded from voters influence bureaucrats on average i have better information ii are more likely to change their preconceived opinions about a case and iii are more effective make less mistakes than their elected counterparts politicians we evaluate how performance would change if the courts replaced majority rule with unanimity rule

do voters vote ideologically abstract in this paper we address the following question to what extent is the hypothesis that voters vote ideologically i e they always vote for the candidate who is ideologically closest to them testable or falsifiable we show that using data only on how individuals vote in a single election the hypothesis that voters vote ideologically is irrefutable regardless of the number of candidates competing in the election on the other hand using data on how the same individuals vote in multiple elections the hypothesis that voters vote ideologically is potentially falsifiable and we provide general conditions under which the hypothesis can be tested

media bias and influence evidence from newspaper endorsements this paper investigates the relationship between media bias and the inuence of the media on voting in the context of newspaper endorsements werst develop a simple econometric model in which voters choose candidates under uncertainty and rely on endorsements from better informed sources newspapers are potentially biased in favor of one of the candidates and voters thus rationally ac count for the credibility of any endorsements our primary empiricalnding is that endorsements are inuential in the sense that voters are more likely to support the recommended candidate after publication of the endorsement the degree of this inuence however depends upon the credibility of the endorsement in this way endorsements for the democratic candidate from left leaning news papers are less inuential than are endorsements from neutral or right leaning or newspapers and likewise for endorsements for the republican thesendings suggest that voters do rely on the media for information during campaigns but that the extent of this reliance depends upon the degree and direction of any bias

first impressions matter signalling as a source of policy dynamics we provide the first direct empirical support for the importance of signalling in monetary policy by testing two key predictions from a novel structural model first all policymaker types should become less tough on inflation over time and secondly types that weigh output more should have a more pronounced shift voting data from the bank of england s monetary policy committee strongly support both predictions counterfactual results indicate signalling has a substantial impact on interest rates over the business cycle and improves the committee designer s welfare implications for committee design include allowing regular member turnover and transparency regarding publishing individual votes

the degree of capital mobility and the stability of an open economy under rational expectations recent stochastic models of the open economy have tended to downplay the role of the trade account in short run exchange rate demination focusing instead on the stock equilibrating function of exchange rates and interest rates l the reason for this is that such models are specified in terms of discrete time and virtually all assume i perfect capital mobility in the sense that domestic and foreign assets are perfect substitutes on an uncovered basis ii no wealth effects in the relevant demand functions under these assumptions the exchange rate is essentially determined within the money market however as soon as either assumption is dropped the current account balance together with the appropriate asset market s assumes an important role in determining the exchange rate and domestic interest rate along with the accumulation of foreign securities by the domestic economy during the period 2

identifying structural models of committee decisions with heterogeneous tastes and ideological bias in practice members of a committee often make different recommendations despite a common goal and shared sources of information we study the nonparametric identification and estimation of a structural model where such discrepancies are rationalized by the members unobserved types which consist of ideological bias while weighing different sources of information and tastes for multiple objectives announced in the policy target we consider models with and without strategic incentives for members to make recommendations that conform to the final committee decision we show that pure strategy bayesian nash equilibria exist in both cases and that the variation in common information recorded in the data helps us to recover the distribution of private types from the members choices building on the identification result we estimate a structural model of interest rate decisions by the monetary policy committee mpc at the bank of england we find some evidence that the external committee members are les

information aggregation rationality and the condorcet jury theorem the condorcet jury theorem states that majorities are more likely than any single individual to select the better of two alternatives when there exists uncertainty about which of the two alternatives is in fact preferred most extant proofs of this theorem implicitly make the behavioral assumption that individuals vote sincerely in the collective decision making a seemingly innocuous assumption given that individuals are taken to possess a common preference for selecting the better alternative however in the model analyzed here we find that sincere behavior by all individuals is not rational even when individuals have such a common preference in particular sincere voting does not constitute a nash equilibrium a satisfactory rational choice foundation for the claim that majorities invariably do better than individuals therefore has yet to be derived

voting behavior and information aggregation in elections with private information we analyze two candidate elections in which voters are uncertain about the realization of a state variable that affects the utility of all voters each voter has noisy private information about the state variable we show that the fraction of voters whose vote depends on their private information goes to zero as the size of the electorate goes to infinity nevertheless elections fully aggregate information in the sense that the chosen candidate would not change if all private information were common knowledge equilibrium voting behavior is to a large extent determined by the electoral rule i e if a candidate is required to get at least x percent of the vote in order to win the election then in equilibrium this candidate gets very close to x percent of the vote with probability close to one finally if the distribution from which preferences are drawn is uncertain then elections will generally not satisfy full information equivalence and the fraction of voters who take informative action does not converge to zero

in defense of unanimous jury verdicts mistrials communication and strategic voting the requirement of unanimous jury verdicts in criminal trials is widely believed to reduce the likelihood of convicting the innocent this belief depends largely upon the assumption that jurors will vote nonstrategically based on their impression of the trial evidence recent literature however has questioned this assumption and feddersen and pesendorfer propose a model in which it is never a nash equilibrium for jurors to vote nonstrategically under unanimity rule and equilibrium behavior produces higher probabilities of both convicting the innocent and acquitting the guilty under unanimity rule than under numerous alternatives i extend this work by incorporating two additional features of actual jury procedure the possibility of mistrial and communication among jurors under each circumstance i demonstrate that nonstrategic voting is a nash equilibrium under fairly general conditions and that unanimity performs better than any alternative rule in minimizing probability of trial error and maximizing expected utility

the statistical analysis of roll call data modern studies of legislative behavior focus upon the relationship among the policy preferences of legislators institutional arrangements and legislative outcomes in spatial models of legislatures policies are represented geometrically as points in a low dimensional euclidean space each legislator has a most preferred policy or ideal point in this space and his or her utility for a policy declines with the distance of the policy from his or her ideal point see davis hinich and ordeshook 1970 for an early survey the primary use of roll call data the recorded votes of deliberative bodies 1 is the estimation of ideal points the appeal and importance of ideal point estimation arises in two ways first ideal point estimates let us describe legislators and legislatures the distribution of ideal points estimates reveals how cleavages between legislators reflect partisan affiliation or region or become more polarized over time e g mccarty poole and rosenthal 2001 roll call data serve similar purposes for interest groups such as americans for democratic action the national taxpayers union and the sierra club to produce ratings of legislators along different policy dimensions second estimates from roll call analysis can be used to test theories of legislative behavior for instance roll call analysis has been used in studies of the u s congress both contemporary and

materials price increases and aggregate adjustment in an open economy a stochastic approach abstract this paper develops a stochastic macroequilibrium frameworks to analyze the differing implications of alternative types of input price disturbances the distinctions between expected and unexpected permanent and transitory nominal and real disturbances are considered the introduction of input disturbances involves a more elaborate modelling of the supply side of the economy both constant returns to scale and decreasing returns to scale technologies are considered the analysis highlights the sensitivity of the macroeconomic impacts of input price shocks to their specific type the analytical results obtained are not unambiguous and are supplemented with numerical simulations

an inventory system with demand dependent on both time and price assuming backlogged shortages abstract in this work we analyze an inventory model for items whose demand is a bivariate function of price and time it is supposed that the demand rate multiplicatively combines the effects of a time power function and a price logit function the aim is to maximize the profit per time unit assuming that the inventory cost per time unit is the sum of the holding shortage ordering and purchasing costs an algorithm is developed to find the optimal price the optimal lot size and the optimal replenishment cycle several numerical examples are introduced to illustrate the solution procedure

deliberation preference uncertainty and voting rules a deliberative committee is a group of at least two individuals who first debate about what alternative to choose prior to these same individuals voting to determine the choice we argue first that uncertainty about individuals private preferences is necessary for full information sharing and second demonstrate in a very general setting that the condition under which unanimity can support full information revelation in debate amounts to it being common knowledge that all committee members invariably share identical preferences over the alternatives it follows that if ever there exists an equilibrium with fully revealing debate under unanimity rule there exists an equilibrium with fully revealing debate under any voting rule moreover the converse is not true of majority rule if there is uncertainty about individuals preferences

estimating dynamic games of electoral competition to evaluate term limits in us gubernatorial elections this paper shows how to identify and estimate using standard semi parametric techniques a class of dynamic games with perfect monitoring that have been at the frontier of recent research in political economy the empirical analysis provides novel quantitative insights into the trade off that voters face between ideology and ability the differences in ability and ideology among parties and states and the differences in preferences between political candidates and voters we analyze the consequences of term limits and quantify their relative importance specifically we characterize conditions under which term limits improve voters welfare

a group rule utilitarian approach to voter turnout theory and evidence this paper explores a group rule utilitarian approach to understanding voter turnout inspired by the theoretical work of john c harsanyi 1980 and timothy j feddersen and alvaro sandroni 2002 it develops a model based on this approach and studies its performance in explaining turnout in texas liquor referenda the results are encouraging the comparative static predictions of the model are broadly consistent with the data and a structurally estimated version of the model yields reasonable coefficient estimates and fits the data well the structurally estimated model also outperforms a simple expressive voting model

world trade patterns economic disturbances and exchange rate management abstract this paper construct and analyzes a three country stochastic model of world trade the objectives of this paper are to investigate the propagation of economic disturbances worldwide and to analyze the nature of optimal exchange rate management on the part of a single country faced with monetary and real disturbances accurring in all its trade patterns the paper analyzes the roles of bilateral trade patterns the type of underlying stochastic disturbances i e monetary vs real and transsitory vs permanent and of the optimality criterion in determining the optimal exchange rate regime

the value of information in the court get it right keep it tight one should always subordinate his own personal views whether they be economic social political or whatever they may be because when you are talking about your own views you are only one of millions of individuals in the country when you are interpreting the law perhaps you have a special skill and special training that does give you the right to pass on these questions i have to confess that in this open area sometimes inevitably a man is the product of his own background and he may be somewhat influenced but i will do my very best to subordinate those considerations because i think that is the duty of any judge justice john stevens in his senate confirmation hearing

testing explanations of strategic voting in legislatures a reexamination of the compromise of 1790 a difficult yet prevalent problem in legislative politics is how to assess explanations when observable actions may not represent true and unobserved legislator preferences we present a method for analyzing the validity of theoretical historical accounts that unifies theory history and measurement we argue that approaches to testing accounts of legislative behavior which are theoretically and historically agnostic are not always best and present an approach which 1 forms an explicit explanation of behavior here a simple dynamic voting game that yields estimable parameter constraints and 2 tests these constraints using a customized empirical model that is as consistent as possible with the explanation we demonstrate the method using legislative voting data from the first congress 1789 1791 using the idea of sophisticated equivalents from voting theory we subject the traditional account of the compromise of 1790 to a statistical test and find that there is reason to doubt the claim that legislators of the time believed the specified log roll was taking place the results suggest that the capital location and assumption issues were resolved independently

conflicts and common interests in committees committees improve decisions by pooling members independent information but promote manipulation obfuscation and exaggeration of private information when members have conflicting preferences committee decision procedures transform continuous data into ordered ranks through voting this coarsens the transmission of information but controls strategic manipulations and allows some degree of information sharing each member becomes more cautious in casting the crucial vote than when he alone makes the decision based on own information increased quality of one member s information results in his casting the crucial vote more often committees make better decisions for members than does delegation

the flexible exchange basket a macroeconomic analysis abstract this paper constructs and analyzes a multi country stochastic equilibrium framework suitable for analyzing the behavior of an economy which pursues a flexible exchange basket policy the framework is general enough to accommodate the special cases of a multilateral floating exchange rates and b rigid basket regimes an important issue that is addressed in the present framework involves the composition of the optimal flexible basket versus that of the corresponding rigid basket such an investigation is carried out for various patterns of multilateral trade for various types of structural disturbances and for alternative optimality criteria

monetary policy and foreign price disturbances under flexible exchange rates a stochastic approach the analysis of monetary policy under flexible exchange rates has received extensive treatment during recent years particular attention has been devoted to the role of exchange rate expectations with a general conclusion being that many of the propositions of the traditional static flemingmundell model see fleming 8 and mundell 19 require substantial modification once such expectations are taken into account see 5 21 24 with few exceptions the analysis has been carried out in a deterministic framework the usual assumption made is that any monetary expansion that is introduced is initially ex ante unanticipated but having taken place it is then ex post expected to be permanent this assumption underlies for example the recent contribution by dornbusch 5 and much of the subsequent work that stems from it l this assumption while very natural is also a polar one in practice agents in the economy may attempt to anticipate monetary policy and the policies themselves

preferences or private assessments on a monetary policy committee using bank of england voting data we show empirically that members votes are driven by heterogeneous individual assessments of the economy as well as their individual policy preferences estimates indicate that internal committee members form more precise assessments than externals and are also more hawkish the estimates allow the first quantification of the gain due to information aggregation on monetary policy committees the marginal gain from additional committee members tapers quickly after five members there is no evidence of gains through externals moderating internals preferences a relatively small committee of highly informed internal members emerges as a desirable committee structure

market structure and multiple equilibria in airline markets we provide a practical method to estimate the payoff functions of players in complete information static discrete games with respect to the empirical literature on entry games originated by bresnahan and reiss 1990 and berry 1992 the main novelty of our framework is to allow for general forms of heterogeneity across players without making equilibrium selection assumptions we allow the effects that the entry of each individual airline has on the profits of its competitors its competitive effects to differ across airlines the identified features of the model are sets of parameters partial identification such that the choice probabilities predicted by the econometric model are consistent with the empirical choice probabilities estimated from the data we apply this methodology to investigate the empirical importance of firm heterogeneity as a determinant of market structure in the u s airline industry we find evidence of heterogeneity across airlines in their profit functions the competitive effects of large airlines american delta united are different from those of low cost carriers and southwest also the competitive effect of an airline is increasing in its airport presence which is an important measure of observable heterogeneity in the airline industry then we develop a policy experiment to estimate the effect of repealing the wright amendment on competition in markets out of the dallas airports we find that repealing thewright amendment would increase the number of markets served out of dallas love

can politicians police themselves natural experimental evidence from brazil s audit courts to enhance government accountability reformers have advocated strengthening institutions of horizontal accountability particularly auditing institutions that can punish lawbreaking elected offi

the role of information acquisition and financial markets in international macroeconomic adjustment abstract international macroeconomic adjustment to money supply aggregate expenditure and relative demand disturbances is analyzed within a framework which emphasizes the role of information agents are unable to directly observe disturbances and may become fully informed about disturbances only by purchasing information we analyze how relative price and exchange rate adjustment depends on the variances of the underlying disturbances while taking into account the incentive to acquire information we also discuss the conditions which are necessary to preclude a free rider problem whereby uninformed agents are able to extract from observation of financial market conditions the exact information of the information buyers

experiments with the optimal currency composite this paper addresses the issue of the determination of an optimal currency composite in the context of a world characterized by generalized exchange rate flexibility the approach adopted here is macroeconomic in nature and stresses general equilibrium considerations the emphasis upon both monetary and real considerations capital mobility and rational expectations in the context of a multi country framework is what sets this paper apart from previous attempts to address this issue empirically the problem of choosing an optimal currency composite has if anything gained importance according to the annual report on exchange arrangements issued by the international monetary fund as many as 37 countries were reported to be practicing currency basket arrangements during 1980 81 while a year later i e 1981 82 the number of such countries had increased to 53 see annual report june 3 1983 as indicated in the annual report this increase can be attributed to the movement away from single currency dollar pegs in favor of increased use of currency composites including the sdr pg 9 the advantage of a composite peg over a single currency peg is clear a composite peg embodies automatic and systematic adjustment of bilateral exchange rates whenever necessary which may be preferable to an absolute peg against all currencies or to joint floating as implied by a single currency peg the latter arrangement may subject the economy in question to an undesirable degree of exchange rate volatility while the former carries with it heavy intervention costs thus the composite currency peg has proved to be an acceptable middle ground for economies as different as sweden and india in practice the shares assigned to various currencies comprising the basket where such arrangements have been maintained have usually been determined on the basis of the currency composition of the economy s international trade the appendix provides some institutional details regarding the weighting practices of the 53 currency composite countries over the period 1981 82 as indicated here 32 countries peg their currencies to a basket whose currency shares are determined in accordance with bilateral trade patterns of the economy in question an additional 21 countries peg their currencies to the sdr which is itself a 5 currency basket with the weights being set by the imf by reference to the currency denomination of world trade theoretical analysis of the composition of the optimal basket owes much to flanders and helpman 8 9 whose work is extended by

identification and estimation of preference distributions when voters are ideological this article studies the non parametric identification and estimation of voters preferences when voters are ideological we establish that voter preference distributions and other parameters of interest can be identified from aggregate electoral data we also show that these objects can be consistently estimated and illustrate our analysis by performing an actual estimation using data from the 1999 european parliament elections

informational efficiency and the open economy a troublesome feature of existing stochastic macroequilibrium models of the open economy is the nature of the informational assumptions usually made most of these models assume that full contemporaneous information on all relevant macrovariables is freely available to economic agents this is the assumption made for example in cox 7 driskill and mccafferty 10 driskill 8 and turnovsky 17 18 among others further when information gaps are introduced the lack of full current information refers to the inability of domestic agents to correctly identify permanent versus transitory components of movements in either the currently observed domestic money supply as in ueda 20 or the observable foreign price level 2 16 5 yet prevailing economic reality is characterized by the availability of differentiated current information to economic agents information or data on variables relevant to auction markets such as asset markets is far more easily and frequently available than information that relates to markets that are contractual in nature such as commodity markets a financial newspaper such as the wall street journal for example provides daily information on half a dozen foreign prime interest rates a multitude of u s