political competition and voter mobility the existing model of political competition is extended to allow voters to live in different regions and to migrate between regions in response to an inter regional transfer policy we then show that regions have a different weight in the expected vote function of political parties this gives parties an incentive to bias the transfer policy in favour of relatively high weight regions with potentially adverse efficiency and equity effects however we then show that parties always propose efficient and equitable regional transfers regardless of whether regions have different weights if there is some mobility of citizens across regions mobility constrains parties to act efficiently and equitably even though they face an incentive to act otherwise however when voters are immobile political competition leads to inequitable though efficient outcomes

political support and tax reforms with an application to italy in 2001 the italian government introduced a personal income tax reform to be implemented in successive phases in 2004 taxes were reduced to all income levels with higher gains for low income and high income individuals than for middle income ones a large debate arised this paper explores the political economy reasons under this tax reform mainly the attempt of the government to attract the uncertain voters swing voters a probabilistic voting model is introduced to capture the importance of swing voters the model predicts that the average personal income tax rate tends to be lower for groups of lower income higher preference for leisure and containing more politically mobile voters swing voters however data from italian polls show that while the tax reform was a good strategy to attract swing voters the specific design of the reform which favored high income and low income individuals but not the middle class was not the more appropriate strategy

the less volatile u s economy a bayesian investigation of timing breadth and potential explanations using a bayesian model comparison strategy we search for a volatility reduction in u s real gross domestic product gdp growth within the postwar sample we find that aggregate real gdp growth has been less volatile since the early 1980s and that this volatility reduction is concentrated in the cyclical component of real gdp sales and production growth in many of the components of real gdp display similar reductions in volatility suggesting the aggregate volatility reduction does not have a narrow source we also document structural breaks in inflation dynamics that occurred over a similar time frame as the gdp volatility reduction

electoral outcomes with probabilistic voting and nash social welfare maxima abstract this paper provides unexpected support to nash s view of how bargaining determines the social choice we first present a spatial model of electoral competition with probabilistic voting and a very close relation between voters preferences and their choice probabilities the outcome of the electoral competition game is then shown to be precisely the social alternative that maximizes a nash type social welfare function theorem 1 this electoral outcome is also interpreted as a unanimity likelihood maximum corollary 1 within our framework existence and uniqueness of such an outcome are guaranteed corollaries 2 and 3

econometric evaluation of consumers expenditure equations large errors in forecasting consumption in the late 1980s and early 1990s were a major contribution to the poor performance in economic forecasting overall these errors have been attributed to the inability of existing models to capture important influences on consumer behavior such as the effects of financial deregulation and shifts in expectations revisions to models followed their failure to predict the late 1980s boom an important question is whether these developments help to explain the unanticipated downturn in consumers expenditure in the early 1990s this article presents an appraisal of eight recent u k consumption functions it is found that these models can explain much of the rise in consumption in the late 1980s however forecast errors for the early 1990s while within the historical range are predominantly negative the nature of this overprediction suggests that further research on household finances including the role of housing as collateral is required copyright 1994 by oxford university press

inventory stability and resource allocation under uncertainty in a command economy this paper focuses on a theoretical issue involved in modeling the functioning of a centrally planned economy results derived in a model of inventory behavior indicate that the uncertain consequences of economic decisions and their cumulative impact on the functioning of the economy need to be explicitly recognized in order to study plan implementation when this is done the need for institutions or procedures with homeostatic properties i e negative feedback mechanisms is revealed without such mechanisms orders consistent with a feasible plan may be unable to insure implementation of that plan even when all economic agents are perfectly motivated three types of feedback mechanisms resolving this difficulty are formulated and discussed with respect to inventory behavior in a centrally planned economy

friedman s plucking model of business fluctuations tests and estimates of permanent and transitory components in milton friedman s model output cannot exceed a ceiling level but occasionally is plucked downward by recession implying fluctuations are asymmetric recessions transitory and recessions duration dependent though expansions are not the empirical literature lends support but formal modeling has been absent the econometric model presented here encompasses both plucking and symmetric fluctuations around a stochastic trend we find gdp is well characterized by the plucking model implied recessions correspond to nber reference cycles and no role for symmetric cycles decomposition of the unemployment rate reveals a corresponding asymmetry and timing paths of ceiling output and trend unemployment are presented

a floor and ceiling model of us output abstract building on previous nonlinear time series models we further examine the form of nonlinearity in us output we develop a model of us output that allows for floor and ceiling effects to alter the dynamics of output growth the model estimated on post korean war quarterly data displays features similar to nonlinear trade cycle models of the 1940s and 1950s thus as predicted by many of the earlier theoretical models our empirical results suggest that the turning points of the business cycle provide new initial conditions for the ensuing growth process we also find important asymmetries in the responses of output to positive and negative shocks this history and shock dependence property is not present in linear or approximately linear models of the type that arise in the standard implementations of real business cycle theory

personal bankruptcy and credit market competition we document a link between u s credit supply and rising personal bankruptcy rates we exploit the exogenous variation in market contestability brought on by banking deregulation the relaxation of entry restrictions in the 1980s and 1990s at the state level we find deregulation explains at least 10 of the rise in bankruptcy rates we also find that deregulation leads to increased lending lower loss rates on loans and higher lending productivity our findings indicate that increased competition prompted banks to adopt sophisticated credit rating technology allowing for new credit extension to existing and previously excluded households the last quarter century saw a dramatic increase in the share of u s con sumers filing for personal bankruptcy thereby seeking a discharge of their unsecured debt in 2005 this increase led to the most comprehensive change to u s bankruptcy law since 1978 while several causes for the rise in bankruptcies have been advanced and it is the subject of ongoing research two potentially significant changes occurred during this period banking deregulation the relaxation of bank entry restrictions in the 1980s and 1990s and technological change in consumer lending banking deregulation by removing barriers to entry increases credit market competition and there fore affects the supply of credit new screening technologies change the way loans are made allowing for interest rates to better reflect underlying risk and thus facilitating lending to riskier borrowers in this paper we examine whether banking deregulation and technological change played a role in the increase in consumer bankruptcy the empirical literature has mostly focused on cross sectional differences in personal bankruptcy in particular it has revolved around legal institutions as a way to answer whether consumers file due to adverse events as part of a rational financial calculation or as a consequence of unfair or deceptive lending practices usually researchers have exploited the different asset exemptions across u s states i e the amount of personal assets protected from creditors

probabilistic voting and equilibrium an impossibility result the introduction of voters uncertainty alone is in no way sufficient to guarantee an equilibrium outcome of a voting process what is needed in addition is the assumption that the voting probabilities depend strictly convex respectively concave of the utility losses caused by the proposed policies of the different parties this assumption is however not compatible with an unrestricted policy space and it has to be rejected for theoretical as well as empirical reasons thus using models of probabilistic voting we still have to accept that cycles can arise and electoral outcomes are prone to manipulation via agenda setting

the political economy of naturalization this paper presents a political economy model in which self interested natives decide when citizenship and or voting rights should be granted to foreign born workers native voters know that immigrants hold different political preferences and would thus tend to postpone their enfranchisement as much as possible they also consider however that a more restrictive naturalization policy may reduce the gains from immigration we find that the optimal timing of naturalization depends on the quantity quality productivity and preferences of potential immigrants the political composition and the age structure of the native population as well as the sensitivity of migration choices to the citizenship issue

political deadlocks and distributional information the value of the veil contractarian normative theory relies on the veil of ignorance construct to generate the political consensus required for its theories of justice by eliminating distributional information the veil is presumed to facilite consensus building by reducing conflict over the distributional effects of proposed constitutional rules or institutions this paper explores the extent to which excessive distributional information might also impede the ordinary day to day decision making of democratic institutions our analysis suggests that distributive information makes political deadlocks under majority rule more likely statistical evidence suggests that the efficacy of the u s congress has been reduced by the dramatic increase in distributional information made available to it over the past twenty five years

the size and scope of government comparative politics with rational politicians we try to demonstrate how economists may engage in research on comparative politics relating the size and composition of government spending to the political system a downsian model of electoral competition and forward looking voting indicates that majoritarian as opposed to proportional elections increase competition between parties by focusing it into some key marginal districts this leads to less public goods less rents for politicians more redistribution and larger government a model of legislative bargaining and backward looking voting indicates that presidential as opposed to parliamentary regimes increase competition between both politicians and voters this leads to less public goods less rents for politicians less redistribution and smaller government we confront these predictions with cross country data from around 1990 controlling for economic and social determinants of government spending we nd strong and robust support for the prediction that the size of government is smaller under presidential regimes and weaker support for the prediction that majoritarian elections are associated with less public goods

balanced budget redistribution as the outcome of political competition this paper models balanced budget redistribution between socio economic groups as the outcome of electoral competition between two political parties equilibrium is unique in the present model and a sufficient condition for existence is given requiring that there be enough stochastic heterogeneity with respect to party preferences in the electorate the validity of hotelling s principle of minimum differentiation and of director s law are examined under alternative hypotheses concerning administrative costs of redistributions and voter s possibilities both of abstaining from voting and of becoming campaign activists for one of the parties the policy strategy of expected plurality maximization is contrasted with the strategy of maximizing the probability of gaining a plurality incomes are fixed and known so lump sum taxation is feasible however constraints on tax transfer differentiation between individuals are permitted in the analysis

majority rule and election models abstract this paper surveys the theoretical work that has been done on majority rule and economic models of elections section i provides an overview of the topic section 2 reviews the most important results that have been obtained about majority rule as an abstract collective choice rule section 3 identifies some alternative inferences that can be made from those results section 4 covers some models that include additional features that are present in political institutions where majority rule is used section 5 concentrates on some alternative election models and equilibrium concepts section 6 focuses on election models with abstentions and or candidate uncertainty about voter behaviour section 7 compares and contrasts models where candidates are certain about what the voters choices will be contingent upon about the choices made by the candidates and models where they are uncertain about those choices section 8 closes the survey by identifying some emerging areas of research

company sector money demand new evidence on the existence of a stable long run relationship for the united kingdom the u k departure from the european exchange rate mechanism has created an urgent need for new indicators of monetary policy stance traditional simple sum monetary aggregates have proven unreliable particularly in the face of the financial innovations of the 1980s micro theory suggests that inappropriate aggregation over heterogeneous assets and holders may be to blame the present paper tests for weak separability of asset groupings for the u k company sector divisia weighted aggregates are constructed for the resulting narrow and broad groupings it is shown that stable long run relationships corresponding to money demand equations exist for these aggregates arbitrary dummies representing financial innovation are not required in contrast to some other work in this area copyright 1994 by ohio state university press

pareto optimality of policy proposals with probabilistic voting this paper studies the pareto optimality properties of policy proposals and electoral outcomes when there is probabilistic voting theorem 1 proves that when the position of one candidate is taken as fixed the other candidate will propose a pareto optimal alternative this implies that whenever there is an electoral equilibrium in pure strategies the electoral outcome is pareto optimal it also implies that even if there is no such equilibrium the electoral outcomes from a sequence of elections will be pareto optimal except possibly for an initial status quo

the political economy of public health expenditure and wait times in a public private mixed health care system this paper investigates the determinants of public health expenditure in a public private mixed health care system where a longer wait time for public care is the major difference between public and private sectors voter preferences for health care vary according to their age and by income and public policy choices are part of a multi dimensional competitive political equilibrium we show how equilibrium public health expenditure and wait times depend on demographics and explain why they are independent of the distributions of income and political influence we also show that population aging may not always lead to more public health expenditure ce texte examine les determinants des depenses en sante publique dans un regime mixte public prive de soins de sante quand un temps d attente plus long est la difference majeure entre les secteurs public et prive les preferences des electeurs dans le monde de la sante varient selon l ge et le revenu et les choix de politique publique sont partie d un equilibre politique concurrentiel multidimensionnel on montre que les depenses en sante publique et les temps d attente en equilibre dependent de la demographie et que cela explique pourquoi elles sont independantes de la repartition des revenus et de l influence politique on montre aussi que le vieillissement de la population peut ne pas toujours entrainer des depenses en sante publique additionnelles

microfoundations for a stable demand for money function scientific revolutions seldom occur when the prevailing theories appear to be performing well it is only when the accepted theory fails to offer a satisfactory explanation of events that new and more robust theories are proposed of these new theories the one which can explain the successful performance of the previous theory and also the events which led to its demise becomes the replacement so it is in the history of modern monetary economics the failure of the partial adjustment model in the mid s is well documented in the united kingdom and the united states and the search for a replacement has been the main point on the agenda since that time there are many contending theories some of which are advocated by the other contributors to this controversy but the mark of a truly better theory which can be claimed to supersede the partial adjustment model is one that can explain the success and the breakdown of the previous theory as well as the events subsequently central to the argument of this paper is the importance of individual behaviour in the context of a market for monetary assets only by means of careful investigation of the microeconomic behaviour underpinning monetary economics at the individual and the market level can the stability of the money demand function be restored it is the purpose of this paper to suggest that the buffer stock approach has gone further than other approaches in dealing with the fundamental micro foundations of the demand for money it does not suggest that other approaches have no microfoundations but they tend to concentrate exclusively on specific aspects of the micro structure such as separability and ignore others relating to the behaviour of individual optimisers in a monetary market the buffer stock model has firm micro foundations which can explain the events both before and after the breakdown of the partial adjustment model section i provides an historical background to the debate and section ii gives a brief overview of buffer stock models which shows that unlike other approaches they have been able to reconcile the past success of the partial adjustment model with its present failure the nature of the microfoundations of buffer stock models are the source of the success and are discussed in more detail in section iii the final section evaluates the buffer stock approach in the light of the other alternatives

equilibrium in multicandidate probabilistic spatial voting this paper presents a multicandidate spatial model of probabilistic voting in which voter utility functions contain a random element specific to each candidate the model assumes no abstentions sincere voting and the maximization of expected vote by each candidate we derive a sufficient condition for concavity of the candidate expected vote function with which the existence of equilibrium is related to the degree of voter uncertainty we show that under concavity convergent equilibrium exists at a minimum sum point at which total distances from all voter ideal points are minimized we then discuss the location of convergent equilibrium for various measures of distance in our examples computer analysis indicates that non convergent equilibria are only locally stable and disappear as voter uncertainty increases

the demand for money a dynamic rational expectations model macroeconomic modelling generally has widely adopted the use of forwardlooking variables in behavioural relationships studies of the demand for money being something of an exception the aim of this paper is to provide preliminary empirical results of a model which explicitly incorporates expectations of the future into the demand function for narrow money the approach adopted is the modelling of the demand for money within a multi period costs of adjustment framework under the assumption of rational expectations agents are assumed to pursue a target or long run level of money balances which is itself a function of prices income and interest rates this results in an empirical specification which consists of both backwardlooking and forward looking components the model is estimated using uk data for the period i963i i983iii the remainder of the paper is divided into four sections in section i we outline the framework in which our model is derived in the following section we discuss the econometric techniques used and in section iii we present our empirical results a final section concludes

do recessions permanently change output abstract this paper examines whether negative innovations to gnp are more or less persistent than positive innovations we find that once we allow for the impulse response of gnp to be asymmetric negative innovations to gnp are observed to be much less persistent than positive ones in particular the effect of a recession on the forecast of output is found to be negligible after only eight to twelve quarters while the effect of a positive shock is estimated to be persistent and amplified over time our results may therefore help reconcile two antagonistic views about the nature of business cycle fluctuations

redistribution tax under non benevolent governments i analyze redistribution policies of majority governments in one kind of representative voting system i employ these assumptions members gain special benefits in the majority parties act strategically by using redistribution transfers the member s utility function is given in a quasi linear function the government s objective functions are the weighted summation of utilities and i classify governments according to the weight the four main results are a stable majority dose not support myopic government the stable redistribution policy of benevolent government is expressed by a scope of transfers the stable transfer of non benevolent governments depends on private utilities of the majority and opportunity costs of the minority and the altruistic government is not displayed by any other majority because it offers the total welfare of the majority to the minority as a subsidy

electoral equilibria with restricted strategies we construct a spatial election model in which candidates inherit initial positions in the strategy space presumably from previous political activity and they are restricted to strategies close to their initial positions we establish sufficient conditions for the existence of an equilibrium the equilibrium need not entail an expectation of a zero plurality for each candidate we then apply this model to a sequence of elections in which a series of opposition candidates challenge incumbents given certain regularity conditions the result will be an apparent incumbency advantage corresponding to that observed in recent congressional elections

the assessment consumer expenditure this article aims to illuminate two sets of consumption puzzles the first concerns the behavior of aggregate saving rates in the 1980s and early 1990s collapse and rebound in scandinavia and the u k and apparently a more secular decline in the u s the second set of puzzles concerns various apparent contradictions of the rational expectations permanent income hypothesis e g in time series the excess sensitivity of consumption changes to anticipated income changes and in cross sections the tendency of consumption and income age profiles to follow each other more than standard life cycle theory implies the article discusses in relatively non technical terms the implications both for euler equations and solved out consumption functions of introducing uncertainty credit constraint consumption leisure interactions habits and durability alternative to rational expectations the illiquidity of some assets and financial deregulation it also compares the merits of euler and solved out models of aggregate consumption

consumer credit in an era of financial liberalization an overreaction to repressed demand in this article we empirically analyse the factors which determined consumer credit in greece in the period before and after the financial liberalization while accounting for significant changes in structure due to the lifting of credit restrictions and the subsequent impressive boom of consumer loans we use multivariate cointegration techniques to estimate a vector error correction model vecm and identify separate demand and supply relationships for consumer loans we introduce demand and supply related shifts in parameters through the inclusion of appropriate dummy variables and trends in the long run relationships we partly deviate from the typical johansen procedure and estimate the model in two steps we find that the theoretical exclusion and coefficient size restrictions on the demand and supply cointegrating vectors are valid our results are consistent with the operation of a bank lending channel in greece we also find that the supply side was mostly responsible for the acceleration of con

public education and redistribution when talents are mismatched in democratic countries elected policymakers determine public spending the level of public spending depends on taxes that are decided by a voting mechanism policymakers also decide how to allocate funds among different policies such as public education and pure redistributive transfers how are the levels of funding for public education and redistribution determined in the political process what impacts do votes on these two policies have on inequality growth and social mobility we develop a politico economic model that highlights a novel mechanism public education provides opportunities for the children of the poor to be recognized for their talent this reduces the probability of a mismatch which takes place when individuals with low talent who come from rich families find jobs that should go to people with high talent and vice versa hence the poor may prefer public spending on education to direct redistribution while the rich prefer redistribution as education implies more competition for good jobs from the poor

the survival of the welfare state this paper provides an analytical characterization of markov perfect equilibria in a model with repeated voting where agents vote over distortionary income redistribution a key result is that the future constituency for redistributive policies depends positively on current redistribution since this affects both private investments and the future distribution of voters the model features multiple equilibria in some equilibria positive redistribution persists forever in other equilibria even a majority of beneficiaries of redistribution vote strategically so as to induce the end of the welfare state next period skill biased technical change makes the survival of the welfare state less likely

to segregate or to integrate education politics and democracy how is the quality of public education affected by the presence of private schools for the rich theory and evidence suggest that the link depends crucially on the political system we develop a theory that integrates private education and fertility decisions with voting on public schooling expenditures we find that the presence of a large private education sector benefits public schools in a broad based democracy where politicians are responsive to low income families but crowds out public education spending in a society that is politically dominated by the rich the main predictions of the theory are consistent with state level data and micro data from the u s as well as cross country evidence from the programme for international student assessment study

interest groups campaign contributions and probabilistic voting this essay develops a simple model to analyze the impact of campaign contributions on electoral policy decisions of candidates for office interest groups here are firms that select contributions under the assumption that candidates policies and opposing groups donations remain unaltered candidates however recognize that their policy choices affect contributions campaign contributions are used by candidates to affect policy oriented voters perceptions of candidates positions in this framework the introduction of campaign contributions may affect candidates electoral policies and if they do then they benefit surely exactly one of the two interest groups

a dynamic model of money credit and consumption a joint model for the uk household sector previous research has investigated consumers expenditure and money demand as separable equations we estimate them jointly as driven by the same influences credit is also included as a potential third variable that might provide a source of additional information about the monetary transmission mechanism consumption money and lending equations are modelled as an interdependent system and the significance of lending for consumption andmoney is tested theresults using uk household sector data show that a stable credit equation does exist in parallel with money demand and consumption equations and that interactions modelled in a conditional vector equilibrium correction system are favoured over independent equations

a nonlinear forecasting model of gdp growth we develop a model of gdp growth under which regime changes are triggered stochastically by an observable tension index constructed as the geometric sum of deviations of actual gdp growth from a corresponding sustainable rate within expansionary regimes the tension index tends to increase which heightens the probability of a regime change given a regime change the process becomes reversed and the tension index begins to decline along a newly established path linking the behavior of the tension index to gdp growth enables us to capture floor and ceiling effects

political influence economic interests and endogenous tax structure in a computable equilibrium framework with application to the united states 1973 and 1983 we consider the properties of a computable equilibrium model ofa competitive political economy in which the economic interestsof groups of voters and their effective influence on equilibriumpolicy outcomes can be explicitely distinguished and computed the model incorporates an amended version of the gemtap taxmodel calibrated to data for the united states for 1973 and1983 emphasis is placed on how the aggregation of gemtaphouseholds into homogeneous groups affects the numericalrepresentation of interests and influence for representativemembers of each group

a model of stability and persistence in a democracy abstract we develop an intertemporal model of political competition which accounts for three stylized facts of political life in representative democracies i political stability and the absence of discrimination ii a limited degree of political competition and iii the persistence of different political outcomes in otherwise similar economies in our model political stability is desirable for risk averse voters voters only vote for decent policy proposals which do not discriminate against single groups we derive properties of the set of possible political outcomes and study the issue of robustness against renegotiation journal of economic literature classification numbers c72 d70 d72

party policy and campaign costs in a multi constituency model of electoral competition in this essay a multi constituency model of electoral competition was developed under the assumption that party candidates possessed no effective autonomy such a model describes the polar extreme opposite that of the more common single constituency framework in which candidates have complete autonomy the existence of a nash equilibrium to the multi constituency election game was established under the assumption that parties maximize the expected number of winning seats or behaved as pure independents under any other reasonable election goal e g maximize probability of winning a majority of constituencies this existence breaks down the nature of any equilibrium was investigated in some detail and the influence of campaign costs both statutory and non statutory on party behaviour analysed this was found to be qualitatively important in particular differingeconomic resources between parties is sufficient to prevent convergence inpolicy space

are contributors rational untangling strategies of political action committees empirical public choice literature and casual observation suggest that the behavior of political action committees is remarkably unsophisticated meaning that pacs give to those legislators who would support their interests anyway thus it is suggested that contributor behavior deviates from rational behavior which is a cornerstone of economic analysis in this paper a switching regression model is estimated that allows for strategies of pacs to vary for different contribution recipients i analyze the behavior of farm pacs over three election cycles in contrast to previous findings i find that contributor behavior is not inconsistent with rational behavior contributors who attempt to influence the voting behavior of members of congress give the most money to legislators whose constituency interest suggests that they are likely to be undecided on how to vote and pacs give less money to legislators who represent districts with larger farm populations because those legislators are likely to vote in con

are we witnessing a paradigm shift in the analysis of political competition this presidential address assesses the crisis of the downsian model of political competition in light of the mounting evidence on policy divergence and evaluates the possibility that the new theories of politicians quality and political selection provide an alternative theoretical conceptualization of political competition based on a critical review of the literature and on the author s works on content analysis of policy speeches income redistribution politicians quality and political legislation cycles this address concludes that multidimensional downsian models of political competition are adequate to explain policy divergence and points out the serious theoretical and empirical problems that models of political selection have to solve

elections and income redistribution this paper has analyzed a model of elections in which each candidate selects a reputation for the distribution of income that can be expected if he is elected the first result established that whenever there are three or more groups of voters and no single group has half or more of the voters if the candidates believe that the voters choices are determined solely by the candidates redistributional reputations then there is no electoral equilibrium the candidates expectations about the voters choices were then reformulated using a qualitative response model the next result established that this alternative model leads to the existence of electoral equilibria the remainder of the paper analyzed the nature of these equilibria for any given electorate among other things the results established that there is always a unique equilibrium provided a simple procedure for finding the precise location of this equilibrium and showed that this location implicitly maximizes the sum of the voters utility functions on the possible income distributions the penultimate sections provided some simple examples which illustrate the main results in the paper and a discussion of these results in terms of the politics of redistribution

multiparty spatial competition with probabilistic voting i develop a general model of multiparty competition in which parties model voters choices by means of probabilistic choice rules the model is specified in terms of an issue salience coefficient which varies with the importance voters attach to issues as opposed to unmeasured nonissue motivations i show that when the policy salience coefficient is sufficiently low then both vote maximizing and rank maximizing parties have a dominant strategy to adopt the most popular platform which maximizes voter utilities over the entire electorate this most popular platform therefore represents a convergent equilibrium when all parties are vote or rank maximizing numerical estimates suggest that this equilibrium result holds for degrees of issue voting which exceed the parameters behavioral researchers have estimated for various historical elections

a theory of voting in large elections this paper provides a game theoretic model of probabilistic voting and then examines the incentives faced by candidates in a spatial model of elections in our model voters strategies form a quantal response equilibrium qre which merges strategic voting and probabilistic behavior we first show that a qre in the voting game exists for all elections with a finite number of candidates and then proceed to show that with enough voters and the addition of a regularity condition on voters utilities a nash equilibrium profile of platforms exists when candidates seek to maximize their expected margin of victory this equilibrium 1 consists of all candidates converging to the policy that maximizes the expected sum of voters utilities 2 exists even when voters can abstain and 3 is unique when there are only 2 candidates