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

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

interpreting net fiscal incidence calculations this paper evaluates calculations of net fiscal incidence using an applied general equilibrium model of australia into which public goods are incorporated results indicate that it is inappropriate to regard the redistributive impacts of government policies as a zero sum game for large reductions in public goods provision and taxes the dominant effect is the foregone consumer surplus from suboptimal public goods provision in addition the redistributive pattern of small charges are quite different from large charges marginal and average net fiscal incidence thus need to be clearly separated a point not emphasized in existing literature copyright 1987 by mit press

electoral politics interest groups and the size of government electoral politics interest groups and the size of government i introduction interest groups have been considered main actors in the political drama for some time now by political scientists as in bentley 1908 schattschneider 1935 and truman 1951 and more recently by economist also such as olson 1965 and stigler 1975 despite the widespread consensus on their importance there have been few formal attempts to analyze their impact on public policies thus borooah and van der ploeg 1983 90 were moved to declare that theory based on the importance of different interest groups is badly needed in economics an important exception is becker s 1983 1985 analysis of interest group competition becker draws insights about the nature of the trade offs that occur when interest groups compete for political influence but becker consciously avoids incorporating into his model political institutions such as voting voting rules and candidates 1983 391 4 1985 330 rather he assumes that the political process operates as a veil through which the underlying strengths and demands of various interest groups are revealed this paper takes a different tack but one complementary to becker s approach the analysis is based on an explicit model of the political process that includes interest groups in the model interest group influence is a potential supply of votes for which parties or candidates compete each party seeks a winning coalition of voters and thus engages in implicit logrolling tullock 1959 572 an equilibrium exists in the competition for the support of interest groups and the nature of the equilibrium electoral platforms is identified below embodied in the characterization of the equilibria is a set of parameters that can be said to measure the strengths of the various interest groups and which enable one to identify how candidates change their policy positions in response to a change in the strength of an interest group it is therefore possible to analyze simultaneously the existence of an electoral equilibrium its nature including its normative properties and changes in equilibrium due to shifts in the balance of forces between competing groups 1 in contrast to becker 1983 1985 these analytical features are not assumed outright rather they are based on an underlying model of elections the theoretical underpinnings for this model are discussed in section ii interest groups are often alleged to be responsible in part for recent increases in the size of government in western democracies 2 therefore in sections iii and iv a model of the political process is used to study the impact of an increase in the influence of a particular interest group on government size in the simple models of the public sector considered here increasing group influence per se does not cause the size of the government to increase but an increase in the government s size does result when i there are constraints on the government s ability to change tax shares in response to a shift in group power or ii there is a publicly provided good which benefits one untaxed group and that group s sole concern with government policy is to maximize the amount of the good that it gets the paper concludes by considering some of the normative implications of the results ii interest groups in the electoral process there are two sets of actors in the model parties and interest groups and two sets of relationships which must be analyzed the relationships between interest groups and the parties and the relationship between the parties themselves with respect to the first question this paper investigates the determinants of each interest group s influence on the platforms proposed by the parties with respect to the second it explores whether the competition for votes between the parties produces an equilibrium and if so what its properties are

sales practice and market evolution the case of virtual reality abstract this paper analyses how sales practices of industry pioneers influence the evolution of a new market with particular reference to the case of virtual reality vr in the underlying diffusion process the probability of a new user adopting this technology depends on the quality of experience enjoyed by existing users good sales practice is expensive but leads to a high proportion of satisfied users which is good for subsequent diffusion while suppliers may be tempted to hype up the technology to obtain additional sales in the short term those customers persuaded by hype are often dissatisfied with their experiences and that is bad for diffusion in the longer term the paper draws on a detailed study of the selling process in vr to develop a simulation model which is used to explore how sales practice influences adoption decisions customer satisfaction and the ultimate evolution of the market

debt and taxes in the theory of public finance if a specified amount of government spending must be financed how should that finance be divided between taxes and government borrowing in the case of a temporary increase in government spending it has been argued that debt finance is optimal because the small increments in all future tax rates to finance interest payments involves a smaller excess burden than the single large tax rate increase that would be required to avoid an initial increase in the national debt this argument ignores the excess burden of debt finance that results if the initial capital stock is smaller than optimal e g because of taxes or capital income the first section of the present paper shows how the debt finance advantage of a small increase in tax rates can be explicitly balanced against the disadvantage of the excess burden that arises from additional debt the analysis shows that with plausible parameter values the excess burden of debt finance is likely to outweigh the advantage of avoiding a large single tax change and therefore that financing a temporary increase in government spending by an immediate tax increase is likely to be preferable to debt financing the second section examines the appropriate response to a permanent increase in government spending and shows that such spending cannot be financed by a permanent increase in government debt moreover whenever the golden rule level of capital intensity is an optimality condition independent of the level of government spending any increase in government spending should be matched by an equal increase in tax revenue this abstract was borrowed from another version of this item

from theory to practice canadian economists contributions to public finance we survey canadian economists contributions to the field of public finance from the mid 1980s to 2016 we highlight the development and extension of the models and tools of public economics and the empirical studies that have deepened our understanding of the efficiency and distributional issues over a wide range of public finance issues we also highlight contributions to the development of policies through commissioned reports and the important role that canadian institutions the canadian tax foundation the think tanks and the federal and provincial departments of finance have played in shaping tax and fiscal policies de la theorie a la pratique contributions des economistes canadiens a la finance publique on examine les contributions des economistes canadiens au domaine de la finance publique du milieu des annees 1980 a 2016 on souligne le developpement et l extension des modeles et des outils d economie publique et les etudes empiriques qui ont aide a approfondir notre comprehension des enjeux d efficacite et de distribution dans un vaste eventail de questions de finance publique on souligne aussi les contributions des rapports commandites au developpement de politiques publiques ainsi que le role important d institutions canadiennes l association canadienne d etudes fiscales les groupes d experts ainsi que les ministeres des finances du gouvernement federal et des gouvernements provinciaux dans le design des politiques fiscales

the effect of the expansion of the voting franchise on the size of government this paper examines the claim that expansion of the voting franchise has been an important factor in the growth of government state government spending and state and local spending are explained using a panel of 46 states for 1950 88 elimination of poll taxes and literacy tests led to higher turnout particularly among the poor and a poorer pivotal voter as predicted we find that these changes a fall in the income of voters relative to state income and the ouster of republicans from state government led to a sharp rise in welfare spending but no change in other spending

the significance of the probabilistic voting theorem for centuries it has been recognized that democratic government is endangered by two unfortunate properties of majority rule voting the absence of an electoral equilibrium comparable to the general equilibrium in the economy and the risk of expropriation of minorities by majorities much of democratic theory is devoted to the study of how these dangers can be averted the probabilistic voting theorem has been alleged to show that these dangers are illusory it is argued in this paper that though the theorem is valid on its assumptions these assumptions are considerably stronger and the theorem is less comforting about the stability of democratic government than one might at first suppose

u s deficits since world war i the tax smoothing theory suggests that deficits would respond particularly to recession temporarily high government spending and anticipated inflation my empirical estimates indicate that a relation of this type is reasonably stable in the u s since at least 1916 in particular the statistical evidence does not support the idea that there has been a shift toward a fiscal policy that generates either more real public debt on average or that generates larger deficits in response to recessions further the deficits for 1982 3 and popular projections formed in 1984 for 1984 5 are consistent with the previous structure the high values of these deficits reflect the customary response to substantial recession interacting with big government and to expected inflation

a positive theory of the earnings relationship of unemployment benefits in a wage bargaining model a stronger earnings relationship of unemployment benefits may reduce wages therefore the benefit structure significantly influences profits and trade union utility raising the question as to how the benefit structure is determined in the political process we consider a government that chooses the earnings relationship in order to maximize its political support our model predicts a strong earnings relationship under right wing governments and a weak relationship when unions are influential using panel data for 19 oecd countries we find support for these theoretical predictions moreover we show that the earnings relationship varies negatively with openness

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

campaign allocations under probabilistic voting we develop a probabilistic voting model where candidates compete by advertising in different media markets ads are viewed by everyone within a market and cannot be targeted to subgroups such as one candidate s partisans candidates estimate the distribution of voter preference intensities in a market and campaign ads then shift this distribution individuals with any intensity vote with some probability for each candidate we derive comparative static implications of changes in a variety of factors on the advertising decisions of each candidate using campaign advertising data from 2002 we find these results to be consistent with actual campaign allocation behavior

marginal risk aversion and preferences in a betting market an individual s behavioural attitudes toward variance and non symmetry in the payoff distributions of pari mutuel gambles are empirically examined using the von neumann morgenstern expected utility of wealth paradigm preferences over payoff distributions for a representative bettor are estimated from observed payoffs at a greyhound racetrack the results indicate that the representative bettor exhibits increasing absolute risk aversion and given that the representative bettor is locally non satiated with regard to wealth exhibits preference for variance and aversion to positive skewness in the payoff distributions of the gambles examined

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

why can modern governments tax so much an agency model of firms as fiscal intermediaries we develop an agency model explaining why third party information reporting by firms makes tax enforcement successful while third party reporting would be ineffective with frictionless collusion between firms and employees collusive evasion is impossible to sustain in firms with many employees and accurate business records as any single employee may reveal evasion we embed our agency model into a macro model where the number of employees grows with development showing that the tax take evolves as an s shape driven by changes in third party information we show that our model is consistent with a set of stylized facts on taxation and development

sequential parimutuel games abstract in a parimutuel betting system a successful player s return depends on the number of other players who choose the same action this paper examines a general solution for two action sequential parimutuel games and shows how the unique equilibrium of such games leads to a simple pattern of behavior in particular we show that there is an advantage to being an early mover that early players might choose actions with an ex ante low probability of success and that player action choices can flip with small changes in the parameters of the game

rank stock order and epidemic effects in the diffusion of new process technologies an empirical model in this article we construct a general duration model of technology adoption that incorporates the main factors discussed in different theories of diffusion of new process technologies the model is applied to data on diffusion of cnc in the uk engineering industry although we find strong evidence in support of rank and endogenous learning effects there seems to be little evidence in support of the stock and order effects the main factors affecting the diffusion of cnc are found to be endogenous learning firm size industry growth rates the cost of the technology and expected changes in the cost of the technology

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 taxman tools up an event history study of the introduction of the personal income tax abstract the introduction of income taxation was a landmark in the historical development of the fiscal state of the now developed world this paper presents an event history study of the adoption of the income tax in 17 countries from western europe north america oceania and japan between 1815 and 1939 we find evidence that spending pressures reductions in tax collection costs and to a lesser extent social learning played a significant role for the adoption decision we also find evidence that the extension of the franchise at first reduced the likelihood of adoption of the income tax but eventually as universal suffrage was approached increased the likelihood

a positive model of tax structure the model of tax structure developed in this paper is one in which the composition of revenues and the structure of specific taxes arise naturally as the result of self interested political behavior it is assumed that political agents choose tax structure so as to minimize the political costs or expected net loss in votes associated with raising a budget of given size several hypotheses concerning the nature of political cost functions are developed and applied to an explanation of the differences among u s states in their reliance on income taxation the empirical application emphasizes differences in political constraints across jurisdictions in the belief that much can be learned about the choice of policy instruments by studying structural adjustments in response to varying constraints the paper discusses how the proposed approach differs from or is consistent with that adopted by other authors and how the estimating equation relates to other empirical research in the literature

initial asset inequality and tariff formation a cross country analysis abstract using cross country evidence it is found that a country s initial asset inequality is positively and significantly associated with the formation of the average tariff rate even after controlling for the democracy index and some endowment measures

a drawback of electoral competition in most major democracies there are very few parties compared to the number of possible policy positions held by voters we provide an efficiency rationale for why it might be appropriate to limit the proliferation of parties in our model the larger the number of parties the greater the inefficiency of the outcome of electoral competition the reason is that when the number of parties increases electoral incentives push each party to focus its electoral promises on a narrower constituency and then special interest policies replace more efficient policies that have diffuse benefits the analysis provides a possible explanation for the existence of institutional features that limit the extent of electoral competition thresholds of exclusion runoff electoral systems and majoritarian two party political systems jel d82 l15

learning from the behavior of others conformity fads and informational cascades learning by observing the past decisions of others can help explain some otherwise puzzling phenomena about human behavior for example why do people tend to converge on similar behavior why is mass behavior prone to error and fads the authors argue that the theory of observational learning and particularly of informational cascades has much to offer economics business strategy political science and the study of criminal behavior

technological diffusion with social learning this paper attributes the slow diffusion of innovations to an informational externality in the adoption process the profitability of new technologies is uncertain but firing can learn progressively through observing the adoption experience of others given this prospect of social learning every firm would prefer that other firms adopt before it does in the absence of explicit coordination the firms could end up in a sequence of waiting contests this results in staggered adoptions even when all firms are ex ante identical the pace of diffusion is determined endogenously and shown to depend on the characteristics of the innovation copyright 1995 by blackwell publishing ltd

searching for positive returns at the track a multinomial logic model for handicapping horse races this paper investigates fundamental investment strategies to detect and exploit the public s systematic errors in horse race wager markets a handicapping model is developed and applied to win betting in the pari mutuel system a multinomial logit model of the horse racing process is posited and estimated on a data base of 200 races a recently developed procedure for exploiting the information content of rank ordered choice sets is employed to obtain more efficient parameter estimates the variables in this discrete choice probability model include horse and jockey characteristics plus several race specific features hold out sampling procedures are employed to evaluate wagering strategies a wagering strategy that involves unobtrusive bets with a side constraint eliminating long shot betting appears to offer the promise of positive expected returns even in the presence of the typically large track take encountered at thoroughbred racing events

a model of electroral competition with interest groups abstract this letter specifies and analyzes a model of electoral competition with interest groups the assumptions used in the model are drawn from the existing literature we i show that certain assumptions that have been used in empirical analyses of voting provide a sufficient condition for the existence of an electoral equilibrium and ii characterize the equilibrium strategies embodied in the characterization is a set of parameters that can be said to measure the electoral strengths of the interest groups we also state the appropriate definition of the pareto relation for our model and note that each of the equilibrium strategies is pareto optimal

a swing state theory of trade protection in the electoral college this paper analyzes trade policy determination in the electoral college in the presence of swing voters it determines the circumstances under which incumbent politicians have an incentive to build a reputation for protectionism thus swaying voting decisions and improving their re election probability strategic trade protection is shown to be more likely when protectionist swing voters have a lead over free trade supporters in states with relatively strong electoral competition and in states representing a larger proportion of electoral college votes an empirical test using a measure of industrial concentration in swing and decisive u s states lends support to the theoretical findings

the economics and politics of the structure of public expenditure the paper derives a complete system ofdemand equations for public consumptionexpenditures as the outcome of rationalbehaviour in a model where governmentmaximizes expected electoral support theallocation of expenditures is found todepend not only on the prices of publicservices and total expenditure and tosatisfy the constraints of demand theory which have been the focus of attention ofprevious empirical studies of theallocation of public expenditures but inaddition on the prices of privateconsumption goods the distribution ofvoter incomes and the expected change invoter support from varying the levels ofpublic provision

debt and tariffs an empirical investigation of the evolution of revenue systems abstract this paper presents a theoretical framework where government chooses fiscal structure so as to maximize political support and where the evolution of fiscal systems is determined by changing economic political and administrative factors estimating equations are derived and the model is used to explain the development of revenue structure in canada from 1871 to 1913 a period when major revenue sources consisted of the tariff debt and excises the empirical analysis distinguishes between government plans and ex post observations of public revenues and places particular emphasis on the derivation of hypotheses linking economic political and administrative variables to revenue structure

the size of government most research on the causes of growth in government expenditure has focused on the demand for government services in this paper we argue that in fact this growth may have occurred because of changes in supply changes in technology leading to increased specialization and thus increased opportunity costs of self production have led to increased market production and increased record keeping also female labor force participation has increased both of these factors serve to reduce the efficiency cost of collecting taxes if the demand for government spending has not changed this increase in supply would lead to a larger public sector we estimate a system of simultaneous equations for the period 1929 1970 incorporating this hypothesis and the results are consistent with the theory we are able to explain virtually all of the growth of government increases in female labor force participation seems to be a very important variable in this explanation

endogenous tariff formation under representative democracy a probabilistic voting model wolfgang mayer 1984 applied duncan black s 1948 median voter theorem to investigate endogenous tariff formation under direct democracy this paper extends mayer s model from direct to representative democracy the extension from direct to representative democracy is straightforward if candidates possess perfect information one can still apply the median voter theorem for a candidate in a two party representative democracy also chooses the most preferred tariff of the median voter mayer 1984 himself fully recognized this direct extension 2 nevertheless if candidates possess imperfect information which is believed typical in the real world how the medianvoter outcome might alter or be modified remains unanswered the purpose of the current paper is to answer the question that candidates are something more than simply policy surrogates is the highlight of the article by james m enelow and melvin j hinich 1982 in contrast to direct democracy in which only policies matter in voter choices in a representative democracy candidates are thought to be judged by voters on the basis of both nonpolicy candidate characteristics and proposed policies in this paper i adopt the view of enelow and hinich 1982 and combine it with candidate uncertainty more specifically i consider a model incorporating candidates lack of information regarding voters nonpolicy preferences the model gives rise to probabilistic rather than deterministic voting 3 i show that in such a framework the equilibrium tariff is no longer dictated by the most preferred tariff of the median voter but is a weighted mean or even the mean of voters most preferred tariffs moreover the income distribution resulting from the equilibrium tariff tends to be more equalized than that from free trade the plan of the paper is as follows section i introduces the model of the paper it consists of an economic and a political structure section ii characterizes the equilibrium tariff and discusses its implications for income distribution concluding remarks are presented in section iii

economic and political foundations of tax structure this paper derives the essential elements of tax systems as the outcome of rational behavior in a model w here government maximizes expected support and where opposition to ta xation depends on the loss in full income the analysis treats the le vel of expenditures as endogenous and integrates the influence of adm inistration costs with that of political and economic factors tax st ructure is shown to be a system of related components in equilibrium a final section compares results to two alternative approaches opti mal taxation and the leviathan model copyright 1988 by american economic association

the role of tax bases and collections costs in the determination of income tax rates seigniorage and inflation a growing theoretical literature on optimal taxation predicts that governments will set the tax rates on money holdings and on more traditional tax bases to minimize the deadweight losses of collecting government revenue under the presumption that relative collection costs and tax bases have not changed significantly over time the empirical time series seigniorage literature has focused on the theory s tax smoothing implication finding only weak support we show that changes in collections costs and tax bases played an important role in the determination of tax composition and find stronger support for tax smoothing when this is taken into account

economic integration and the relationship between profit and wage taxes this paper analyzes the development of the ratio of corporate taxes to wage taxes using a simple political economy model with workers and capitalists that own internationally mobile and immobile firms among other results our model predicts that countries reduce their corporate tax rate relative to the wage tax when preferences for public goods increase or when the share of capital employed in multinational firms is rising we further show how an increase in the wage share changes both the relative size of tax bases and the political influence of different income groups the predicted relationships are tested using panel data for 23 oecd countries for the period 1980 through 2004 the results of the empirical analysis support our main hypotheses

estimating risk aversion from arrow debreu portfolio choice this paper derives necessary and sufficient conditions for arrow debreu choices of contingent consumption to be compatibl e with the maximization of a state independent expected utility funct ion that exhibits increasing or decreasing absolute risk aversion or increasing or decreasing relative risk aversion the conditions can be used to bound different measures of risk aversion based on a singl e observation of arrow debreu portfolio choice copyright 1988 by the econometric society

tests of the rational expectations hypothesis this paper reviews evidence on the structure of anticipation from a number of empirical studies jack muth s rational expectations hypothesis is compared with a variety of alternative models including ferber s law the implicit expectations model of edwin mills and muth s new errors in the variables model the cumulative evidence is of such strength as to compel the suspension of belief in the concept of rational expectations this implies that it is a mistake to proceed under the maintained hypothesis that expectations are rational instead it is necessary to test the sensitivity of empirical and theoretical results to alternative assumptions about the structure by which anticipations are generated copyright 1986 by american economic association

models of technology diffusion abstract the literature on new technology diffusion is vast and it spills over many conventional disciplinary boundaries this paper surveys the literature by focusing on alternative explanations of the dominant stylized fact that the usage of new technologies over time typically follows an s curve the most commonly found model which is used to account for this model is the so called epidemic model which builds on the premise that what limits the speed of usage is the lack of information available about the new technology how to use it and what it does the leading alternate model is often called the probit model which follows from the premise that different firms with different goals and abilities are likely to want to adopt the new technology at different times in this model diffusion occurs as firms of different types gradually adopt it there are actually many ways to generate an s curve and the third class of models which we examine are models of density dependence popularized by population ecologists in these models the twin forces of legitimation and competition help to establish new technologies and then ultimately limit their take up finally we look at models in which the initial choice between different variants of the new technology affect the subsequent diffusion speed of the chosen technology such models often rely on information cascades which drive herd like adoption behaviour when a particular variant is finally selected

on 64 majority rule introduction d une definition de consensus social base sur deux restrictions une sur les preferences individuelles et l autre sur la distribution des preferences dans ce cas de consensus une regle de majorite a 64 presente de nombreuses proprietes interessantes par opposition aux regles de super majorite possedant des proprietes paradoxales comme les regles electorales americaines

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 theory of competition among pressure groups for political influence this paper presents a theory of competition among pressure groups for political influence political equilibrium depends on the efficiency of each group in producing pressure the effect of additional pressure on their influence the number of persons in different groups and the deadweight cost of taxes and subsidies an increase in deadweight costs discourages pressure by subsidized groups and encourages pressure by taxpayers this analysis unifies the view that governments correct market failures with the view that they favor the politically powerful both are produced by the competition for political favors

an examination of the determinants of biased behaviour in a market for state contingent claims we develop a model to explain the differential incidence of the favourite longshot bias in parallel sectors of the pari mutuel horserace betting market hypotheses are derived from the model and these are tested using uk data to explore the origins of the bias significant variations in the bias are discovered between market sectors on and off racetrack these results shed light on competing demand side explanations for the favourite longshot bias and suggest that it is affected by a combination of behavioural and operational features of the markets and the types of bettors informed and leisure which they attract

legislators and interest groups how unorganized interests get represented this paper derives a supply price for public policy using a constrained maximization model in the model three sets of agents each have preferences over outcomes organized interest groups offer campaign contributions to improve their own wealth voters offer votes to obtain outcomes closer to their most preferred outcomes and legislators seek both campaign contributions and votes to obtain reelection a given legislator s supply price for policy is shown to depend on the productivity of his effort as determined by committee assignments priority and ability and by the preferences of his unorganized constituency in the home district two extreme assumptions about the effectiveness of campaign spending in eliciting votes are used to illustrate the comparative statics properties of the model the prediction of the model is that interest groups will in general seek out legislators whose voters are indifferent to the policy the interest group seeks thus voters who do have preferences over policy are in effect represented even though they are not organized

insider trading herding behaviour and market plungers in the british horse race betting market crafts n f r crafts 1985 economica 52 295 304 suggested that a pronounced shortening of bookmaker odds in horse race betting markets could indicate the presence of insider traders this paper uses the shin h s shin 1993 economic journal 103 1141 53 measure of the incidence of insider trading at the beginning of the betting period opening prices and at the end of it starting prices to distinguish the shortening of odds caused by insider trading from that caused by herding behaviour it turns out that significant positive betting returns are achieved when shortening odds are accompanied by a rise in the shin measure when they are accompanied by a fall returns are negative suggesting herd behaviour

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

recreational versus professional bettors performance differences and efficiency implications using a novel dataset which allows comparisons across heterogeneous sub groups of pari mutuel bettors we demonstrate significant behaviour and performance distinctions between recreational and professional investors professionals ability to earn abnormal returns on short odds horses in high volume markets challenges the existing empirical consensus which offers very limited evidence of betting market inefficiency the results offer important lessons for betting operators and regulators and highlight the potential for similar avenues of investigation in other speculative markets

the favourite longshot bias in parimutuel betting a clarification of the explanation that bettors like to bet longshots abstract one explanation of the favourite longshot bias in parimutuel betting is that bettors derive utility from betting longshots the purpose of this paper is to explore the conditions where such an explanation makes sense we posit a simple two horse race where there are two groups of bettors one group always bets the longshot the other bets on the basis of expected value the model yields two results in the absence of transactions costs track take there is no favourite longshot bias however if the track take is positive we would expect to observe the bias the primary reason is that there is no short selling mechanism in parimutuel betting markets hence the explanation that bettors like to bet longshots also requires transactions costs and no short selling

searching for the favourite longshot bias down under an examination of the new zealand pari mutuel betting market this paper tests for the presence of the favourite longshot bias in a new setting this bias 150 the tendency for bettors to underbet favourites and overbet longshots 150 has been found in most studies of pari mutuel and bookmaking betting markets in the usa the uk and australia however there is growing evidence that in at least some pari mutuel betting markets there is no favourite longshot bias this paper examines the previously unexplored new zealand pari mutuel betting market on horse races for evidence of this bias utilizing a large sample of recent new zealand thoroughbred horse races it is found that while early off track bettors price this bias into odds late on and off track bettors eliminate much of the bias by the close of betting that is the results reinforce the view that not all pari mutuel betting markets are characterized by a favourite longshot bias at the close of betting evidence is also found that late bettors in this market are smart bettors