governmental behavior in representative democracy a synthesis of the theoretical literature what is the impact of bureaucratic behaviors on tax rates what is preferable a bureaucrat or a partisan politician does a flypaper effect occur when lobby groups influence public policies this article tries to answer these questions by analyzing and comparing six different models of public choice 1 the median voter model 2 the leviathan model 3 the slack maximizing model 4 a general model of bureaucracy 5 the partisan politicians model and 6 a general model of lobbying among several results it is shown that the median voter s income and tax share almost always play a significant role in the design of the public good tax package even if the government does not explicitly try to maximize the median voter s utility the article also provides a synthesis of the positive analysis of the flypaper effect

revenue maximizing dutch auctions with discrete bid levels abstract this paper is concerned with setting a predetermined number of bid levels in a dutch auction to maximize the auctioneer s expected revenue as a departure from the traditional methods used by applied economists and game theorists a novel approach is taken in this study to tackle the problem by formulating the auctioning process as a constrained nonlinear program and applying standard optimization techniques to solve it aside from proposing respective closed form formulae for computing the optimal bid levels and the auctioneer s maximum expected revenue we also show that the bid decrements should be increasing if there are two or more bidders in the dutch auction additionally the auctioneer s maximum expected revenue increases with the number of bidders as well as the number of bid levels finally managerial implications of the key findings as well as limitations of this research work are discussed

empirical implications of equilibrium bidding in first price symmetric common value auctions this paper studies federal auctions for wildcat leases on the outer continental shelf from 1954 to 1970 these are leases where bidders privately acquire at some cost noisy but equally informative signals about the amount of oil and gas that may be present we develop tests of rational and equilibrium bidding in a common values model that are implemented using data on bids and ex post values we also use data on tract location and exposr values to test the comparative static prediction that bidders may bid less aggressively in common value auctions when they expect more competition we find that bidders are aware of the winner s curse and their bidding is largely consistent with equilibrium

how to set minimum acceptable bids with an application to real estate auctions in a general auction model with affiliated signals common components to valuations and endogenous entry we compute the equilibrium bidding strategies and outcomes and derive a lower bound on the optimal reserve price this lower bound can be computed using data on past auctions combined with information about the subsequent sales prices of unsold goods we illustrate how to compute the lower bound using data from real estate auctions

a representative consumer theorem for discrete choice models in networked markets we provide an alternative way to model sequential decision processes which is consistent with the random utility maximization hypothesis and the existence of a representative agent our result is stated on terms of a direct utility representation and it does not depend on parametric assumptions

voter turnout and fiscal policy abstract in this paper we examine whether shocks in voting costs can impact elected representatives quality defined as the capacity to fund projects at the lowest cost using data on french municipalities and local variations in seasonal infections incidence as a shock on voting cost we estimate that higher incidence lowers voter turnout increases subsidies obtained by a municipality decreases harmful financial decisions and increases the municipality s investment in infrastructure we present a model where these predictions would hold in particular for municipalities with a high base level of turnout

jurisdiction size political participation and the allocation of resources this paper analyzes the effect of population size on politicalparticipation and allocative efficiency increasing populationis generally found to reduce political participation however since participation is not evenly spread throughout thepopulation this will have consequences for allocation namely we argue that increasing population size shifts powerto the rich we discuss the consequences for the optimal sizeof jurisdictions the size of government and the measurementof publicness

consensus building how to persuade a group many decisions in private and public organizations are made by groups the paper explores strategies that the sponsor of a proposal may employ to convince a qualified majority of group members to approve the proposal adopting a mechanism design approach to communication it emphasizes the need to distill information selectively to key members of the group and to engineer persuasion cascades in which members who are brought on board sway the opinion of others the paper unveils the factors such as the extent of congruence among group members and between them and the sponsor and the size and governance of the group that condition the sponsor s ability to maneuver and get his project approved

compulsory versus voluntary voting an experimental study abstract we report on an experiment comparing compulsory and voluntary voting institutions in a voting game with common preferences rational choice theory predicts sharp differences in voter behavior between these two institutions if voting is compulsory then voters may find it rational to vote insincerely i e against their private information if voting is voluntary so that abstention is allowed then sincere voting in accordance with a voter s private information is always rational while participation may become strategic we find strong support for these theoretical predictions in our experimental data moreover voters adapt their decisions to the voting institution in place in such a way as to make the group decision accuracy differences between the two voting institutions negligible the latter finding may serve to rationalize the co existence of compulsory and voluntary voting institutions in nature

media markets and localism does local news en espanol boost hispanic voter turnout the same time the availability of these products reduces the consumption of local news not only because some consumers prefer national and global content to local information but also because local media products that lose a significant number of consumers are forced to cut qual ity and they may even cease to exist if their audience falls below a critical threshold for these reasons some scholars claim that the rise of integrated media markets undermines local civic engagement robert d putnam 2000 against this backdrop many regulatory agencies including the federal communications commission fcc of the united states seek to protect local media and promote localism for instance by limiting ownership concentration 1 however localism is desirable only if there are in fact positive spillovers from the provision of local content that can help justify the loss of private welfare that integrated media markets would provide in this paper we propose a simple test for the existence of spillovers from local news pro gramming asking if the presence of local television news affects civic behavior the ubiq uity of local news programming across all us metro areas makes it impossible to study its effects on the general population in contrast the availability of spanish language news has increased considerably in recent years providing us with an experiment to study the effect of local news on one important measure of civic engagement voter turnout in local elections in particular we use a differencing approach asking whether hispanic voter turnout is higher in relation to non hispanic turnout in metro areas with spanish language local television news our results indicate that spanish language local television news raises hispanic turnout by more than 4 percentage points local news targeted at hispanics has no effect on the participa tion of non hispanics and as one would expect a significantly smaller effect in years with a presidential race in markets with spanish language news about a quarter of hispanics turn to these programs our estimates thus imply that news in spanish caused about a fifth of spanish language news viewers to start voting interestingly hispanics with access to news in spanish do not increase the time they spend watching news content analyses of spanish language news programs in the united states find that these shows are much more likely to report on

imposing a turnout threshold in referendums we construct a model of a yes no referendum for which the outcome is valid only if the voter turnout rate is greater than a predetermined value with such a turnout threshold three types of equilibria exist in each of which the voters who favor the status quo either go to the polls abstain or use mixed strategies we show that abstaining is more likely to realize the status quo than going to the polls if the threshold is sufficiently high whereas one of the mixed strategy equilibria is least likely to realize the status quo for any level of threshold

market performance with multiproduct firms we revisit the fundamental issue of market provision of variety associated with chamberlin spence and dixit stiglitz when firms sell multiple products both products and firms are horizontally differentiated we propose a general nested demand framework where consumers first decide upon a firm then which variant to buy and how much the nested ces is a special case we use it to determine the market s biases when firms compete in product ranges and prices the market system attracts too many firms with too few products per firm firms restrain product ranges to relax price competition but this exacerbates over entry

experimental comparison of impact of auction format on carbon allowance market abstract carbon allowances auctions are a good way to achieve the carbon allowance allocations under international agreements to address global climate change based on an economic experiment this paper compares three possible carbon allowance auction formats uniform price auction discriminatory price auction and english clock auction with heterogeneous bidders coal power plants and gas power plants from four perspectives carbon price auction efficiency demand withholding and fluctuations in power supplies possibilities of collusion among bidders and impacts of allowance banking and penalty price on bidders behaviors under different auction formats are also examined the results show that 1 when there are relatively more bidders and there are no obvious communications between them despite there being some tacit collusion efficiency of english clock auction is greater than the other two formats 2 when there are relatively fewer bidders and there are obvious communications between them explicit collusions are observed under english clock auction in this case discriminatory price auction helps prevent collusion to some extents 3 in the banking scenario more speculations are observed while penalty price exacerbates price volatility

media competition and electoral politics we build a framework linking competition in the media market to political participation media outlets report on the ability of candidates running for office and compete for audience through their choice of slant citizens consume news only if the expected utility of being informed about candidates ability is sufficiently large for their group collectively our results can reconcile seemingly contradictory empirical evidence showing that entry in the media market can either increase or decrease turnout while information pushes up independent turnout partisans adjust their turnout to the ability of their preferred candidate and on average they vote less when informed

information effects in uniform price multi unit dutch auctions we design a multi unit descending price dutch auction mechanism that has applications for resource allocation and pricing problems we address specific auction design choices by theoretically and experimentally determining optimal information disclosure along two dimensions bidders are either informed of the number of bidders in the auction or know that it is one of two possible sizes they also either know the number of units remaining for sale or are unaware of how many units have been taken by other bidders we find that revealing group size decreases bids and therefore revenue if units remaining are not shown when group size is unknown the price also falls if the number of units remaining is revealed the most efficient and largest revenue outcome occurs when bidders are not provided information on either group size or units remaining these laboratory results conform to some directional predictions from our theory although overbidding is common

effects of information revelation policies under market structure uncertainty geographically dispersed sellers in electronic reverse marketplaces such as those hosted by market makers like ariba are uncertain about the number of competitors they face in any given market session we refer to this uncertainty about the number of competitors as market structure uncertainty over the course of several market sessions sellers learn about the competitive nature of the marketplace how they learn to reduce the market structure uncertainty depends on the market transparency scheme or the revelation policy adopted a revelation policy determines the extent to which information the number of sellers in a session their bidding patterns etc is revealed to sellers because these policies control what sellers learn and how they bid in future sessions they determine buyer surplus possibly because market structure uncertainty is more prevalent in information technology enabled marketplaces than traditional ones prior work has not addressed the impact of revelation policies on this type of uncertainty currently there is little guidance available to buyers in choosing the appropriate revelation policy to address this information technology enabled problem we use game theory to compare the buyer surplus generated under a set of revelation policies commonly used in electronic reverse marketplaces we demonstrate that the policy that generates the least amount of market structure uncertainty for the sellers always maximizes buyer surplus we further investigate to provide intuition regarding how bidders reactions to overcome uncertainty differs with the nature of uncertainty and how those reactions impact buyer surplus

auctions with a stochastic number of bidders abstract auction theory is generalized by allowing the number of bidders to be stochastic in a first price sealed bid auction with bidders having constant absolute risk aversion the expected selling price is higher when the bidders do not know how many other bidders there are than when they do know this thus the seller should conceal the number of bidders if he can moreover a bidder s ex ante expected utility is the same whether or not there is a policy of concealing the number of bidders concealment therefore pareto dominates announcement with risk neutral bidders the optimal auction is the same whether or not the bidders know who their competitors are

compensating for the winner s curse experimental evidence abstract we conduct experiments on common value auctions with rationing in each auction the good is randomly allocated to one of the k highest bidders at the k 1 st highest price when k 1 bidders are rationed as the degree of rationing increases the equilibrium bid function increases consistent with prior literature we find that bidders suffer from the winner s curse and lose money on average however bids in the experiments do adjust in the appropriate direction as the degree of rationing changes providing support for the comparative statics implications of the theory our results are consistent with subjects having an intuitive understanding of the winner s curse but being unable to compute the equilibrium bid levels

meetings with costly participation we study a collective decision making process in which people interested in an issue may participate at a cost in a meeting and the resulting decision is a compromise among the participants preferences we show that the equilibrium number of participants is small and their positions are extreme and when the compromise is the median the outcome is likely to be random the model and its equilibria are consistent with evidence on the procedures and outcomes of us regulatory hearings jel d7 h0 l5

information aggregation and turnout in proportional representation a laboratory experiment abstract this paper documents a laboratory experiment that analyzes voter participation in common interest proportional representation pr elections comparing this with majority rule consistent with theoretical predictions poorly informed voters in either system abstain from voting thereby shifting weight to those who are better informed a dilution problem makes mistakes especially costly under pr so abstention is higher in pr in contrast with private interest environments and welfare is lower deviations from nash equilibrium predictions can be accommodated by a logit version of quantal response equilibrium qre which allows for voter mistakes

does centralization increase the size of government abstract are fiscal programs larger or smaller if they are run centrally rather than locally in a prospective federation we abstract completely from well understood economic issues and focus instead on the political effects of centralization for fiscal programs with benefits broadly spread in the population such as redistributive transfer schemes social insurance and general government consumption centralization changes the coalition of voters who favor a large program in a direction that depends on the nature of the redistributive instrument for fiscal programs with localized benefits such as provision of local public goods centralization creates opportunities for rent seeking which increases the size of government

the relevance of a choice of auction format in a competitive environment we examine the relevance of an auction format in a competitive environment by comparing uniform and discriminatory price auctions with many bidders in a private values setting we show that if the number of objects for sale is small relative to the number of bidders then all equilibria of both auctions are approximately efficient and lead to approximately the same revenue when the number of objects for sale is proportional to the number of bidders then the particulars of the auction format matter all equilibria of the uniform auction are efficient while all of the equilibria of the discriminatory auction are inefficient the relative revenue rankings of the auction formats can go in either direction depending on the specifics of the environment these conclusions regarding the efficiency and revenue ranking are in contrast to the previous literature which focused on the case of independent information across agents

electoral competition and politician turnover abstract in this paper we analyze the selection by opportunistic parties of the candidates who run for election we consider a setting with incomplete but symmetric information about the candidates abilities in which electoral campaigns provide voters with additional information about candidates parties care only about selecting an appropriate candidate to win the election while voters elect the best candidate conditional on their information we first argue that in order to defeat an established very good candidate of its rival a party may favor a new candidate with highly uncertain ability rather than an established good candidate next we establish that the discrepancy between the objective of parties and the objective of the electorate leads to inefficient conservatism in the selection of candidates i e each party keeps its incumbents too often from the voters viewpoint

the downsian voter meets the ecological fallacy this paper presents evidence that voter participation does not depend on the probability that one vote is decisive an extensive summary of the empirical participation literature is provided which shows that most but not all studies have found that turnout in an electoral district is higher when the race is closer individual level vote regressions for the 1979 and 1980 canadian national elections are estimated using objective measures of closeness as opposed to self reported measures the main finding is that a citizen is no more likely to vote in a close election than in a lands lide election district level turnout regressions for the same elections are also estimated and a significant relation between closeness and turnout is observed this suggests that aggregation bias may generate a spurious closeness turnout relation in district level regressions

equilibrium bid functions for auctions with an uncertain number of bidders abstract the number of rivals may be unknown when a bidding strategy is formulated in an auction in a symmetric model with risk neutral bidders holding independent information we obtain explicit equilibrium bidding functions for first price and second price auctions with uncertainty about the number of rivals five auctions are revenue equivalent first price and second price auctions each with the number of bidders known or uncertain and english auctions

a representative consumer theory of the logit model the log it model is usually derived from a discrete choice approach with stoc hastic utilities it is shown here that the logit demand system may also be derived from the maximization of a deterministic entropy type utility the latter may be interpreted as the preference function of a representative consumer with variety seeking behavior this altern ative view suggests a generalization of the standard logit which allo ws total demand to be determined endogenously copyright 1988 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

revenue ranking of discriminatory and uniform auctions with an unknown number of bidders an important managerial question is the choice of the pricing rule we study whether this choice depends on the uncertainty about the number of participating bidders by comparing expected revenues under discriminatory and uniform pricing within an auction model with affiliated values stochastic number of bidders and linear bidding strategies we show that if uncertainty about the number of bidders is substantial then the discriminatory pricing generates higher expected revenues than the uniform pricing in particular the first price auction might generate higher revenues than the second price auction therefore uncertainty about the number of bidders is an important factor to consider when choosing the pricing rule we also study whether eliminating this uncertainty i e revealing the number of bidders is in the seller s interests and discuss the existence of an increasing symmetric equilibrium

the loser s curse and information aggregation in common value auctions we consider an auction in which k identical objects of unknown value are auctioned off to n bidders the k highest bidders get an object and pay the k 1st bid bidders receive a signal that provides information about the value of the object we characterize the unique symmetric equilibrium of this auction we then consider a sequence of auctions a r with n r bidders and k r objects we show that price converges in probability to the true value of the object if and only if both k r and n r k r i e both the number of objects and the number of bidders who do not receive an object go to infinity

the case for nil votes voter behavior under asymmetric information in compulsory and voluntary voting systems in an informational voting environment we study the impact of an explicit nil vote option on the ballot when some voters are uninformed and face the swing voters curse we postulate a simple model of strategic voting in which voters entertain heterogeneous thresholds on legitimacy of different voting actions we predict that introducing a nil vote option reduces the number of uninformed and invalid votes increasing expected welfare in both voluntary and compulsory voting we test our model in a pen and paper laboratory experiment and find that the predictions of the model hold in the data for both voting systems

tests for the consistency of three level nested logit models with utility maximization abstract this paper provides necessary conditions for testing the local consistency of three level nested logit models with random utility maximization we find that for a model with two sub nests per nest the conditions can lead to a substantial increase in the range of acceptable dissimilarity parameters irrespective of the number of alternatives per sub nest

what price accountability the lucas island model and the politics of monetary policy this paper develops a model of an electoral cycle in inflation and output based on rational inflation expectations and rational retrospective voting voters are heterogeneous and partially informed about aggregate macroeconomic variables they observe precisely how monetary policy stimulates their local economies but their observations of economic activity in other sectors are imprecise voters extract information about the incumbent policymaker s economic competence from cross sectoral spillover effects the incumbent has incentives to generate preelection monetary surprises that stimulate the local economies and generate cross sectoral spillover effects he thereby creates an impression of economic competence and furthers his reelection prospects his policy manipulations are the price of political accountability on a positive note the incumbent is more likely to survive voter scrutiny if he is more competent than the average political candidate

does education improve citizenship evidence from the united states and the united kingdom abstract many studies document an association between schooling and civic participation but none credibly investigate causal links we explore the effect of extra schooling induced through compulsory schooling laws on the likelihood of becoming politically involved in the united states and the united kingdom we find that educational attainment is related to several measures of political interest and involvement in both countries we find a strong and robust relationship between education and voting for the united states but not for the united kingdom our us results approach the uk findings when conditioning on registration possibly indicating that registration rules present a barrier to participation

the downsian model of electoral participation formal theory and empirical analysis of the constituency size effect this paper applies a game theoretic model of participation under uncertainty to investigate the negative relationship between constituency size and voter turnout rates theconstituency size effect we find that this theoretical model accounts for almost all of the variation in turnout due to size in cross sectional data from school budget referenda

alternative common value auction procedures revenue comparisons with free entry the logic of revenue comparisons for different types of common value auctions is substantially altered if the number of participants rather than being fixed responds endogenously to the expected profitability from participating in a thoroughly symmetric model a seller may prefer that competition be indirect an auction procedure in which fewer participants are needed to drive the expected profitability from participating down to the level obtainable in other auctions in the economy can attain higher expected revenue if a sale is sufficiently likely this insight allows a complete revenue ranking of standard auction procedures with endogenous entry

5 information impact and allocation rules in auctions with affiliated private values a laboratory study in affiliated private value auctions each bidder has perfect information regarding his her own value for the object at auction but higher values of the item for one bidder make higher values for other bidders more likely we report on a series of experiments examining three key implications of these auctions i in a first price auction public information about rivals values increases expected revenue ii an english auction increases expected revenue compared to a first price auction and iii a second price auction is isomorphic to an english auction in examining these issues we compare predictions of some ad hoc bidding models with nash equilibrium predictions in the first price auction experiments nash equilibrium bidding theory organizes the data better than either of two ad hoc bidding models public information about others valuations does increase average revenue but the increase in revenue is smaller and less reliable than predicted under risk neutral nash equilibrium bidding lower average revenue might be attributed to risk aversion while the high variability is attributed to a sizable frequency of individual bidding errors relative to the theory bidding theory precisely organizes english auction outcomes after a brief initial learning period the dominant strategy equilibrium does not organize second price auctions nearly as well as market prices persistently exceed predicted prices the difference between english and second price outcomes is attributed to effects of different information flows inherent in the structure of the two institutions on eliminating bidding errors revenue impacts of these two institutions relative to a first price auction are examined in light of observed bidding patterns

entry and competition effects in first price auctions theory and evidence from procurement auctions motivated by several interesting features of the highway mowing auction data from the texas department of transportation tdot we study three competing procurement auction models with endogenous entry our entry and bidding models provide several interesting implications for the first time we show that even within an independent private value paradigm as the number of potential bidders increases bidders equilibrium bidding behaviour can become less aggressive and the expected procurement cost may rise because the entry effect is always positive and may dominate the negative competition effect we then develop structural models of entry and bidding corresponding to the three models under consideration controlling for unobserved auction heterogeneity and use the recently developed semi parametric bayesian estimation method to analyse the data we select the model that best fits the data and use the corresponding structural estimates to quantify the entry effect and the competition effect with regard to the individual bids and the procurement cost copyright 2009 wiley blackwell

electoral thresholds as coordination devices this paper studies one person one vote parliamentary elections where voters care both about the winner of elections and about the composition of the parliament parties enter the parliament if and only if their vote share exceeds some predetermined threshold we show a that there generically exist equilibria in which all parties get a non degenerate vote share and perhaps more importantly b that the size of the electoral threshold acts as a coordination device which crucially affects the win prospects of the condorcet winner party in particular we argue that the win prospects of the condorcet winner party are decreasing in the size of the entry threshold

improving bid efficiency for humanitarian food aid procurement abstract the competitive bid process used by the us department of agriculture usda to procure food supplies and transportation services for humanitarian food aid is subject to bidder gaming that can increase prices and deter competition additionally suppliers and carriers are matched after bid submission preventing synergies from coordinated planning given these concerns we determine the optimal auction mechanism to minimize gaming then justify pre bid planning between suppliers and carriers using properties of the cost distribution functions we operationalize these changes with a uniform price auction the improved mechanism should deter gaming enhance bid participation and increase delivered food aid volumes

the economic model of voter participation a further test the central hypothesis of the economic model of voter participation was put to an empirical test it was found that the coefficient of population size which represents the subjective probability of affecting election results is negative and significant in municipal local elections but insignificant in national knesset elections therefore this variable is unable to represent subjective probability in the latter case

auctions with uncertain numbers of bidders abstract we investigate bidders and seller s responses to ambiguity about the number of bidders in the first price auction fpa and the second price auction spa with independent private valuations we model ambiguity aversion using the maxmin expected utility model we find that bidders prefer the number of bidders to be revealed in the fpa are indifferent between revealing and concealing in the spa and prefer the spa to the fpa if bidders are more pessimistic than the seller then the seller prefers to conceal the number of bidders in the fpa and prefers the fpa to the spa

information aggregation and strategic abstention in large laboratory elections this paper compares strategic abstention in ad hoc committees versus standing committees ad hoc committees meet only once and then dissolve while standing committees the central finding from this study is that most of the predictions of swing voter curse theory hold up in large elections conducted under controlled laboratory conditions there is significant abstention and significant balancing of partisans by uniformed voters and vote balancing increases with the partisan imbalance elections with no partisan imbalance successfully aggregate information and lead to efficient outcomes consistent with swing voter curse theory this efficiency falls off as partisan imbalance increases but to a significantly greater extent than is predicted in equilibrium it is instructive to compare these findings in large elections with results from the elections reported in battaglini et al 2007 all of the qualitative results are the same concerning the comparative statics balancing and abstention one slight difference is that there was less irrational voting for in the small elections than in the large elections except for the 5 9 m 0 treatment where we observed 20 voting for in the small elections compared with 10 voting for in the large elections these differences were reflected in slightly different efficiency results between small and large elections with the comparisons mirroring the differences in voting for more irrational voting results in lower e ciency we conclude that this scaled up study successfully replicates the initial swing voter s curse experiment reported in battaglini et al 2007 obtaining very similar findings in laboratory committees that are three times the size of those in the original study the one caveat is that we found evidence of a slight increase in irrational nonequilibrium behavior voting for in the larger elections whether this trend would continue as election size is further scaled up is an open question a swing voter s curse environment

on optimal reservation prices in auctions the theory of auction design examines how various factors affect the outcome of an auction most of the existing literature focuses on how varying the amount of information available to each bidder affects the bid taker s expected revenue when all other factors remain constant this paper studies how the bid taker s expected revenue varies with changes in the auction format when such changes affect the number of bidders and in turn the bidders maximum value for the object being sold specifically we examine how varying the reservation price or screening level affects the bid taker s expected revenue though its effect on the number of bidders for two simple examples the losses associated with a reduced number of bidders outweighs any benefits that nontrivial reservation prices might have had in models with an exogonously set number of bidders

how the electoral college influences campaigns and policy the probability of being florida this paper analyzes how us presidential candidates should allocate resources across states to maximize the probability of winning the election by developing and estimating a probabilistic voting model of political competition under the electoral college system actual campaigns act in close agreement with the model there is a 0 9 correlation between equilibrium and actual presidential campaign visits across states both in 2000 and 2004 the paper shows how presidential candidate attention is affected by the states number of electoral votes forecasted state election outcomes and forecast uncertainty it also analyzes the effects of a direct national popular vote for president

the breakup of nations a political economy analysis this paper develops a model of the breakup or unification of nations in each nation the decision to separate is taken by majority voting a basic trade off between the efficiency gains of unification and the costs in terms of loss of control on political decisions is highlighted the model emphasizes political conflicts over redistribution policies the main results of the paper are i when income distributions vary across regions and the efficiency gains from unification are small separation occurs in equilibrium and ii when all factors of production are perfectly mobile all incentives for separation disappear i introduction following the demise of communism the entire map of europe from the atlantic coast to the urals is being redrawn and issues of separation unification and the redrawing of borders are yet again at the forefront of european concerns many of the issues raised by this process are primarily of a political cultural or linguistic nature however there are also economic considerations that bear on this problem the objective of this paper is to analyze some important economic and political determinants of the process of unification and separation of democratic nations the starting point of our analysis is to suppose that from an economic efficiency point of view separation of nations is never desirable a unified nation is always more efficient since free trade among regions is guaranteed duplication costs in defense and law enforcement are avoided and local public goods provision such as transportation and communication networks or common standards can be coordinated furthermore any benefits of decentralization that might be obtained in a world with several nations may also be achieved within a unified nation by replicating the administrative structure of the world with several

advertising effects in presidential elections presidential elections provide both an important context in which to study advertising and a setting that mitigates the challenges of dynamics and endogeneity we use the 2000 and 2004 general elections to analyze the effect of market level advertising on county level vote shares the results indicate significant positive effects of advertising exposures both instrumental variables and fixed effects alter the ad coefficient advertising elasticities are smaller than are typical for branded goods yet significant enough to shift election outcomes for example if advertising were set to zero and all other factors held constant three states electoral votes would have changed parties in 2000 given the narrow margin of victory in 2000 this shift would have resulted in a different president

rational expectations information acquisition and competitive bidding most rational expectations market equilibrium models are not models of price formation and naive mechanisms leading to such equilibria can be severely manipulable in this paper a bidding model is developed which has the market like features that bidders act as price takers and that prices convey information higher equilibrium prices convey more favorable information about the quality of the objects being sold than do lower prices bidders can benefit from trading only if they have a transactions motive or if they have access to inside information apart from exceptional cases prices are not fully revealing a two stage model is developed in which bidders may acquire information at a cost before bidding and for which the equilibrium price is fully revealing resolving a well known paradox

public protests and policy making technological advances and the development of social media have made petitions public protests and other form of spontaneous activism increasingly common tools for individuals to influence decision makers to study these phenomena in this article i present a theory of petitions and public protests that explores their limits as mechanisms to aggregate information the key assumption is that valuable information is dispersed among citizens through petitions and protests citizens can signal their private information to the policy maker who can then choose to use it or not i first show that if citizens individual signals are not sufficiently precise information aggregation is impossible no matter how large is the population of informed citizens even if the conflict with the policy maker is small i then characterize the conditions on conflict and the signal structure that guarantee information aggregation when these conditions are satisfied i show that full information aggregation is possible as the population grows to infinity when they are not satisfied i show that information aggregation may still be possible if social media are available

patents and cumulative innovation causal evidence from the courts cumulative innovation is central to economic growth do patent rights facilitate or impede such follow on innovation this paper studies the effect of removing patent protection through court invalidation on the subsequent research related to the focal patent as measured by later citations we exploit random allocation of judges at the u s court of appeal for the federal circuit to control for the endogeneity of patent invalidation we find that patent invalidation leads to a 50 percent increase in subsequent citations to the focal patent on average but the impact is highly heterogeneous patent rights appear to block follow on innovation only in the technology fields of computers electronics and medical instruments moreover the effect is entirely driven by invalidation of patents owned by large patentees that triggers entry of small innovators suggesting that patents may impede the democratization of innovation

elections with privately informed parties and voters this paper studies a situation in which parties are betterinformed than voters about the optimal policies for voters weshow that voters are able to infer the parties information byobserving their electoral positions even if parties have policypreferences which differ substantially from the median voter s unlike previous work that reach opposite conclusions we assumethat voters have some private information of their own if theinformation available to voters is biased parties attempts toinfluence voters beliefs will result in less than fullconvergence even if parties know with certainty the optimalpolicy for the median voter

the rational behavior theory of voting participation evidence from the 1970 and 1982 elections in recent years a substantial literature on the determinants of voting participation has been developed in many of these studies voting is assumed to be an expression of rational behavior that is people vote when they expect that the benefits will exceed the related costs voting is largely an act of consumption based upon the widely held belief that one should vote to fulfill a civic duty or upon some combination of personal characteristics which is sufficiently vague to make precise measurement impossible the rational behavior theory however holds that voting is influenced at the margin by personal and environmental factors which incrementally affect expected benefits and costs making the act of voting more or less rational those factors which increase expected benefits will ceteris paribus enhance the probability that one will vote those factors which increase expected costs will of course have the opposite effect this study is presented as a primarily empirical contribution to the literature which assumes that since voting is an expression of rational behavior it can be modeled and tested using standard economic analysis and methodology

bayesian learning in social networks we study the perfect bayesian equilibrium of a sequential learning model over a general social network each individual receives a signal about the underlying state of the world observes the past actions of a stochastically generated neighbourhood of individuals and chooses one of two possible actions the stochastic process generating the neighbourhoods defines the network topology we characterize pure strategy equilibria for arbitrary stochastic and deterministic social networks and characterize the conditions under which there will be asymptotic learning convergence in probability to the right action as the social network becomes large we show that when private beliefs are unbounded meaning that the implied likelihood ratios are unbounded there will be asymptotic learning as long as there is some minimal amount of expansion in observations we also characterize conditions under which there will be asymptotic learning when private beliefs are bounded

continuous decisions by a committee median versus average mechanisms abstract a group of strategic agents with diverse private information and interdependent preferences has to take a continuous collective decision i study the design of the decision making procedure from the viewpoint of a utilitarian social planner for uniformly distributed information the implementation of the average report as decision dominates the implementation of the median report when the set of admissible reports is optimally designed this is true for any number of agents and for any degree of interdependence the result extends to a general class of distributions when the number of agents is large

collective action with uncertain payoffs coordination public signals and punishment dilemmas how can one analyze collective action in protests or revolutions when individuals are uncertain about the relative payoffs of the status quo and revolution we model a calculus of protest of individuals who must either submit to the status quo or support revolt based only on personal information about their payoffs in deciding whether to revolt the citizen must infer both the benefit of successful revolution and the likely actions of other citizens we characterize conditions under which payoff uncertainty overturns conventional wisdom a when a citizen is too willing to revolt he reduces the incentives of others to revolt b less accurate information about the value of revolution can make revolt more likely c public signals from other citizens can reduce the likelihood of revolt d harsher punishment can increase the incidence of punishment and e the incidence of protest can be positively correlated with that of repression

get out the costly vote institutional design for greater participation institutions designed to increase turnout appeal to democratic sentiments but are highly debated as they entail two potentially countervailing eects while generating more pieces of information they may decrease the average voter s information quality we examine two commonly discussed institutions inducing participation abstention penalties used in 32 countries around the world and lotteries providing a prize to one randomly chosen participant as proposed on the 2006 arizona ballot we analyze a benchmark rational choice model in which voters vary in their information quality and participation is costly we illustrate that both institutions can improve collective outcomes though lotteries are a more eective instrument asymptotically in an array of lab experiments we empirically assess institutional performance we nd strong evidence for selective participation lab voters participate more when better informed or when institutionally induced however because subjects vote more often than the equilibrium predictions these institutions entail less welfare benets than theory prescribes lotteries do fare better than nes suggesting that they may be a useful alternative to commonly used compulsory

the economics of missing markets information and games part 1 out of equilibrium beliefs and out of equilibrium behaviour david m kreps the role of common knowledge assumptions in game theory adam brandenburger and eddie dekel repeated games a survey h sabourian information dynamics and equilibrium frank hahn part 2 the economics of parallel research partha dasgupta strategy variables and theories of industrial organization christopher doyle bargaining theory david canning imperfect competition and international trade k gatsios part 3 missing markets consequences and remedies david m newberry rational expectations information and asset markets margaret bray decision making in the presence of risk mark j machina part 4 theoretical modelling of banks and bank runs luca anderlini optimal multi unit auctions eric maskin and john riley labour contract theory tim worrall part 5 intertemporal general equilibrium models timothy j kehoe sunspots stephen burnell an introduction to nonlinear dynamics and its application to economics david kelsey part 6 some micro and macro implications of inventories j p thomas keynes s liquidity preference theory a suggested reinterpretation louis makowski

the option to wait in collective decisions and optimal majority rules abstract we consider a model in which voters over time receive more information about their preferences concerning an irreversible social decision voters can either implement the project in the first period or they can postpone the decision to the second period we analyze the effects of different majority rules individual first period voting behavior may become less conservative under supermajority rules and it is even possible that a project is implemented in the first period under a supermajority rule that would not be implemented under simple majority rule we characterize the optimal majority rule which is a supermajority rule in contrast to individual investment problems society may be better off if the option to postpone the decision did not exist these results are qualitatively robust to natural generalizations of our model

testing the consistency of nested logit models with utility maximization abstract this paper provides simple necessary conditions for testing the local consistency of nested logit models with stochastic utility maximization a graphical analysis illustrates the extent to which these conditions extend the range of admissible dissimilarity coefficients beyond the unit interval

the marginal voter s curse an intuitive explanation for voter abstention is that a voter is uncertain which policy or candidate to vote for and so defers to the rest of the electorate to make the decision in majoritarian elections this has been formally modelled as a strategic response to the swing voter s curse which arises because the rare event of a pivotal vote conveys substantial information in electoral systems other than majority rule however the standard pivotal voting calculus may not apply this paper analyzes one such system namely proportional representation where additional votes continue to push the policy outcome in one direction or the other a new strategic incentive for abstention arises in that case to avoid the marginal voter s curse of pushing the policy outcome in the wrong direction intuitively conditioning on the rare event of a pivotal vote might seem to have a greater impact on behavior but the marginal voter s curse actually presents a larger disincentive for voting than the swing voter s curse this and other predictions of the model are con rmed empirically by a series of laboratory experiments

politics information and the urban bias abstract governments in many ldcs skew public resources towards urban sectors despite a majority of citizens residing in rural areas this paper develops a novel political argument for this urban bias phenomenon in a framework where all voters rural and urban have equal voice but differ in their access to information we argue that this difference is sufficient to give governments an incentive to inefficiently over allocate resources towards urban areas the bias is shown to worsen during adverse economic times leading to increased migration we also examine how voter informativeness affects efficiency of the electoral process in weeding out incompetent governments

on the theory of strategic voting many analyses of plurality rule elections predict the complete coor dination of strategic voting and hence support for only two candidates here i suggest that stable multi candidate support will arise in equilibrium a group of voters must partially coordinate behind one of two challenging candidates in order to dislodge a disliked incumbent in a departure from existing models the popular support for each challenger is uncertain this support must be inferred from the private observation of informative signals such as the social communication of pref erences throughout the electorate or the imperfect observation of opinion polls the uniquely stable voting equilibrium entails only limited strategic voting and hence incomplete coordination this is due to the surprising presence of negative feed back an increase in the degree of strategic voting by others reduces the incentives for an individual to vote strategically the incentive to vote strategically is lower in relatively marginal elections after controlling for the distance from contention of a trailing preferred challenger a calibration of the model applied to the uk general election of 1997 is consistent with the impact of strategic voting and the reported accuracy of voters understanding of the electoral situation it suggests that nearly 50 seats may have been lost by the conservative party due to strategic voting 1 plurality rule elections and strategic voting 1 1 strategic voting and duverger s law plurality rule elections where the winner is the candidate who receives the largest number of votes are vulnerable to strategic voting a voter might well switch away from her preferred candidate and toward a perceived leader in the hope of exerting a greater influence over the outcome of the election this phenomenon has long been the focus of both economic and political scientific study in an influential essay riker 1982b cited droop s 1871 eloquent exposition of the strategic voting problem 1 i oer my grateful thanks to the many friends colleagues seminar participants referees and editors who have oered insightful comments during the long gestation of this paper its antecedents and companion work special thanks go to steve fisher whose empirical analysis of strategic voting raised many of the questions that i seek to answer in this paper and to chris wallace this particular paper brings together much of the analysis previously circulated in the papers a new theory of strategic voting strategic voting under the qualified majority rule and idiosyncrasy information and the impact of strategic voting

choosing not to choose on the link between information and abstention abstract we use a dataset that allows us to circumvent a number of estimation difficulties that have plagued previous studies of the relationship between information and abstention our results show that information is a major determinant of abstention

is political rivalry an incentive to vote according to the theory of the rational voter s behavior riker and ordeshook 1968 the decision to vote depends among other things on the expected effectiveness of his vote to bring to power his preferred candidate or party though this hypothesis is valid in the case of a two party political system in the case of a multi party system one has to take into consideration the influence of the competition2 between parties upon the vote s efficiency and on the distribution of the votes among parties3 in a multi party system quite often no one party is in a position to win an overal majority and the result is a governmental coalition therefore the voter is in more doubt about the effectiveness of his vote for a given number of parties the closer the outcome of the election the more likely people would be to vote see tullock 1972 110 an increase in the number of parties might be considered as contributing to a better representation of the electorate s preferences and therefore as an incentive to vote on the other hand when parties become too numerous there could be a weakening of power among them and that in turn would cancel out the incentive to vote therefore an optimal degree of competition encouraging electoral participation as shown in figure 1 must exist4 this paper will concentrate on the assessment of the explanatory power of the competition among parties upon the rate of electoral participation it should however not be overlooked that in practice there are many factors of an institutional as well as of a psychological nature which prevent such an ideal balance being attained factors affecting the voter s behavior such as compulsory participation tend to reduce considerably the margin between the expected benefit from voting and the costs the development of efficient lobbies considered by the voter to be more likely to support his preferences in parliament tend to reduce the

design of discrete dutch auctions with consideration of time abstract as a departure from much of the existing literature that aims at maximizing the expected revenue from a single auction this research work is concerned with the design of discrete dutch auctions to achieve the optimal balance between the selling price of the object and the auction duration so that the auctioneer s expected revenue per unit of time is as high as possible the new objective is especially important in trading perishable products or services when multiple auctions are to be conducted by the auctioneer for different sellers during a limited period of time our findings indicate that the proposed discrete dutch auction models generate higher average revenues per unit of time for the auctioneer than their counterparts without consideration of time this is achieved by reducing the duration of each auction in exchange for more auctions to be held within the given time frame so that the small decrease in the revenues from the longer auctions is more than compensated for by the large increase in the total revenues from the shorter auctions the numerical results show that the proposed discrete dutch auction design becomes extremely useful when the number of bidders becomes large it is also shown that complete knowledge about the number of bidders in the auction results in a higher auctioneer s expected revenue per unit of time

information aggregation in polls we study information transmission via polling a policymaker polls constitu ents who differ in their information and ideology to determine policy full rev elation is an equilibrium in a poll with a small sample but not with a large one in large polls full information aggregation can arise in an equilibrium where constituents endogenously sort themselves into centrists who respond truth fully and extremists who do not we find polling statistics that ignore strate gic behavior yield biased estimators and mischaracterize the polvs margin of error we construct estimators that account for strategic behavior finally we compare polls and elections jel c42 d83

rational choice theory and the paradox of not voting at least since downs s 1957 seminal work an economic theory of democracy rational choice theorists have appreciated the paradox of not voting in a large election the probability that an individual vote might change the election outcome is vanishingly small if each person only votes for the purpose of influencing the election outcome then even a small cost to vote like a minor schedule conflict or mildly bad weather should dissuade anyone from voting yet it seems that many people will put up with long lines daunting registration requirements and even the threat of physical violence or arrest in order to vote given the central place of voting within political economy the lack of an adequate rational choice model of large elections with costly voting presents an obvious problem for the most part theorists have bypassed the turnout problem either by eliminating voters as strategic actors or by assuming that the decision to vote is independent of other strategic choices the problem with the first approach is that the empirical literature on voting behavior provides considerable evidence of apparently strategic behavior in primary elections there is evidence that voters condition their vote choice on the viability of candidates abramson aldrich paolino and rohde 1992 in a seminal and comprehensive study cox 1997 shows that voting patterns and election outcomes are broadly consistent with patterns of behavior predicted by strategic voting models for example under plurality rule in which the candidate with the most votes wins the election

modeling competitive bidding a critical essay in analyzing bidding modeling matters this paper is a critical analysis of the models available to aid competitive bidding decision making bidding strategy and auction design in real transactions after an introductory overview this paper describes the contexts in which auctions arise reviews the mainstream theory of single isolated auctions and discusses the important work involved in enrichment of this theory in doing so it indicates results that have been obtained and the sort of changes in analytical approach that are needed to tackle other critical enrichments the paper summarizes briefly what is known about the direct use of models by bidders and auction designers a general theme of this paper is that enriched models are needed to bring bidding theory closer to direct applicability in decision making

strategic voting over strategic proposals prior research on strategic voting has reached the conclusion that unanimity rule is uniquely bad it results in destruction of information and hence makes voters worse off we show that this conclusion depends critically on the assumption that the issue being voted on is exogenous that is independent of the voting rule used we depart from the existing literature by endogenizing the proposal that is put to a vote and establish that under many circumstances unanimity rule makes voters better off moreover in some cases unanimity rule also makes the proposer better off even when he has diametrically opposing preferences in this case unanimity is the pareto dominant voting rule voters prefer unanimity rule because it induces the proposing individual to make a more attractive proposal the proposing individual prefers unanimity rule because the acceptance probabilities for moderate proposals are higher we apply our results to jury trials and debt restructuring

unequal participation democracy s unresolved dilemma presidential address american political science association 1996 low voter turnout is a serious democratic problem for five reasons 1 it means unequal turnout that is systematically biased against less well to do citizens 2 unequal turnout spells unequal political influence 3 u s voter turnout is especially low but measured as percent of voting age population it is also relatively low in most other countries 4 turnout in midterm regional local and supranational elections less salient but by no means unimportant elections tends to be especially poor 5 turnout appears to be declining everywhere the problem of inequality can be solved by institutional mechanisms that maximize turnout one option is the combination of voter friendly registration rules proportional representation infrequent elections weekend voting and holding less salient elections concurrently with the most important national elections the other option which can maximize turnout by itself is compulsory voting its advantages far outweigh the normative and practical objections to it

some evidence on the winner s curse comment the theory of auctions has developed extensively since robert b wilson s 1977 seminal paper due to the complexity of equilibrium strategies however empirical researchers have been slow to incorporate and test the most basic theoretical precepts typical empirical studies estimate ad hoc bidding models with no attempt to ascertain whether the implied behaviors are theoretically plausible the recent paper by stuart e thiel 1988 attempts to bridge this gap thiel obtains closed form equilibrium bidding functions that are theoretically motivated and linear in parameters and which facilitate empirical estimation and testing if widely applicable thiel s empirical approach would constitute a major methodological breakthrough unfortunately thiel s approach applies only in special cases that are of limited practical interest linear bidding strategies emerge only under circumstances that are unlikely in the real world the limited range of thiel s approach may not be apparent to casual readers of his paper even when linear strategies do exist they are not unique under the special assumptions of thiel s model for each nash equilibrium in linear strategies there exists a related family of nonlinear strategies thus further justification must be found for basing empirical research on the linear specification we also note a significant error in thiel s work the symmetric strategies he derives on the basis of order statistics do not constitute a nash equilibrium we derive proper expressions for the symmetric nash strategies and discuss a specification error in thiel s regression analysis that would account for the mixed results obtained in his application to the highway construction industry

parties as political intermediaries this paper argues that parties regulate competition among like minded factions so as to enhance reputation building by and voter trust in the politicians standing for a given cause while intra and interparty competition contributes to keeping politicians on their toes unbridled competition may encourage politicians to challenge good platforms and to wage competition along socially suboptimal dimensions for example by privileging form over content the paper builds a simple model of intraparty competition and studies whether various hierarchical or democratic party institutions constitute an efe cient form of party governance the paper shows that intraparty disagreements when they occur hurt the party s position in the general election but that their possibility enhances party image and that parties must be able to avoid behind the scene allocations of portfolios and spoils in order to be credible last it analyzes the impact of political polarization and interparty competition on the choice of party governance

the swing voter s curse the authors analyze two candidate elections in which some voters are uncertain about the realization of a state variable that affects the utility of all voters they demonstrate the existence of a swing voter s curse less informed indifferent voters strictly prefer to abstain rather than vote for either candidate even when voting is costless the swing voter s curse leads to the equilibrium result that a substantial fraction of the electorate will abstain even though all abstainers strictly prefer voting for one candidate over voting for another copyright 1996 by american economic association

ignorance and bias in collective decisions we study theoretically and experimentally a committee with common interests committee members do not know which of two alternatives is the best but each member can acquire privately a costly signal before casting a vote under either majority or unanimity rule in the experiment as predicted by bayesian equilibrium voters are more likely to acquire information under majority rule and attempt to counter the bias in favor of one alternative under unanimity rule as opposed to bayesian equilibrium predictions however many committee members vote when uninformed moreover uninformed voting is strongly associated with a lower propensity to acquire information we show that an equilibrium model of subjective prior beliefs can account for both these phenomena and provides a good overall fit to the observed patterns of behavior both in terms of rational ignorance and biases

political rents and voter information in search equilibrium abstract political parties committed to grab rents may run for election and even win if citizens are uninformed but how is the political equilibrium affected if citizens can mitigate this information problem through costly information search we propose a political equilibrium theory with endogenous information search and turnout we show that i the political equilibrium generates political uncertainty characterized by a distribution of rent policies i i the expectation of this rent distribution is inversely u shaped in the information search cost i i i turnout is lower and rents are higher the more proportional is the electoral system

voting inequality and redistribution this paper surveys models of voting on redistribution under reason able assumptions the baseline model produces an equilibrium with the extent of redistributive taxation chosen by the median income earner if the median is poorer than average redistribution is from rich to poor and increasing inequality increases redistribution however under different assumptions about the economic environment redistribution may not be simply rich to poor and inequality need not increase redistribution several lines of argument are presented in particular political participation public provision of private goods public pensions and tax avoidance or evasion

searching for leviathan an empirical study in several papers and a recent book geoffrey brennan and james buchanan 1977 1978 1980 have put forth a striking and controversial view of the public sector drawing by analogy on the conventional theory of monopoly in the private sector they envision a monolithic government that systematically seeks to exploit its citizenry through the maximization of the tax revenues that it extracts from the economy from this perspective they develop a fiscal constitution whose central purpose is to constrain leviathan by limiting in various ways its access to tax and other fiscal instruments while the leviathan hypothesis has been the source of lively debate and a wide range of policy proposals it has not been the subject of much systematic empirical work or testing this is a matter of some importance since the policy implications of the leviathan view are disturbing to put it mildly in particular brennan and buchanan virtually stand on their heads many of the basic theorems in public finance for an efficient and equitable tax system if in fact the leviathan view is an inaccurate depiction of the functioning of the public sector the introduction of their policy proposals is likely to make a sorry mess of the fiscal system the leviathan model does however have some straightforward implications for observable fiscal behavior it is the purpose of this paper to examine one of these testable implications brennan and buchanan stress that fiscal decentralization is itself a powerful constraint on leviathan competition among governments in the context of the interjurisdictional mobility of persons in pursuit of fiscal gains can offer partial or possibly complete substitutes for explicit fiscal constraints on the taxing power 1980 p 184 such competition among governments in a federal system that places heavy reliance on local fiscal decisions will greatly limit the capacity of leviathan to channel resources into the public sector in short as indicated by the epigraph to this paper the leviathan model implies that other things equal the size of the public sector should vary inversely with the extent of fiscal decentralization 2

voter participation and the redistributive state the redistributive theory of the state implies that voter participation rates should be highest among those who have the most to gain or lose or a v shaped relationship between income and voting participation should exist we use a data set that contains nearly 21 000 observations on individual survey responses about voting behavior in the u s between 1972 and 1993 to show that the participation rate generally rises monotonically with income perhaps except at very high income levels it does report other findings consistent with an economic theory of voting based on returns to association and with the hypothesis that public employees vote more