information on strikes and union settlements patterns of coverage in a newspaper of record the authors investigate whether the new york times coverage of strikes and non strike wage settlements in large bargaining units changed during the 1980s a time when a transformation of industrial relations is said to have taken place although the total number of new york times articles on such events declined during the 1980s the authors find that when appropriate control variables are included in the analysis the apparent drop in coverage disappears important variables determining the extent of news coverage were occurrence of a strike strike duration number of workers involved occurrence of federal intervention key industry status that is whether the affected industry was among those industries identified as exceptionally important for wage setting and proximity to new york city they speculate that the reduced number of articles may simply reflect a decreased incidence of strikes

strength in numbers group size and political mobilization abstract an important result in interest group theory and political economy is that small groups are more influential than their size would lead us to expect in this study we document that the opposite holds for political mobilization citizens are more likely to participate in elections if they belong to large groups we present evidence that both the absolute size of groups and their population share influence individual participation decisions the link between group size and political mobilization is in part due to the structure of media markets candidates find it easier to direct campaign messages at larger groups because many existing media outlets cater to them

a direct mechanism characterization of sequential bargaining with one sided incomplete information we characterize the sequential equilibria of a class of infinite horizon bargaining games with one sided incomplete information when the seller the uninformed party makes all the offers we prove a folk theorem every incentive compatible individually rational direct bargaining mechanism is implementable by sequential equilibria introducing buyer counteroffers eliminates outcomes which are unfavorable to that party as the proportion of buyer offers increases the set of implementable mechanisms shrinks continuously when the proportion reaches one only the single outcome most favorable to the buyer remains thus depending on the offer structure sequentiality may or may not impose restrictions beyond static incentive compatibility

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

voting and nonvoting a multi election perspective prior attempts to differentiate between voters and nonvoters have focused on a single election the implicit assumption being that voting or not voting in a particular election is indicative of a more general proclivity this paper tests the impact of a number of factors that have emerged in earlier studies as predictors ofvoting participation but uses participation over a series of 10 elections as the criterion the model tested here demonstrates greater explanatory power than those previously tested and follow up analysis strongly suggests that this explanatory power is a function of the multi election measurement of participation

redistribution income and voting a model that reconciles the positive association between income and voting found in cross sectional studies with the negative correlation between income and turnout over time is developed voting is modeled as a group rational activity voter turnout rates in the united states for the 1948 1960 1968 and 1980 elections are used to test the model voter turnout is found first to fall and then to rise as families move up the income distribution voter turnout also rises as real wages fall as educational attainment increases as elections become closer and as poll taxes and literacy tests are removed

durable goods monopolists durable goods monopolists face special problems because the sale of their products creates a secondhand market not controlled by the monopolist to the extent the monopolist is able to rent his product rather than sell it or to make binding promises about his future production such problems are ameliorated given the inability to do the above the monopolist is led to producing goods less durable than those produced by either competitive firms or monopolist returns a reverse averch johnson result that monopolist sellers may invest less in fixed costs including plant modernization and research and development than would the renters is shown it is also shown that even though sellers have less monopoly power than renters and nondurable goods monopolists it is possible that the seller will cause a greater deadweight loss than the other types of monopolies

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

unions and strikes with asymmetric information strikes seem to be a pareto inefficient outcome of bargaining between a union and a firm however this paper shows that strikes can be the outcome of rational behavior by both agents if the firm has more information than the union concerning the state of nature the union can use strikes as a way of gaining information the paper uses an asymmetric information model where the firm has information about the state i e profitability that the union does not know the schedule of wage offers by the union then depends on the probability that a given state will occur

the nonvoting voter in voting research postelection surveys consistently overestimate voter turnout by a substantial margin this paper compares via discriminant analysis of data from the 1978 national election study the characteristics of respondents who falsely claim to have voted with the characteristics of actual voters and admitted nonvoters more importantly it undertakes two parallel analyses of the factors affecting voting or nonvoting the first employs respondent supplied voting data and the second employs officially validated voting data even though misreporters differ in some respects from actual voters and admitted nonvoters the parallel analyses in the latter part of the paper indicate that substantive conclusions about the factors that influence voting or nonvoting are largely unaffected by the use of validated as opposed to reported voting data

bargaining and strikes strikes are generally regarded as an important economic phenomenon and yet good theoretical explanations of them are hard to come by the difficulty is to understand why rational parties should resort to a wasteful mechanism as a way of distributing the gains from trade why could not both parties be made better off by moving to the final distribution of surplus immediately or if it is uncertain to its certainty equivalent and sharing the benefits from increased production

black hole tariffs and endogenous policy theory political economy in general equilibrium preface acknowledgments list of results 1 a preview of the results 2 endogenous policy theory a diagrammatic approach part i endogenous policy theory with specific factors the theory of industry tariffs in partial equilibrium 3 the probabilistic voting model of political efficiency and powerless politicians 4 endogenous lobbying theory and the contribution specialization theorem 5 endogenous tariff theory 6 the power function model of endogenous industry lobbying 7 three simple tests of the stolper samuelson theorem 8 the invisible foot and the waste of nations lawyers as negative externalities part ii endogenous policy theory in general equilibrium a long run theory of national tariff levels 9 the 2 x 2 x 2 x 2 model of endogenous redistribution theory 10 a prisoner s dilemma theory of endogenous protection the leontief model 11 the compensation effect and the multiple equilibrium trap 12 increasing returns to politics and factor endowments economic development and brazilian vitality versus the indian disease 13 endogenous protection in the united states 1900 88 14 a cobb douglas model 15 black hole tariffs 16 the endowment effect cross national evidence on endogenous tariffs part ii postscript 17 the senile industry argument for protection 18 optimal obfuscation and the theory of the second worst the politically efficient policy mathematical appendices references author index subject index

an economic model of representative democracy this paper develops an approach to the study of democratic policy making where politicians are selected by the people from those citizens who present themselves as candidates for public office the approach has a number of attractive features first it is a conceptualization of a pure form of representative democracy in which government is by as well as of the people second the model is analytically tractable being able to handle multidimensional issue and policy spaces very naturally third it provides a vehicle for answering normative questions about the performance of representative democracy

structure behavior and voter turnout in the united states electoral participation in the united states is examined to provide a clearer account of the effect of the registration requirement on individual voting behavior pooling nes data from 1980 1984 and 1988 i first model with traditional and selection bias techniques the full electorate to distinguish among three groups nonregistrants registered nonvoters and voters analyses limited to recent movers then reported to understand more fully the forces associated with the actual decision calculi of registering and voting the influences of many factors commonly accepted as important determinants of voting are disentangled and their effect at each stage is ascertained factors yielding inconsistent effects in previ research or believed to be unimportant such as race gender attitudes toward the candidates and trust government are shown to deserve closer scrutiny by electoral scholars

testing economic theories of voter behaviour using micro data three hypotheses often encountered in economic analyses of voter behaviour are tested using an extensive data set derived from six consecutive national election studies in the netherlands in the period 1971 1986 these hypotheses are i the party choice and turnout decisions are taken sequentially and independently by voters ii social gorups play a central role in the decisionmaking processes in the political sphere iii the effect of individual level variables on party choice is stable over time the results provide support for the first hypothesis and partial support for the second where the specific categorization of individuals to be chosen is a matter that needs further investigation the third hypothesis is rejected by the data the relationship between the variables chosen and party choice proved to be unstable

foundations of dynamic monopoly and the coase conjecture subgame perfect equilibria are characterized for a market in which the seller quotes a price each period assume zero costs positive interest rate continuum of buyers and some technical conditions if buyers valuations are positive then equilibrium is unique buyers strategies are stationary and the price sequence is determinant along the equilibrium path but possibly randomized elsewhere otherwise a continuum of stationary equilibria can exist but at most one with analytic strategies coase s conjecture is verified for stationary strategies reducing the period length drives all prices to zero or the least valuation connections to bargaining models are described journal qf economic literature classification

biased perceptions of income distribution and preferences for redistribution evidence from a survey experiment abstract individual perceptions of income distribution play a vital role in political economy and public finance models yet there is little evidence regarding their origins or accuracy this study examines how individuals form these perceptions and explores their potential impact on preferences for redistribution a tailored household survey provides original evidence on systematic biases in individuals evaluations of their own relative position in the income distribution the study discusses one of the mechanisms that may generate such biases based on the extrapolation of information from endogenous reference groups and presents some suggestive evidence that this mechanism has significant explanatory power the impact of these biased perceptions on attitudes toward redistributive policies is studied by means of an experimental design that was incorporated into the survey which provided consistent information on the own ranking within the income distribution to a randomly selected group of respondents the evidence suggests that those who had overestimated their relative position and thought that they were relatively richer than they were tend to demand higher levels of redistribution when informed of their true ranking

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

cliometrics 1971 1986 a survey the paper selectively surveys recent quantitative work in economic history with special emphasis on research into unemployment in interwar britain the habakkuk controversy the kuznets curve the demographic transition and heights in history it is shown that the field has advanced well beyond the routine applications of elementary microeconomics which characterized its early days considerably greater quantitative sophistication and a much wider coverage of historical issues have been notable features of this advance it is argued that econometric methods need to be supplemented in historical work by other forms of evidence to obtain persuasive answers to historical questions

entrepreneurship social mobility and income redistribution in south india development economists have been preoccupied with the problem of increasing the size of the gnp pie to the relative neglect of its distribution despite the recent disenchantment with the viewpoint that all classes share in the benefits of industrial growth empirical data on the distribution of income business opportunity and economic power are in short supply many of the studies on entrepreneurship and economic development when they are not apologetics for ruthless capitalist exploitation as paul baran suggests extol the achievements of the capitalist entrepreneur without examining class origins and monopoly advantage joseph schumpeter sees entrepreneurs irrespective of class origin as heroic figures with the dream and will to found a private kingdom to conquer adversity to achieve success for its own sake and to experience the joy of creation for gustav papanek 1967 the private entrepreneur who is frugal diligent far sighted remarkably able and willing to take political risks is in large part responsible for the success of pakistan in achieving rapid industrialization

closeness expenditures and turnout in the 1982 u s house elections students of elections have repeatedly found that the closeness of an election is modestly correlated with turnout this may be due to a direct response of instrumentally motivated voters but recent theoretical work casts doubt on the adequacy of this explanation another possibility is that elite actors respond to closeness with greater effort at mobilization we explore the latter possibility by using fec and state data on campaign expenditures in house senate and gubernatorial races our results indicate that closeness has an effect at both the mass and elite levels we also provide quantitative estimates of the effect of senate and gubernatorial expenditure on house turnout

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

demand for environmental goods evidence from voting patterns on california initiatives this article studies voting behavior on 16 environmental ballot propositions in california in order to characterize the demand for environmental goods the environment is found to be a normal good for people with mean incomes but some environmental goods are inferior for those with high incomes at least when supplied collectively an important price of environmental goods is reduced income in the construction farming forestry and manufacturing industries income and price can explain most of the variation in voting there is little need to introduce preference variables such as political ideology

the effect of newspaper entry and exit on electoral politics we use new data on entries and exits of us daily newspapers from 1869 to 2004 to estimate effects on political participation party vote shares and electoral competitiveness our identification strategy exploits the precise timing of these events and allows for the possibility of confounding trends we find that newspapers have a robust positive effect on political participation with one additional newspaper increasing both presidential and congressional turnout by approximately 0 3 percentage points newspaper competition is not a key driver of turnout our effect is driven mainly by the first newspaper in a market and the effect of a second or third paper is significantly smaller the effect on presidential turnout diminishes after the introduction of radio and television while the estimated effect on congressional turnout remains similar up to recent years we find no evidence that partisan newspapers affect party vote shares with confidence intervals that rule out even moderate sized effects we find no clear evidence that newspapers systematically help or hurt incumbents

is compulsory voting more democratic lijphart 1997 endorses compulsory voting as a means to increase voter turnout considering the likely effects of the role of information including its costs on the decision to vote and taking an expressive view of voting however compels us to investigate two unexamined claims by such advocates i that individuals are transformed by forcing them to vote and ii that a compulsory electoral outcome is a more accurate reflection of community preferences we argue that compelling those who are not particularly interested in or informed about the political process to vote increases the proportion of random votes and we show that under simple majority rule compulsory voting may violate the pareto principle the less popular candidate is more likely to be elected our results cast doubt on the miracle of aggregation argument which optimistically concludes that as long as uninformed votes are not systematically biased they will have no effect on voting outcomes we also briefly consider how information cascades can exacerbate this problem

concurrent elections and turnout causal estimates from a german quasi experiment conventional wisdom suggests that scheduling elections concurrently with other contests increases turnout however causal empirical evidence in favor of this claim is scarce at best moreover it is a priori unclear whether theory would predict a higher turnout if two low office elections are combined instead of a combination of a low office election and a major electoral race using a quasi experiment and a difference in differences estimation approach at the german municipality level i provide evidence that combining two low office elections significantly increases turnout

explaining voter turnout patterns an information theory voting research is rich in empirical regularities yet a parsimonious theory of voter turnout that can match the facts has proven to be elusive this paper argues that voter turnout patterns can be explained by extending the traditional rational voter model to include limited information a model is presented in which utility maximizing consumers receive higher payoffs from voting the more confident they are of their vote choice the model provides an explanation for the most important cross sectional voter turnout patterns in addition it suggests a novel explanation for the post 1960 decline in u s participation

pervasive shortages under socialism we present a new theory of pervasive shortages under socialism based on the assumption that the planners are self interested because the planners meaning bureaucrats in the ministries and managers offirms cannot keep the official profits that firms earn it is in their interest to create shortages of output and to collect bribes from consumers the theory implies that 1 an increase in the official price of a good might reduce output 2 market socialism is bound to fail even without computational complexities facing the planners and 3 price liberalization will succeed only iffirms get to keep their profits

on the form of transfers to special interests an important question in political economy concerns the form of transfers to special interests the chicago view is that political competition leads politicians to make such transfers efficiently the virginia position is that lack of information on the part of voters leads politicians to favor inefficient sneaky methods of redistribution this paper analyzes the form of transfers in a model of political competition in which politicians have incentives to make transfers to special interests it shows that when voters have imperfect information about both the effects of policy and the predispositions of politicians inefficient methods of redistribution may be employed

misconceptions and political outcomes a large literature shows that strategic interactions among actors with conflicting objectives can cause the political process to produce outcomes that lower welfare this paper investigates an alternative explanation of such outcomes if individuals errors in assessing the likely effects of proposed policies are correlated democratic decisionmaking can produce welfare reducing outcomes even in the absence of conflicting objectives under plausible assumptions choosing candidates from among the best informed individuals does not remedy the problems created by such errors but subsidising information and exposing representatives to information after their election do concentration of power has ambiguous effects

equilibrium political budget cycles political business cycle theories generally rely on nominal rigidities and voter myopia this paper offers an equilibrium theory that preserves some basic insights from earlier models though with significant refinements the political budget cycle emphasized here is in fiscal policy rather than output and inflation it arises via a multidimensional signal process one can consider the welfare implications of proposals to mitigate the cycle and the effects of altering the electoral structure copyright 1990 by american economic association

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

radio s impact on public spending if informed voters receive favorable policies then the invention of a new mass medium may affect government policies since it affects who is informed and who is not these ideas are developed in a voting model the model forms the basis for an empirical investigation of a major new deal relief program implemented in the middle of the expansion period of radio the main empirical finding is that u s counties with many radio listeners received more relief funds more funds were allocated to poor counties with high unemployment but controlling for these and other variables the effects of radio are large and highly significant

unemployment in interwar britain in a recent article two american authors benjamin and kochin 1979a argide that keynes was wrong in attributing much of the abnormally high unemployment of the interwar years to a deficiency of aggregate demand they claim to have discovered an alternative clue to the riddle of high unemployment in interwar britain and to be able to show that the persistently high rate of unemployment in interwar britain was due in large part not to deficient aggregate demand but to high unemployment insurance benefits relative to wages ibid p 474 the army of the unemployed standing watch in britain at the publication of the general theory was largely a volunteer army ibid in making their case benjamin and kochin present three sets of evidence the first is a regression of unemployment on a measure of the benefits to wages ratio the so called replacement ratio and on a measure of deviations of output from trend over the period 1920 38 the second set of evidence concerns the implication of the lower rate of unemployment among juveniles than among adults and the third set consists of the inferences to be drawn from the differences in the rate of unemployment between single and married women at different times all the bodies of evidence are used to support the hypothesis of the existence of an association between the replacement ratio and the level of unemployment but only the first namely the time series regression is used to establish the amount of unemployment to be explained in this way that amount is seen to depend on the specific values of the coefficients on the replacement term and on the output term in the regression table 1 reports the data which are used by benjamin and kochin the figures for output are for net national product q as given by feinstein 1972 for w benjamin and kochin derive a figure for average weekly earnings from the data for annual wage and salaries

still searching for an explanation of unemployment in interwar britain no man has hired us with pocketed hands and lowered faces we stand about in open places and shiver in unlit rooms only the wind moves over empty fields untilled where the plough rests at an angle to the furrow in this land there shall be one cigarette to two men to two women one half pint of bitter ale in this land no man has hired us our life is unwelcome our death unmentioned in the times t s eliot the rock 1934

policy positions information acquisition and turnout this paper explores the relationship between policy positions information acquisition and turnout in particular information acquisition and turnout choices are characterized as a function of citizens policy positions it is found that middle of the road citizens are the most likely to both acquire political information and abstain comparative statics analysis of the information technology indicates that an increase in the effectiveness of information has a higher positive impact on information and turnout than a comparable decrease in the cost of information furthermore following a polarization information and abstention are found to increase

bilateral monopolies and incentives for merger the paper presents a model of duopoly in which firms acquire inputs through bilateral monopoly relations with suppliers it combines a bargaining model with a duopoly model to examine how input pri

unemployment participation rates and unemployment legislation between the wars 1989 unemployment participation rates and unemployment legislation between the wars applied economics vol 21 no 10 pp 1341 1352

rational turnout the neglected role of groups rational choice theories have difficulty accounting for individual participation in collective action voting is among the acts hardest to explain consumption benefits have been proposed to account for nonzero turnout the model presented here establishes a political investment basis for these benefits i argue that voters often act not in isolation but as part of groups with shared interests while individuals still vote because of consumption benefits arising from the act of voting some of these consumption benefits are provided by group leaders out of collective benefits received by the group in return for its votes the collective benefit comes from a candidate adopting policy positions closer to those of the group in passing i show that the widespread availability of public opinion polling increases the candidate s incentive to shift position finally some data from recent off year elections are shown to be consistent with the model

understanding economic policy reform one of the eventual consequences of the global debt crisis was a wave of market oriented economic reforms this paper discusses the state of our knowledge on the political economy of this process why were inefficient and often unsustainable policies maintained for so long why are so many governments reforming now after decades of adherence to policies of an opposite kind have the reformers internalized the correct lessons from the east asian experience finally are there any helpful rules for reformers to follow in guiding their policies through complicated political terrain

the demand for bad policy when voters underappreciate equilibrium effects most of the political economy literature blames inefficient policies on institutions or politicians motives to supply bad policy but voters may themselves be partially responsible by demanding bad policy in this article we posit that voters may systematically err when assessing potential changes in policy by underappreciating how new policies lead to new equilibrium behaviour this biases voters towards policy changes that create direct benefits welfare would rise if behaviour were held constant even if those reforms ultimately reduce welfare because people adjust behaviour conversely voters are biased against policies that impose direct costs even if they induce larger indirect benefits using a lab experiment we find that a majority of subjects vote against policies that while inflicting direct costs would help them to overcome social dilemmas and thereby increase welfare subjects also support policies that while producing direct benefits create social dilemmas and ultimately hurt welfare both mistakes arise because subjects fail to fully anticipate the equilibrium effects of new policies more precisely we establish that subjects systematically underappreciate the extent to which policy changes will affect the behaviour of other people and that these mistaken beliefs exert a causal effect on the demand for bad policy

differential interpretation of public signals and trade in speculative markets most models of trade in speculative markets assume that agents interpret public information identically we provide empirical evidence on the relation between the volume of trade and stock returns around public announcements and we argue that the evidence is inconsistent with this assumption we then develop a model of trade around public announcements that incorporates differential interpretations and is consistent with the observed volume return relation then we test the standard model of belief revision underlying most models of trade using stock brokerage research analysts earnings forecasts the hypthesis of identical interpretations seems inconsistent with the forecast revisions in these data

a passion for voting we model expressive voting as a dynamic game with informed and ignorant voters a voter has selective memory for actions and he is aware of it we find a unique symmetric equilibrium with ignorant voting public signal in favor of one particular alternative creates the bandwagon and underdog effects when the signal is sufficiently strong the majority outcome is biased this is a possible reason for persistence of public policies

strategic union delegation and strike activity we develop a model of wage determination with private information in which the union has the option to delegate the wage bargaining to either surplus maximizing delegates or to wage maximizing delegates such as senior union members we show that the wage outcome in case of surplus maximizing delegates is not necessarily smaller than the wage outcome in case of wage maximizing delegates even when the wage bargaining with private information is close to one with complete information however if it is commonly known that the union is stronger than the firm and the demand is sufficiently elastic then delegating to wage maximizing delegates definitely increases the wage at equilibrium the maximum delay in reaching an agreement is greater whenever the union chooses wage maximizing delegates instead of surplus maximizing delegates and remains finite even when the period length shrinks to zero

voter participation and strategic uncertainty the paradox of not voting is examined in a model where voters have uncertainty about the preferences and costs of other voters in game theoretic models of voter participation under complete information equilibrium outcomes can have substantial turnout even when voting costs are relatively high in contrast when uncertainty about preferences and costs is present only voters with negligible or negative net voting costs participate when the electorate is large

residential mobility and voter turnout we examine the characteristics of a largely ignored low turnout group people who have recently moved we find that neither demographic nor attitudinal attributes explain their lower turnout instead the requirement that citizens must register anew after each change in residence constitutes the key stumbling block in the trip to the polls since nearly one third of the nation moves every two years moving has a large impact on national turnout rates we offer a proposal to reduce the effect of residential mobility on turnout and estimate that turnout would increase by nine percentage points if the impact of moving could be removed the partisan consequences of such a change would be marginal

unemployment and unemployment benefits in twentieth century britain a reply to our critics in the turbulent years following world war i unemployment compensation in britain was raised from its 1913 level of 27 percent of average wages to levels that neared 60 percent of wages the unemployment rate which had averaged 4 percent during the 20 years before world war i rose dramatically averaging 10 percent even during the expansions of the late 1920s and late 1930s world war ii inflation drove the ratio of benefits relative to wages down to levels comparable to those of the pre world war i years and during the immediate post world war ii period the unemployment rate in britain was lower than ever before or since massive changes in british social policy begun in 1966 raised benefits relative to wages and markedly relaxed conditions on their receipt unemployment has followed benefits upward and by 1981 both the unemployment rate and the ratio of benefits to wages were at levels higher than during the late 1930s our critics argue that this story is misleading in addition to a rebuttal of our critics claims this reply contains 1 new crosssectional and time series evidence that the unemployment insurance system raised the unemployment rates in interwar britain and 2 new cross sectional evidence on the magnitude of the insurance sys

bargaining structure and strike activity in this paper the authors examine the nature of the relationship between bargaining structure and strike activity in particular they focus on the implications of the fact that the amount of information revealed by a union s actions depends on the bargaining environment in which it operates the authors demonstrate that a union representing workers of more than one firm will face a greater incentive to reject offers than an independent union this implies that a merger of two unions or the formation of bargaining coalitions will lead to a greater level of strike activity

the paradox of voting intelligently classical economic models predict far less voting than happens in practice expressive voting may partly explain the divergence but some who are generally uninterested in politics and thus unlikely to take elections as an important form of personal expression nevertheless vote one possible explanation is that these voters overestimate the instrumental outcome changing consequences of voting such systematic misperception may be more likely among those with less cognitive capacity analysis of responses to the american national election studies confirms this hypothesis while intelligence and interest both increase the likelihood of voting the combination enhances the likelihood of turnout still further

a bargaining model with incomplete information about time preferences etude d un jeu de negociation strategique sequentiel avec information incomplete caracterisation d une classe d equilibres sequentiels appeles equilibres sequentiels de negociation et demonstration de l unicite de cet equilibre

the swing voter s curse in the laboratory this paper reports the first laboratory study of the swing voter s curse and provides insights on the larger theoretical and empirical literature on pivotal voter models our experiment controls for different information levels of voters as well as the size of the electorate the distribution of preferences and other theoretically relevant parameters the design varies the share of partisan voters and the prior belief about a payoff relevant state of the world our results support the equilibrium predictions of the feddersen pesendorfer model and clearly reject the notion that voters in the laboratory use naive decision theoretic strategies the voters act as if they are aware of the swing voter s curse and adjust their behavior to compensate while the compensation is not complete and there is some heterogeneity in individual behavior we find that aggregate outcomes such as efficiency turnout and margin of victory closely track the theoretical predictions

does political knowledge increase turnout evidence from the 1997 british general election a number of recent formal models predict a positive effect of political knowledge on turnout both information acquisition and turnout however are likely to be determined by a similar set of variables rendering hard the identification of a causal link in empirical investigations available empirical regularities should therefore be interpreted as mere correlations i address this problem by using an intrumental variables approach where the instruments are represented by various proxies of information supply on mass media using survey data from the 1997 british general election study i show that political knowledge has a sizeable influence on the probability of voting and that mass media play an important role in influencing political participation

educational inequality and public policy preferences evidence from representative survey experiments abstract to study how information about educational inequality affects public concerns and policy preferences we devise survey experiments in representative samples of the german population providing information about the extent of educational inequality strongly increases concerns about educational inequality it also affects support for equity oriented education policies which have high baseline support although effects are quantitatively small on average however instrumental variable estimates suggest substantial effects of concerns on policy preferences among the compliers whose concerns are shifted by the information treatment there are substantial effects on support for compulsory preschool which increases further if respondents are informed about policy effectiveness

biased beliefs and retrospective voting why democracies choose mediocre policies there are two well established empirical regularities about voters first they entertain systematically biased beliefs about how public policies affect economic outcomes second voters vote retrospectively they punish the incumbent for poor and reward him for good macroeconomic performance thus political parties face a trade off offering popular yet economically harmful policies increases the chance of being elected today but decreases the chance of re election we provide the first rigorous game theoretical analysis of the trade off the model addresses two questions how can biased beliefs and retrospective voting be explained consistently what policy outcomes emerge in party competition to micro found persistently biased beliefs we introduce the psychological concept of mental models deviating from earlier studies we allow parties to choose strategic mixtures of populist i e bad yet popular and good but less popular platforms we show that retrospective voting provides a self correction mechanism so that parties offer strategic mixtures of policies in equilibrium rather than purely populist or purely good policy platforms thus democracy is characterized by mediocre policy choices and half hearted reforms an incumbent bias or unclear responsibilities weaken the self correction mechanism

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

overconfidence in political behavior this paper studies theoretically and empirically the role of overconfidence in political behavior our model of overconfidence in beliefs predicts that overconfidence leads to ideological extremeness increased voter turnout and stronger partisan identification the model also makes nuanced predictions about the patterns of ideology in society these predictions are tested using unique data that measure the overconfidence and standard political characteristics of a nationwide sample of over 3 000 adults our numerous predictions find strong support in these data in particular we document that overconfidence is a substantively and statistically important predictor of ideological extremeness voter turnout and partisan identification jel c83 d03 d72 d83

if homo economicus could choose his own utility function would he want one with a conscience reply in my model of the evolution of honesty 1 i assumed the existence of a signal a blush perhaps extreme values of which served to identify some individuals as being honest with certainty joseph harrington notes that without this assumption honest individuals have difficulty invading a population initially dominated by defectors for readers who do not wish to work through the algebra in his comment the argument is easily summarized in nontechnical terms suppose two honest mutants a and b arrive in an uncountably large population consisting entirely of dishonest persons and suppose that the probability that an honest person exhibits an intense blush is say 0 999 while the corresponding probability for everyone else is only 0 001 when a sees an intense blush on the face of b what will then be his estimate of the probability that b is honest assuming that a knows the laws of elementary probability and corrects for the base rate of honest persons in the population it will be zero when virtually everyone in the population is dishonest even a person with an intense blush will be pegged as dishonest provided that even the smallest fraction of dishonest persons also shows an intense blush with

a structural model of turnout and voting in multiple elections this paper develops a unified approach to study participation and voting in multiple elections the theoretical setting combines an uncertain voter model of turnout with a spatial model of voting behavior we apply our framework to the study of turnout and voting in u s presidential and congressional elections we structurally estimate the model using individual level data for the 2000 elections and quantify the relationships between observed individual characteristics and unobserved citizens ideological preferences information and civic duty we then use the estimated model which replicates the patterns of abstention selective abstention split ticket voting and straight ticket voting observed in the data to assess the effects of policies that may increase citizens information and sense of civic duty on their turnout and voting behavior

believing in economic theories sex lies evidence trust and ideology i introduction beliefs about the descriptive validity of economic theories may influence preferences among economic policies if so these beliefs may shape and constrain economic institutions and policies in democracies we examine how beliefs about the descriptive validity of supply and demand theory respond to evidence and how these beliefs are related to individual attitudes and demographic characteristics with a strong focus on the potential role played by ideology political economists usually view heterogeneity of policy preferences as mostly reflecting heterogeneity of values interests or goals a large interdisciplinary debate continues about the relative importance of diverse self interests and public spirited goals in explaining political outcomes but the potential role played by diversity of positive beliefs has received relatively little attention preferences under uncertainty are typically decomposed into values utilities of outcomes and beliefs about the likelihoods of outcomes suggesting that heterogeneity of policy preferences may derive as much from differences in beliefs about how the economic world functions as from differences in interests such descriptive beliefs frequently differ sharply from those of economists slembeck 2003 for instance blendon et al 1997 reported that only 28 of the us public think price increases are mainly due to the laws of supply and demand and nearly three fourths of the public believed that the increase in gasoline prices in 1996 was due more to the oil companies trying to increase profits than to supply and demand while 85 of economists believed that supply and demand explained the price increase the recurring significance of ideology or proxies for it in empirical studies of political outcomes provides one reason to take this idea seriously rubin 2001 concluded that while electoral constraints based on voter interests limit politicians behavior factors measuring ideology have large power in explaining congressional voting ideology could reflect self interest but other explanations are possible from the perspective of bounded rationality people might use ideology heuristically to evaluate descriptive claims when evidence is scant or hard to evaluate from a game theoretic perspective people may regard descriptive claims made by others with ideologies different from their own as manipulation attempts and hence may discount them particularly in the long run causality may run the other way around revisions of descriptive beliefs about the workings of the economic world may bring about changes in ideology we address some of these matters below and discuss others in our conclusions romer 2003 p 29 offered a theoretical account of how diverse but correlated beliefs can lead to inefficient policy outcomes even when interests do not vary and concluded that t he research program suggested by this paper is that of bringing ideology back into the analysis of politics there may be a great deal to be learned if we do not presume that ideology is just a mask for individuals well informed pursuit of their self interest but instead consider the possibility that it often reflects individuals beliefs and that these beliefs often influence their actions our results here provide some evidence supporting this view we understand of course that the student respondents we examine in this study are a narrowly selected subset of any polity 1 bearing this in mind perhaps it is best to view our work as illustrating an approach to exploring the relationship between ideology and descriptive belief still more broadly we freely combine econometric and experimental methods of economics with survey measurement tools borrowed from political and social psychology our work here may also be regarded as an applied introduction to some of the latter tools

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

unemployment in interwar britain still searching for an explanation during the past 2 decades a gradual transformation has occurred in the way british economic experience between the two world wars is viewed the traditional interpretation has stressed the severity and frequency of business cycle fluctuations the relatively slow growth of international trade on which britain s economy was heavily dependent the disproportionate contraction of traditional export markets the weakness of the pound sterling and the breakup of the international gold standard the labor problems of the twenties and above all the chronic nature of mass unemployment in many respects the british economy has been seen as having experienced a more or less continuous depression from 1921 to 1939 for even at their best official figures show that unemployment affected 1 million people or some 10 percent of the labor force however this generally condemnatory view of the performance of the british capitalist system has been subjected to much revision in particular new output data have indicated that a reasonable rate of growth was achieved in the period in real terms gross domestic product grew at about 2 2 4 percent per annum 1924 37 and industrial production grew at 3 1 percent per annum 1920 37 2 the implications of these output data have been taken up by a number of

how much voluntary unemployment in interwar britain in a recent issue of this journal daniel benjamin and levis kochin argue that the prolonged high unemployment in interwar britain was due to the operation of an unemployment insurance scheme that paid benefits that were high relative to wages and available subject to few restrictions we estimate that the insurance system raised the unemployment rate by five to eight percentage points on average and that in the absence of the system unemployment would have been at normal levels through much of the period benjamin and kochin 1979 p 441 the point of this note is to suggest that the bold claim made by benjamin and kochin is flawed by their almost complete failure to take account of the genuinely seeking work and meanstest clauses which were actively used in much of the 1921 38 period to disqualify many of the unemployed from receipt of benefit and by their unconvincing dismissal of the reverse causation argument that many of the increases in liberality of unemployment insurance provision resulted directly and indirectly from increases in unemployment rather than vice versa

supersized votes ballot length uncertainty and choice in direct legislation elections voters in polities that make heavy use of direct democracy are frequently confronted with ballots that contain a multitude of propositions claims that direct legislation elections overwhelm voters with choices they are not competent to make should particularly apply to such demanding settings yet evidence on the effects of lengthy ballots on voting behavior is scant this study reviews theories of decision making under uncertainty and tests their predictions in a mixed heteroscedastic model of vote choice that is fitted to a unique collection of survey and contextual data on swiss referendums increasing ballot length is demonstrated to interfere with the voters ability to translate their political preferences into consistent policy choices

voting on the budget deficit this paper analyzes a model in which a group of rational individuals votes over the composition and time profile of public spending all voters agree that a balanced budget is ex ante optimal however if there is disagreement between current and future majorities a balanced budget is not a political equilibrium under majority rule under certain conditions a majority of the voters favors a budget deficit and the equilibrium deficit is larger the greater is the polarization among voters copyright 1990 by american economic association

market competition and strike activity we develop a model of wage bargaining with private information in a duopoly we investigate how product differentiation and market competition bertrand vs cournot competition affect wages and strikes if bargaining takes place at the industry level then both the wage outcome and the strike activity do not depend on the degree of product differentiation whatever the type of market competition however if bargaining takes place at the firm level then wages and strikes are increasing with the degree of product differentiation and the strike activity is smaller under bertrand than under cournot competition

groups in rational turnout models a model of the strategic calculus of voting that incorporates the behavior of groups is presented if candidates choose different positions positive turnout is possible in partial equilibrium and is generally larger than that without group rationality nevertheless if candidates are probability maximizers and a unique general equilibrium exists the candidates will choose equivalent positions and turnout will be zero even with group rationality but if candidates care about both policy and winning they will choose different positions and cause positive turnout this turnout will be larger than that that would occur without group rationality group rationality alone cannot explain positive turnout in a general equilibrium theory of elections it does imply larger turnout in conjunction with policy oriented candidates than would be predicted solely by individualistic rational behavior

de centralization and voter turnout theory and evidence from german municipalities a vast academic literature illustrates that voter turnout is affected by the institutional design of elections e g compulsory voting electoral system postal or sunday voting in this article we exploit a simple downsian theoretical framework to argue that the institutional framework of public good provision and in particular the distribution of political and administrative competences across government levels likewise affects voters turnout decisions by influencing the expected net benefit of voting empirically we exploit the institutional variation across german municipalities to test this proposition and find supportive evidence

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

simple explanations of turnout decline several recent studies have claimed to explain the post 1960 decline in u s presidential and congressional election turnout in terms of just a few variables abramson and aldrich 1982 attribute the great bulk of the decline to aggregate declines in partisanship and political efficacy shaffer 1981 attributes still more of the decline to aggregate decreases in these same two variables plus age and following the campaign in the newspapers and kleppner 1982 attributes virtually all of the decline to aggregate decreases in the first three of these variables we show how these studies measure explanation too generously and how the very short handedness of their models makes them seem more successful than they are these few variables we conclude leave most of the decline unexplained

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

abstention ideology and information acquisition we consider an election in which each voter can collect information of different precision voters have asymmetric information and preferences that vary both in terms of ideology and intensity in contrast to all other models of voting with endogenous information in equilibrium voters collect information of different qualities we show that information and abstention are not necessarily negatively correlated some voters are more likely to abstain the more informed they are we also discuss the manner in which incentives to acquire information are non monotonic in terms of both ideology and the level of intensity

aggregating information by voting the wisdom of the experts versus the wisdom of the masses this article analyzes participation and information aggregation in a common value election with continuous private signals in equilibrium some citizens ignore their private information and abstain from voting in deference to those with higher quality signals even as the number of highly informed peers grows large however citizens with only moderate expertise continue voting so that voter participation remains at realistic levels e g 50 to 60 percent for simple examples the precise level of voter turnout along with the margin of victory are determined by the distribution of expertise improving a voter s information makes her more willing to vote consistent with a growing body of empirical evidence but makes her peers more willing to abstain providing a new explanation for various empirical patterns of voting equilibrium participation is optimal even though the marginal voter may have very little e g below average expertise and even though nonvoters information is not utilized copyright oxford university press

strategic delay in bargaining this paper analyses a bargaining model with incomplete information in which the time between offers is an endogenous strategic variable we find equilibria involving a delay to agreement that is due to the use of strategic time delay by bargainers to signal their relative strength under some specifications of the parameters delay is present in the unique sequential equilibrium whose beliefs satisfy one intuitive restriction this delay does not vanish as the minimal time between offers becomes small

on price recognition and computational complexity in a monopolistic model a single seller of an indivisible good operates in a market with many consumers who differ in their ability to process information the consumers constraints are modeled in two submodels the first in terms of the limits on the number of sets in the partition of the price space and the second in terms of the limits on the complexity of the operation he can use to process a price offer for the construction of the second submodel the tool of a perceptron is borrowed from the parallel computation literature assuming a negative correlation between the seller s cost of supply of the good and the consumer s ability to process information i demonstrate that the heterogeneity of consumer s abilities can be used by the seller to profitably discriminate among them