Title: Essays in Political Economy and Experimental Economics
Description: In the first chapter, I measure the effects of street-level political advertising on voting behavior. I use a novel dataset on ad location in a major Spanish city during elections for the national parliament as well as granular socio-economic and voting data. This set-up, where more than two parties are running for office and elections are very competitive, allows me to explore the heterogeneous effects of ads across parties as well as how parties' ads affect other parties' vote shares. To identify the effects of parties' ads, I exploit a legally mandated randomized assignment of ad location to parties across multiple years. I find that a party's own ads have a positive effect on its vote share, although the effects are heterogeneous across parties. A one standard deviation increase in the number of ads increases a party's vote share by 0.79 percentage points on average. Ads of parties with ideologically distant platforms consistently have a negative effect on a party's vote share. In contrast, ads of parties that are close competitors may act either as complements or substitutes in different years.

The second chapter analyses the effects of an economic shock on the emergence of new parties and other changes in voting parties by using regional variation in the exposure to the shock. I find that a worsening of economic conditions as measured by unemployment rate leads to an increase in electoral competition and volatility. In particular, the deeper the effects of the recession in a area, the larger the number of new parties emerge and become more successful and there is an increase in the changes in vote shares. On the other hand, the vote share of parties previously in government decreases and a decrease in vote share concentration. The third chapter is a co-authored works where we present experimental evidence establishing that the level of incentives affects both gameplay and beliefs. Holding fixed the actions of the other player, we find that, in the context of dominance-solvable games, higher incentives make subjects more likely to best-respond to their beliefs. Moreover, higher incentives result in more responsive beliefs but not necessarily less biased.

We provide evidence that incentives affect effort and that it is effort, and not incentives directly, that accounts for the changes in belief formation. The results support models where, in addition to choice mistakes, players exhibit costly attention.