Speakers

Levon Barseghyan

Cornell University

Institutions and Growth in Limited Access Societies

(Joint work with Ani Guerdjikova)

We build a dynamic political economy model with a two-class society: workers and the elite. In the model, the formation of the elite, the rate of innovation and …fiscal policy are endogenous. We focus on the conflict within the elite over two fundamental engines of economic growth: innovation and public investment. The model creates a mapping between institutions and economic outcomes which is consistent with the observed patterns of growth. The model also shows that separation of control over various policies maybe optimal for the elite and that, forced to meet the demands of the working class, the elite may delegate policy control to some of its members, even though such delegation exacerbates the conflict within the elite and leads to policy failures. The elite commits to institutions that allow for such failures in order to prevent more harmful outcomes, such as rapid entry and subsequent deterioration of its economic and political power.

Marco Battaglini

Princeton University

Dynamic Electoral Competition and Constitutional Design

We characterize the equilibria of a dynamic model of electoral competition under alternative voting rules. Electoral competition is modeled as a dynamic extension of a standard probabilistic voting model in which public debt is a state variable creating a strategic linkage across electoral cycles. In any given state of the economy, a proportional system (PS) generates stronger incentives to provide public goods and to lower taxation than a standard majoritarian system (MMS). As in the received literature, therefore, in a static version of the model an MMS generates less public good and higher taxation than a PS. In the steady state of a dynamic model, however, the opposite may be true because a PS is more dynamically inefficient and tends to accumulate more public debt than an MMS. The relative performances of a PS and an MMS depend on the types of shocks that affect the economy and voters' preferences.

Renee Bowen

Stanford University

On Dynamic Compromise

(Joint work with Zaki Zahran)

What prevents majorities from extracting surplus from minorities in legislatures? We study an infinite horizon game where a legislative body votes to determine distributive policy each period. Proposals accepted by a simple majority are implemented, otherwise the status quo allocation prevails. We construct a symmetric Markov perfect equilibrium that exhibits compromise in the following sense: if the initial status quo allocation is "not too unequal", then the Markov process is absorbed into allocations in which more than a minimum winning majority receives a positive share of the social surplus with positive probability. The compromise is only sustainable if, starting from the "unequal" allocations, the Markov process is absorbed into allocations in which there is a complete absence of compromise. The compromise equilibrium exists when discounting is neither too small nor too large. We find that, contrary to intuition, the range of discount factors for which this equilibrium exists increases as the number of legislators increases. In this sense, compromise is easier in larger legislatures.

Doru Cojoc

Stanford University

Policies or Values? The Choice of Rhetoric in Electoral Competitions

I develop a model of electoral competition in which candidates have two types of costly messages to send to voters: policy announcements and statements about their values. The key difference between the messages is that a candidate who lies about his intended policies experiences a cost only if elected but bears no cost otherwise, while a candidate who misstates his values bears a cost regardless of the outcome of the election. At equilibrium, the more extreme candidates run on values while the centrists announce policies. A stronger set of values improves the payoff to all candidates in a party, but gives that party no electoral advantage in fully separating equilibria. In hybrid equilibria, the stronger-values party also has an advantage at the polls. Supplementing the set of electoral messages with value statements is a Pareto improvement for society over policies-only elections in fully separating equilibria, but this is not necessarily true in hybrid equilibria. In that case, the centrist candidates and the median voter may lose while the more extreme candidates are better off than in policies-only elections.

Peter Coughlin

University of Maryland

Probabilistic and Spatial Models of Voting

This paper surveys some models of committees and elections. It begins with a discussion of the history of the models. This part covers influential work by Duncan Black and Harold Hotelling. This discussion also has material about important work by Anthony Downs which built on Hotelling's work. The models developed by Black, Hotelling and Downs were the "pioneering work" for the research being surveyed -- in the sense that the authors who have developed the other models discussed in this survey are authors who have used similar assumptions. The rest of the paper considers assumptions that are similar to the ones used in the "pioneering work". As in some of the subsequent work on this topic, the assumptions are stated in the language of game theory. As these assumptions are set out, the paper discusses work that various other authors have done on models of committees and elections. The paper includes applications of both (1) solution concepts based on the concept of the core from cooperative game theory and (2) solution concepts from non-cooperative game theory.

Tiberiu Dragu

University of Illinois at Urbana-Champaign

Institutional Constraints in Times of Crisis: Counter-Terrorism and Electoral Accountability

(Joint work with Mattias Polborn)

We develop a game-theoretic model of interactions among a government, a representative citizen, and the (non-terrorist) members of the community in which terrorists have their roots and derive several results. First, security can decrease whenever the government faces increased electoral incentives to provide it. Second, if the government can commit to a level of anti-terrorist activities, increased electoral incentives to provide more security always reduces the equilibrium probability of a terrorist attack. A central result of our analysis is that some constraints on government actions always improve security even when security is a country’s only concern. We thus provide a new security rationale for laws and institutions that, at least to some extent, tie the hands of the government in its struggle against terrorism. Checks and balances on the government’s antiterrorism actions, such as judicial review, can increase a country’s security, even while directly inhibiting some anti-terror activities.

Georgy Egorov

Kellogg School of Management

Why Great Minds Think Alike: A Theory of Strategic Information Dissemination and Demand for News

(Joint work with Mattias Polborn)

When deciding whether and which media outlet to read or watch, consumers may not only be driven by the considerations of getting direct utility or obtaining new information. In addition, they may take into account the opportunity that knowing certain news facilitates communication with other people. We build a model where agents of heterogeneous talent benefit from impressing their prospective employers. We show that the employer gets a more precise estimate of the worker\'s talent if they talk about the same news rather than about different issues. Consequently, smart agents have an incentive to read the same news as employers do in order to facilitate communication. Intuitively, doing the opposite would mean educating the employer at the expense of leaving a positive impression. If the initial polarization in preferences is not sufficiently low, everyone watches the same media outlets in equilibrium. The effect poses an endogenous limit on social learning and has important implications for the demand for information and for polarization within societies. This gives rise to several important implications.

Jon Eguia

New York University

Voting Blocs, Party Discipline and Party Formation

(Joint work with Jon X Eguia)

I study the strategic incentives to coordinate votes in an assembly. Coalitions form voting blocs, acting as single players and affecting the policy outcome. In an assembly with two exogenous parties I show how the incentives to accept party discipline depend on the types of the agents, the sizes of the parties, and the rules the blocs use to aggregate preferences. In a game of fully endogenous party formation, I find sufficient conditions for the existence of equilibria with one bloc, two blocs, and multiple blocs.

Hulya Eraslan

Johns Hopkins University

Rhetoric in Legislative Bargaining with Asymmetric Information

(Joint work with Ying Chen and Hulya Eraslan)

In this paper we analyze a legislative bargaining game in which parties privately informed about their preferences bargain over an ideological and a distributive decision. Communication takes place before a proposal is offered and majority rule voting determines the outcome. When the private information pertains to the ideological intensities but the ideological positions are publicly known, it may not be possible to have informative communication from the legislator who is ideologically distant from the proposer, but the more moderate legislator can communicate whether he would "compromise" or "fight" on ideology. If instead the private information pertains to the ideological positions, then all parties may convey whether they will "cooperate," "compromise," or "fight" on ideology. When the uncertainty is about ideological intensity, the proposer is always better off making proposals for the two dimensions together despite separable preferences, but when the uncertainty is about ideological positions, bundling can result in informational loss which hurts the proposer.

Qiang Fu

National University of Singapore

Policy Making with Reputation Concerns

(Joint work with Ming Li)

We study the policy choice of an incumbent politician who is concerned with the public's perception of his capability. The politician decides whether to maintain the status quo or to conduct a risky reform. The success of the reform critically depends on the ability of the politician in office, which is privately known to the politician. The public observes both his policy choice and the outcome of the reform, and forms a posterior on the true ability of the politician. We show that politicians may engage in socially detrimental reform in order to be perceived as more capable. Conservative institutions that thwart reform may potentially improve social welfare.

Sambuddha Ghosh

Boston University

Ideologues Beat Idealists

(Joint work with Vinayak Tripathi)

Our model considers a majority election between an ideologue committed to a fixed policy and an idealist candidate who implements the ex-post socially optimal policy. Voters are aware that their individual rankings of policies may change after the election according to common or idiosyncratic shocks. We show that in the unique symmetric informative pure-strategy Nash equilibrium, the ideologue often beats the idealist, even when this choice hurts all groups within the population. Inefficiency arises both for sincere and for strategic voters; we also show that it is more pervasive in the latter case.

Gabriele Gratton

Boston University

The Demagogue's Curse: Information Aggregation and Endogenous Platforms

I study a model of representative democracy with asymmetric information. Two solely office-motivated candidates know the state of nature, while each voter receives an independent imperfect signal. I show that a minimal amount of private information for the voters ensures the existence of robust, sincere voting rules, i.e. rules which lead to full information equivalence in all sequential equilibria. Moreover, if there is a strictly positive probability for the candidates to always propose the ex-post optimal platform, then there is only one possible electoral outcome, that is, one in which even office-motivated candidates always propose the ex-post optimal
platform. This result is robust to some plausible extensions of the model, including fully strategic voting, policy-motivated candidates, sequential political campaigns and different majority rules.

Helios Herrera

Columbia

Turnout and Power Sharing

(Joint work with Massimo Morelli)

Ming Li

Concordia University

Fuzzy Political Campaigns

(Joint work with Arianna Degan)

We analyze a model of political campaigns, where a challenger aims to unseat an incumbent. The challenger and the incumbent differ in their quality. All voters want to elect the candidate with higher quality. The challenger chooses the level of precision of campaign messages to affect his probability of being elected. More precise campaigns are more costly for the challenger. We characterize the equilibria when voters observe both the message and the precision. We show that only two-step non-trivial equilibira are possible. This framework allows us to investigate whether limits on campaign spending may be welfare-enhancing.

Pei-yu (Melody) Lo

The University of Hong Kong

Why Vote First --- Simultaneous v.s. Sequential Primary

I study and compare preference aggregation in a simultaneous and a sequential multicandidate election. Voters have perfect information about their own preference but do not know the median voter's preference. A voter has an incentive to vote for her second choice for fear that a tie between her second and third choice is more likely than she would like. Therefore, a voter may want to coordinate with supports of her second choice. I show that when voters' preference intensity for their first choice is moderate, in the limit as the electorate increases, there is a unique equilibrium in the voting game within one voting round exhibiting multi-candidate support. In such an equilibrium, the ex ante probability that a candidate wins increases in her supporters' preference intensity and decreases in her opponents' preference intensity. There is too much coordination with supporters of a voter's second choice in that sometimes the median voter's second choice wins the election. A sequential election allows later voters to coordinate with earlier voters. Therefore, in the last voting round, votes are split between the two front runners. The voting outcome in the first round affects the voting behavior of the second round. A victory of a voter's favorite candidate in the first round may change the outcome of the second round from the voter's second choice to her favorite candidate or from her last choice to her second choice. When preference intensity is moderate, voters vote more for their first choice if they vote first in a sequential election than in a simultaneous election, and the probability that the median voter's first choice does not win a voting round is smaller if voting takes place sequentially.

Uliana Popova Makarov

Princeton University

Cheap talk with multiple audiences: an experimental analysis

(Joint work with Marco Battaglini)

We compare and contrast information transmission in a cheap talk game with multiple audiences under private and public setting. Farrell and Gibbons (1989) show that in a model of cheap talk game with two audiences whenever the sender has incentives to send informative messages to both receivers in private, the sender will also communicate informatively with both receivers in public. Furthermore, Farrell and Gibbons describe cases when the presence of another audience disciplines the communication in such a way that information is transmitted in public while it was not in private. We test these possible scenarios in an experimental setting by comparing participants’ decisions in two-person (one sender, one receiver) private games with decisions in three-person (one sender, two receivers) public games. Combining the payoffs from two-person games to construct the payoffs in three-person games allows us to identify the effect of multiple audiences on information transmission. Indeed we find that going from private to public setting can never destroy informative messages for both receivers simultaneously and in particular cases can lead to more information being transmitted.

Joseph McMurray

Brigham Young University

A Spatial Model of Common-value Elections: Electoral Mandates, Minor-Party Candidates, and the Signaling Voter's Curse

This paper analyzes a spatial model of common-value elections. Within a continuum of alternatives, one policy is designated as optimal, but citizens observe only private signals of this policy's location. When two candidates compete for office by making binding policy commitments, their platforms converge in equilibrium, as in standard median voter theorems, though with dramatically different welfare implications. When candidates are instead policy motivated, their platforms diverge. If platform commitments are not binding, the winning candidate departs from his platform policy in response to "mandates" conveyed by his margin of victory. This signaling role for voters renders every vote "pivotal", including votes for candidates who are unlikely to win the election. This eliminates the swing voter's curse, but introduces an analogous "signaling voter's curse", causing uninformed citizens to abstain from voting even when voting is costless.

Lydia Mechtenberg

TU, Berlin

Winners and Losers of Early Elections: On the Welfare Implications of Political Blockades and Early Elections

(Joint work with Felix Bierbrauer)

We provide a welfare analysis of early elections in a dynamic model of political competition with endogenous political blockades. Blockades arise if a party wins an election due to the support of voters with extreme policy preferences. We show that flexible election timing has the advantage that political blockades are overcome and political decisions are taken more frequently, but also the disadvantage that these decisions are of a lower quality. We argue that the disadvantage of early elections is likely to dominate, but that time-consistency problems make a constitutional ban on early elections difficult to maintain in a parliamentary democracy.

Matias Nunez

CNRS-Cergy

Political Competition over Distortionary Taxation

Political parties compete over income tax functions, and voters vote and decide whether to pay full taxes or to make an effort to modify their tax burden. We show that political parties only propose efficient income tax functions given that Laffer condition over income taxation is satisfied. Regarding the shape of income tax functions, it need not be the case that the majority of voters prefer progressive taxation to regressive taxation as a consequence of the distortions. Nevertheless, we prove that the political appeal for progressivity is restored under mild conditions.

Santiago Oliveros

Haas School of Business-University of California, Berkeley

Combinatorial Voting

(Joint work with David Ahn)

We study elections that simultaneously decide multiple issues, where voters have independent private values over bundles of issues. The innovation is considering nonseparable preferences, where issues may be complements or substitutes. Voters face a political exposure problem: the optimal vote for a particular issue will depend on the resolution of the other issues. Moreover, the probabilities that the other issues will pass should be conditioned on being pivotal. We first prove equilibrium exists when distributions over values have full support or when issues are complements. We then study limits of symmetric equilibria for large elections. Suppose that, conditioning on being pivotal for an issue, the outcomes of the residual issues are asymptotically certain. Then limit equilibria are determined by ordinal comparisons of bundles. We characterize when this asymptotic conditional certainty occurs. Using these characterizations, we construct a nonempty open set of distributions where the outcome of either issue remains uncertain in all limit equilibria. Thus, predictability of large elections is not a generic feature of independent private values. While the Condorcet winner is not necessarily the outcome of the election, we provides conditions that guarantee the implementation of the Condorcet winner. Finally, we prove results that suggest transitivity and ordinal separability of the majority preference relation are conducive for ordinal efficiency and for predictability.

Rohit Parikh

City University of New York

The Logic of Campaigning

(Joint work with Walter Dean and Rohit Parikh)

We consider a political candidate campaigning to be elected. Her chances of being elected will depend on how various groups of voters perceive her, and how they perceive her will depend on what she has said. Different groups of voters may have different preferences and a statement preferred by one group of voters may be disliked by another. Moreover, voters may be optimistic (willing to think the best of the candidate), pessimistic (inclined to expect the worse), or expected value voters, who average over various possibilities which may come about if she is elected. Given these considerations, what should she say? We formalize this problem in propositional logic with certain utility values, and certain intensities of preference for various groups of voters, and show that {\em if the voters are expected value voters}, then she is best of being as explicit as possible. Thus a reluctance to be explicit may come about as a result of the presence of optimistic voters

Eduardo Perez

Ecole Polytechnique

Choosing Choices: Agenda Selection with Uncertain Issues

(Joint work with Raphael Godefroy)

This paper studies selection rules i.e. the procedures committees use to choose whether to place an issue on their agenda. The main ingredient of the model is that committee members are uncertain about their final preferences at the selection stage: they only know the probability that they will eventually prefer the proposal to the status quo at the decision stage. This probability is private information. We find that the more stringent the selection rule, the less voters are inclined to select an issue, so that individual behavior actually reinforces the effect of the rule instead of balancing it. Conditional on the pivotal event, the probability that the issue passes the final stage depends on whether she finally prefers the alternative or the status quo. Increasing the selection quorum increases the probability that the issue passes more if she eventually prefers the alternative than if she eventually prefers the status quo. In order to compensate for that, the agent becomes more selective. The final decision rule has the opposite effect on voters' behavior. Our basic model fits the procedure of the U.S. Supreme Court. The results extend to non-simultaneous selection procedures such as petitions and citizens' initiatives, as well as to selection by subcommittees as in the U.S. Congress. We describe optimal rules when there is a fixed cost of organizing the final election.

Rainer Schwabe

Princeton University

Reputation and Accountability in Repeated Elections

This paper studies a model of infinitely repeated elections in which voters attempt simultaneously to select competent politicians and to provide them with incentives to exert costly effort. Voters are unable to incentivize effort if they base their reelection decisions only on incumbent reputation. However, equilibria in which voters use reputation-dependent performance cutoffs (RDC) to make reelections decisions exist and support positive effort. In these equilibria, politicians’effort is decreasing in reputation, and expected performance is decreasing in tenure. Like the equilibria in Ferejohn 1986, RDC equilibria rely on voters being indifferent between reelecting incumbents and electing challengers. I show that this voter-indifference condition is closely related to weak renegotiation-proofness (Farrell and Maskin 1989).

Ken Shotts

Stanford GSB

Policy-Specific Information and Informal Agenda Power

(Joint work with Alexander Hirsh)

In Gilligan and Krehbiel’s models of procedural choice in legislatures, a committee exerts costly effort to acquire private information about an unknown state of the world. Subsequent work on expertise, delegation, and lobbying has largely followed this approach. In contrast, we develop a model of information as policy valence. We use our model to analyze a procedural choice game, focusing on the effect of transferability, i.e., the extent to which information acquired to implement one policy option can be used to implement a different policy option. We find that when information is transferable, as in Gilligan and Krehbiel’s models, closed rules can induce committee specialization. However, when information is policy-specific, open rules are actually superior for inducing specialization. The reason for this surprising result is that a committee lacking formal agenda power has an incentive to exercise informal agenda power by exerting costly effort to generate high-valence legislation.

Francesco Squintani

 

Mediation and Peace

(Joint work with Johannes Horner, Massimo Morelli)

This paper brings mechanism design to the study of conflict resolution in international relations. We determine when and how unmediated communication and mediation reduce the ex-ante probability of conflict, in a simple game where conflict is due to asymmetric information. Unmediated communication helps reducing the chance of conflict as it allows conflicting parties to reveal their types and establish type-dependent transfers to avoid conflict. Mediation improves upon unmediated communication when the intensity of conflict is high, or when the chance of power disparity among the players is higher. The mediator improves upon unmediated communication by not precisely reporting information to conflicting parties, and precisely, by not revealing to a player with probability one that the opponent is weak. Surprisingly, in our set up, mediators who can enforce settlements are no more effective in reducing the probability of conflict than mediators who can only make non-binding recommendations.

Yi Zhang

Singapore Management University

Group Reputation -- A Model of Corruption

(Joint work with Huan Wang)

We explore what group reputation is and model its formation and evolution. Based solely on group signals, we define a player's group reputation as the belief that others have about the characteristics of the player's group. A player's individual reputation is derived from his group reputation by adding individual signals. A model of group reputation of civil servants is constructed to characterize the strategic behavior of potential bribers and civil servants, the corresponding levels of corruption, possible anti-corruption policies, and the effects of these policies.