PRUDENCE AND SUCCESS IN POLITICS |
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Authors: | OLIVIER CADOT BERNARD SINCLAIR-DESGAGNÉ |
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Institution: | INSEAD, Boulevard de Constance, 77305 Fontainebleau Cedex, France |
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Abstract: | The paper considers a repeated election game between an infinitely-lived representative voter and finitely-lived, heterogeneous politicians. The voter's prior belief about the incumbent's competency is updated during the incumbent's first term in office. The voter's problem is to find a rule that simultaneously selects and controls politicians. We show that the simple performance rule, standard in the literature, is justified as a time-consistent rule for a forward-looking voter. The outcome of a large class of perfect equilibria is "strategic caution": incumbent politicians slow down the voter's Bayesian learning by taking only weakly informative actions. |
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