Voter turnout and government's legitimate mandate

The paper studies a group-mobilization model of costly voting in which citizens care about the legitimate mandate of the government formed by the winning group. This, as a function of the electorate's voting behavior, depends on both the margin of victory and the total turnout rate. Citizens prefer a high mandate when their own group forms the government but a low one if the government is formed by an opposing group. As such, the eventual losing group faces a trade-off: a higher participation from its members decreases the margin of victory but increases the total turnout. In equilibrium, a second fundamental trade-off arises, which overturns the supposed positive relationship between turnout and mandate: as the total turnout becomes more important for the government's mandate, the first decreases but the second strengthens. The key mechanism at play is a shift in the relative participation of the two groups, which favors the majority and raises its margin of victory, thus yielding a bandwagon effect. The implications for the evolution of turnout and the occurrence of election boycotts are discussed.     

Complex ballot propositions,individual voting behavior,and status quo bias

One concern about direct democracy is that citizens may not be sufficiently competent to decide about complex policies. This may lead to exaggerated conservatism in the voting decision (status quo bias). To investigate how complexity affects individual voting behavior, we develop a novel measure of proposition complexity (using official pre-referendum booklets) and combine it with post-referendum survey data from Switzerland. Using Heckman selection estimations to account for endogenous variation in participation rates, we find that an increase in proposition complexity from the 10th to the 90th percentile would decrease voters' approval by 5.6 ppts, which is often decisive: an additional 12% of the propositions in our sample would be rejected.     

Compulsory versus voluntary voting: An experimental study

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

SEQUENTIAL VOTING WHEN LONG ELECTIONS ARE COSTLY

This paper analyzes sequential voting in binary elections when voters are motivated by a desire both to elect their preferred candidate and to avoid a long and costly election. I find a unique equilibrium in which a voter's action depends both on the intensity of the voter's preferences as well as how well the candidates have done in earlier voting rounds. This equilibrium results in momentum in which voters are more likely to vote for the candidate currently in the lead. Furthermore, the probability a voter votes for a candidate is increasing in the size of the candidate's lead. As a consequence, a candidate is more likely to win the election if the candidate's stronger supporters vote earlier in the election.     

Bankruptcy voting process and corporate reorganization

This study investigates the main legal determinants of corporate reorganization use. Three legal aspects of bankruptcy voting process were examined, such as the voting right of secured creditors (1), bankruptcy voting rule (2), and court's legal right to overrule creditors’ decision (3). Using a sample of 20 countries, our estimations confirm that granting a voting right to secured lenders tends to be associated with more corporate reorganizations. Secured creditors’ voting right may send a signal about firm's capacity to recover from financial distress. Such signal can encourage unsecured creditors to support the reorganization plan.     

CANDIDATE VALENCE: EVIDENCE FROM CONSECUTIVE PRESIDENTIAL ELECTIONS*

This article develops and estimates a dynamic spatial model of voting. The distribution of voters' policy positions and candidates' valence are recovered using individual‐level data on voting decisions in two consecutive presidential elections. The estimated model is used to provide an equilibrium interpretation of observed individual voting profiles and aggregate electoral outcomes as well as to conduct counterfactual experiments that assess the impact of candidates' policy positions, valence, and voters' information on electoral outcomes.     

AN EXPERIMENTAL STUDY OF UNCERTAINTY IN COORDINATION GAMES

Global games and Poisson games have been proposed to address equilibrium indeterminacy in Common Knowledge Coordination games. The present study investigates in a controlled setup, using as controls Common Knowledge games, whether idiosyncratic uncertainty about economic fundamentals (Global games) or uncertainty about the number of actual players (Poisson games) may influence subjects' behavior. We find that uncertainty about the number of actual players has more influence on subjects' behavior than idiosyncratic uncertainty about economic fundamentals. Furthermore, subjects' behavior under Poisson population‐size uncertainty is closer to the respective theoretical prediction than subjects' behavior under idiosyncratic uncertainty about economic fundamentals.     

The equivalence between costly and probabilistic voting models

In costly voting models, voters abstain when a stochastic cost of voting exceeds the benefit from voting. In probabilistic voting models, they always vote for a candidate who generates the highest utility, which is subject to random shocks. We prove an equivalence result: In two-candidate elections, given any costly voting model, there exists a probabilistic voting model that generates winning probabilities identical to those in the former model for any policy announcements, and vice versa. Thus many predictions of interest established in one of the models hold in the other as well, providing robustness of the conclusions to model specifications.     

Mecro‐Economic Voting: Local Information and Micro‐Perceptions of the Macro‐Economy

We develop an incomplete information theory of economic voting, where voters' information about macro‐economic performance is determined by the economic conditions of people similar to themselves. We test our theory using both cross‐sectional and time‐series survey data. A novel survey instrument that asks respondents their numerical assessment of the unemployment rate confirms that individuals' economic information responds to the economic conditions of people similar to themselves. Furthermore, these assessments are correlated with individuals' vote choices. We also show in time‐series data that state unemployment robustly correlates with evaluations of national economic conditions, and presidential support.     

The feasibility of low inflation: theory with an application to the argentine case

In this paper we review the Argentine experience of hyperinflation, concentrating on understanding why stabilization took so long, and was only implemented by the most unlikely candidate. To explain these facts we present a voting model in which politicians' actions transmit information about the state of the economy and thus shape voters' behavior. We discuss the implications of the model for countries which are going through the same instability that characterized Argentina in the late 80s.     

Approval voting with endogenous candidates

We present a formal model of political competition under approval voting which allows for endogenous candidate entry. Our analysis yields a number of novel insights. First, we develop a notion of sincere voting behavior under approval voting, called relative sincerity. We then show that the relatively sincere voting behavior is consistent with the strategic calculus of voting. Second, we show that in a one-dimensional model with distance preferences, equilibria in relatively sincere strategies and without spoiler candidates always generate outcomes close to the median voter. Moreover, approval voting satisfies Duverger's Law in the sense that there are at most two winning positions! Finally, we extend our analysis to arbitrary policy spaces. In the general setting, approval voting is shown to be susceptible to the same kinds of problems as the plurality rule, such as the possibility of non-majoritarian outcomes, failure to elect the Condorcet winner and existence of spoiler candidates.     

Information and strategic voting

We theoretically and experimentally study voter behavior in a setting characterized by plurality rule and mandatory voting. Voters choose from three options. We are interested in the occurrence of strategic voting in an environment where Condorcet cycles may occur and focus on how information about the preference distribution affects strategic behavior. We also vary the relative importance of the second preferred option. Quantal response equilibrium analysis is used to analyze the game and derive predictions. Our results indeed show that strategic voting arises. Its extent depends on (i) information availability; (ii) the relative importance of the intermediate candidate; (iii) the electorate’s relative support for one’s preferred candidate; (iv) the relative position of the plurality-supported candidate in one’s preference ordering. Our results show that information serves as a coordination device where strategic voting does not harm the plurality-preferred candidate’s chances of winning.     

Protecting Minorities through the Average Voting Rule

In the average voting rule, the outcome is some weighted average of votes. The unique average voting outcome is characterized by a median formula, which depends on voters' preferred allocations and some parameters constructed from voters' weights. A minority is said to be protected by a switch in voting rule if the outcome becomes closer to the median bliss point of the minority. Sufficient conditions for minority protection are that, either the minority's weight is sufficiently large or the majority outcome is too unfavorable to the minority. Applications to the composition of public goods and to public expenditures level are considered. We explore the combined use of average and majority voting in a two‐stage procedure for determining the level and the composition of public expenditures.     

Electoral fraud and voter turnout: An experimental study

In this paper we experimentally investigate the consequences of electoral fraud on voter turnout. The experiment is based on a strategic binary voting model where voters decide whether to cast a costly vote in favour of their preferred candidate or to abstain. The electoral process is illicitly influenced by applying ballot-box stuffing. In the experiment we implement two different framings: we compare voter turnout in a neutral environment and with framed instructions to explicitly replicate elections. This approach enables us to both test the model's predictions and to estimate the framing effects of voting and fraud. Comparison of experimental results with theoretical predictions reveals over-voting, which is exacerbated when fraud occurs. Turnout increases as predicted with a moderate level of fraud while, with higher levels of electoral fraud, voters fail to recognize that the existence of a relatively larger number of “agents” voting with certainty considerably decreases the benefits of voting. Importantly, framing matters, as revealed by the higher turnout of those in the majority group, against which the fraud is applied.     

Welfare Reducing Polls

We study costly majority voting when voters rationally anticipate others have similar preferences. The correlation in preferences lowers expected turnout because votes have a positive externality on those who abstain. We study the effects of the public release of information (polls) on participation levels. Polls raise expected turnout but reduce expected welfare because they stimulate the “wrong” group to participate resulting in a “toss-up” election. Our novel results highlight the adverse effects of providing information about the electorate’s preferences and may explain why some countries bar opinion polls close to an election date.     

How the source of the entrant's advantage limits entry‐deterring tying

I revisit a simple model of entry‐deterring tying—example 1 from Whinston's (1990) seminal paper—but allow the potential entrant to have either a cost advantage or a willingness‐to‐pay (WTP) advantage relative to the incumbent. I show that, compared to the usual case in which the potential entrant is cost‐advantaged, tying is less effective against an entrant with a WTP advantage because an entrant with a large WTP advantage may be able to induce the buyer to buy both the tied bundle and the entrant's product. I also show that tying but failing to deter entry can be less costly when facing an entrant with a WTP advantage than when facing an entrant with a cost advantage. For a firm facing uncertainty about, for example, the entrant's entry costs, this makes tying a more attractive entry deterrence strategy against a WTP‐advantaged entrant. These results shed light on the important policy question of which markets are most likely to be susceptible to entry‐deterring tying.     

Subjective well‐being and political participation: Empirical evidence from Ghana

A large, extant literature examines the effect of political factors on individual subjective well‐being. These studies have treated political factors as a cause and subjective well‐being as an effect. A sparse but growing literature now advances the argument that subjective well‐being is a cause and voting or political participation an effect. In this paper we examine whether subjective well‐being influences voting and political participation in Ghana. Using data from Wave 6 of the World Values Survey in Ghana, we find that subjective well‐being influences neither voting nor protest behavior.     

Committees and Special Interests

This paper studies the aggregation of decentralized information in committees under open and closed voting in the presence of external influence. We show that under one‐sided influence decision quality may be nonmonotonic in the committee members' ability. Furthermore, restricting the information of interest groups may reduce the bias toward special interest politics. This result holds in a single and in a common agency setting, where opposing interest groups' activities do not cancel out in equilibrium. Moreover, there are cases where benefits from increasing the number of decision makers can only be reaped if the committee's sessions are not public.     

Minority positions in the German Council of Economic Experts: A political economic analysis

I study diversity in views expressed by economists regarding appropriate economic policies. The dataset is for voting by economists on the German Council of Economic Experts, over the period 1971–2011. The results show that the best predictor of minority voting is having been nominated by the trade unions, which results in being some 70 percentage points more likely to vote against the majority opinion. The voting pattern confirms that ideological identity through the channel of political appointment influences economists' voting behavior.     

A GOOD ADVISOR

Effective education requires strategic consideration. If students doubt the motives of teachers and advisors, then students rationally ignore the advice they receive. Valuable information is lost in such bad communication outcomes and, consequently, the quality of education suffers. In this paper, we argue that an advisor's sacrifice is an essential virtue of a good advisor for efficient communication between an advisor and a student. We model the relation between them as a signaling game. We find a separating equilibrium in which a good advisor (whose objective function truly coincides with the student's own objective function) makes a costly sacrifice that causes the student to believe what the advisor says, while a non‐good advisor (whose objective does not coincide with the student's) chooses not to make the costly sacrifice and, consequently, the student completely ignores the advisor. In fact, it turns out to be the unique equilibrium that survives the Intuitive Criterion. The model demonstrates the importance of making students aware of those aspects of the advisor's objectives that students may not realize are closely aligned with their own (e.g., the extent to which an advisor cares about students' academic and professional trajectories as evaluated by students themselves).