Revisiting the Relationship between Ethnic Diversity and Preferences for Redistribution: Comment

In this paper, we revisit the question raised in Dahlberg et al. ( 2012 , Journal of Political Economy 120, 41–76) concerning a causal relationship between ethnic diversity and preferences for redistribution. We find that their results are based on (i) an unreliable and potentially invalid measure of preferences for redistribution, (ii) an endogenously selected sample, and (iii) a mismeasurement of the refugee placement program. Correcting for any of these three problems reveals that there is no evidence of any relationship between ethnic diversity and preferences for redistribution. We also discuss what is currently known about the refugee placement program, and to what extent it can be used for estimating causal effects more generally.     

The influence of investment experience on market prices: laboratory evidence

We run laboratory experiments to analyze the impact of prior investment experience on price efficiency in asset markets. Before subjects enter the asset market they gain either no, positive, or negative investment experience in an investment game. To get a comprehensive picture about the role of experience we implement two asset market designs. One is prone to inefficient pricing, exhibiting bubble and crash patterns, while the other exhibits efficient pricing. We find that (i) both, positive and negative, experience gained in the investment game lead to efficient pricing in both market settings. Further, we show that (ii) the experience effect dominates potential effects triggered by positive and negative sentiment generated by the investment game. We conjecture that experiencing changing price paths in the investment game can create a higher sensibility on changing fundamentals (through higher salience) among subjects in the subsequently run asset market.     

Information Manipulation in Election Campaigns

We provide a game‐theoretical model of manipulative election campaigns with two political candidates and a Bayesian voter. The latter is uncertain about how good the candidates are. Candidates take unobservable, costly actions to manipulate voter's opinion about their positions. We show that if the candidates differ in campaigning efficiency, and the voter receives the biased campaign messages with some noise, then the cost‐efficient candidate can win the election with higher probability than her opponent even when she is ex‐post an inferior choice for the voter. Our paper offers a novel informational justification for imposing limits on campaign spending and encouraging diversity in the supply of political information.