The political economy setting of voting over general nonlinear income taxes with labor disincentives and information asymmetry in consumer/worker/voter types is considered. Agents do not communicate or coordinate with each other. The economy is the realization of a finite draw from a continuous distribution. The revenue required from a draw is determined by Pareto optimal provision of a public good for that draw. Assuming that the government must meet the revenue requirement for any possible draw, in other words the tax is robust, a majority rule equilibrium is shown to exist at the median voter’s preferred tax function out of this robust set. The key restrictions on utility are additive separability, quasi-linearity, and that utility from the public good is multiplicative in type.
This article examines, both theoretically and experimentally, the welfare implications of implementing symmetric bid caps in lobbying competitions. We model lobbying games as lottery contests with two radicals and one centrist, where all players strictly prefer to win. However, if they lose, radicals prefer to lose to a centrist rather than to the opposing radical. We establish the existence and uniqueness of equilibrium and find that, in the absence of a bid cap, radicals may bid aggressively enough to drive the centrist out of the competition, thereby preventing the social welfare-maximizing outcome. Consequently, implementing a bid cap enhances social welfare in two ways: it reduces aggregate expenditure and increases the likelihood of the centrist winning. Our experimental results qualitatively align with the theoretical predictions. However, we also identify and address notable behavioral patterns: in contrast to the vast experimental literature (Sheremeta, 2013) on contests, aggregate bids do not exceed theoretical predictions in all treatments.
We propose a model of electoral accountability, and we test it in a lab setting. As predicted by the model, moral incentives and the desire for reelection interact to deter politicians from accepting bribes early in their careers. Treatments with weaker reelection incentives perform worse in encouraging good initial behavior among politicians, but are more effective in promoting good behavior later on. The probability of voter errors and politicians' intrinsic motivation for good behavior in the final period vary across treatments, with opportunistic behavior being more prevalent in environments with stronger electoral incentives.
We experimentally study pork barrel politics in repeated two-candidate majoritarian elections with costly voting. Candidates form distinct supporter groups by favoring some voters in budget spending and ignoring others. Relative to compulsory voting, voluntary voting induces on average larger, more narrowly targeted favors and therefore more inequality among otherwise identical voters. Against our prediction, candidate participants tend to cultivate policy polarization by repeatedly favoring their exclusive supporters and avoiding those of the opponent. With compulsory voting, they tolerate some additional policy overlap for a separate subset of voters. Relating to theory, actual levels and patterns of voluntary turnout are well captured by quantal response equilibrium (QRE) for a noise parameter estimate external to our experiment. Importantly, and surprisingly, for reasonable assumption we find unique QRE solutions for our polity games, which include the policymaking stage and each of the many possible elections that can emerge from that stage.
Parties in primary elections often choose between candidates who appeal to their base and those who appeal to the broader electorate. I present a model of primaries where incumbents can exploit this trade-off the opposition faces between ideological congruence and electability. In the model, incumbents reduce their appeal to the median voter by moving away from the center. In doing so, they provoke the opposition into nominating extremists, improving their reelection prospects. This mechanism generates elite polarization as politicians leapfrog voters — not despite electoral concerns, but because of them. The analysis fits the observation that incumbents sometimes move away from the center near the end of their term. Provoking the opposition relies on two conditions: divergence of primary and general electorates and a limited set of potential nominees. I argue that partisan sorting and changes in nomination procedures over the last decades made this strategy viable.