Research

Abstract: In this study, we construct a stylized model of probabilistic voting with the primary objective of examining political rents (referred to as corruption). Our analysis, both theoretical and empirical, investigates how corruption responds to a variety of institutional and behavioural factors. We pay special attention to several key influences: the rules governing power-sharing, the remuneration received by politicians, the effectiveness of the judicial system, the level of transparency (specifically, the availability of public information on corruption), the partisan preferences of voters, and the degree to which the electorate penalize the misuse of political power for illegitimate personal gain. Our findings offer valuable insights into the complex interplay between these factors and corruption. This research, therefore, contributes to a deeper understanding of the mechanisms driving corruption and provides guidance for the formulation of policies aimed at reducing political rents and improving electoral accountability.

JEL Codes: C90, D72, D73.

Keywords: Corruption, Power-Sharing, Transparency, Voter Behaviour.

Abstract (en Español): En este estudio, construimos un modelo estilizado de votación probabilística con el objetivo principal de examinar las rentas políticas (referidas como corrupción). Nuestro análisis, tanto teórico como empírico, investiga cómo la corrupción responde a una variedad de factores institucionales y de comportamiento. Prestamos especial atención a varias influencias clave: las reglas que rigen el reparto de poder, la remuneración recibida por los políticos, la efectividad del sistema judicial, el nivel de transparencia (específicamente, la disponibilidad de información pública sobre corrupción), las preferencias partidistas de los votantes y el grado en que el electorado penaliza el mal uso del poder político para obtener ganancias personales ilegítimas. Nuestros hallazgos ofrecen valiosos conocimientos sobre la compleja interacción entre estos factores y la corrupción. Por lo tanto, esta investigación contribuye a una comprensión más profunda de los mecanismos que impulsan la corrupción y proporciona orientación para la formulación de políticas destinadas a reducir las rentas políticas y mejorar la responsabilidad electoral.

Abstract: Despite the empirical support for other-regarding behaviour in humans, spatial voting theory has largely overlooked the role of social preferences. This work takes the perspective that individuals not only harbour selfish preferences regarding material possessions, but also experience emotions such as envy and guilt regarding the possessions of others. By exploring how these emotions, manifested as inequity aversion, shape collective decision-making, this research deviates from the predominant focus on self-interest. Instead, it delves into the influence of guilt and envy on distributive politics, proposing two sensible constraints on these emotions, called limited and chained other-regardingness. These domain conditions on social preferences are aligned with the empirical estimates of inequity aversion; and they aim to ensure the stability (non-emptiness), uniqueness, and fairness of the majority-rule core.

JEL Classification Codes: D70, D71, D91.

Key Words: Inequity Aversion; Majority Rule; Core; Egalitarianism; Other-Regard.

Presentation Slides: PET 2024, Lyon & SCW 2024, Paris

Abstract (en español): A pesar del apoyo empírico para el comportamiento considerado hacia los demás en los humanos, la teoría del voto espacial ha pasado por alto en gran medida el papel de las preferencias sociales. Este trabajo adopta la perspectiva de que los individuos no solo albergan preferencias egoístas con respecto a las posesiones materiales, sino que también experimentan emociones como la envidia y la culpa con respecto a las posesiones de los demás. Al explorar cómo estas emociones, manifestadas como aversión a la inequidad, dan forma a la toma de decisiones colectiva, esta investigación se desvía del enfoque predominante en el interés propio. En cambio, se adentra en la influencia de la culpa y la envidia en la política distributiva, proponiendo dos restricciones sensatas sobre estas emociones, llamadas consideración limitada y encadenada hacia los demás. Estas condiciones de dominio sobre las preferencias sociales están alineadas con las estimaciones empíricas de la aversión a la inequidad; y su objetivo es garantizar la estabilidad (no vacuidad), la singularidad y la equidad del núcleo de la regla de la mayoría.

Abstract: In online social networks, social information, i.e., content generated and shared by users (e.g., past purchases), can be a substitute for sponsored advertising, which constitutes the network's main source of revenue. When will social information be let to spread freely over the platform? We show that the answer depends on consumers’ effective response to advertising, which is determined by: (i) how many times customers search different products, and (ii) how persuadable they are to sample and try the advertised goods. When the effective response to advertising is greater for ‘late movers’, social information becomes a complement of advertising to rise product awareness, and there is full social information disclosure. Otherwise, social information is seen as a substitute or rival of paid ad, and it is suppressed, reducing consumers' probability of buying the high-quality good, increasing their search costs, and diminishing consequently social welfare.

JEL Classification Codes: L00, L80, M37.

Key Words: Online social networks; Social information; Advertising; Consumer search.

• Slides from the  Athens EARIE 2018 Conference (old version of the paper).

• A previous version circulated under the title "Social Information Management" (September 10, 2018). Available at SSRN: http://dx.doi.org/10.2139/ssrn.3246956.

Abstract: We analyse a political competition model of redistributive policies. We provide an equilibrium existence result and a full characterization of the net transfers to the different income groups. We also derive several testable predictions about the way in which the net group transfers and the after-tax Gini coefficient vary with the main parameters of the model. In accordance with the theory, the empirical evidence from a sample of developed and developing democracies supports a highly statistically significant association between: (i) the net group transfer and the gap between the population and the group mean initial income, and (ii) the net group transfer (and resp., the Gini coefficient) and power sharing disproportionality. In addition, the data also provide some empirical evidence confirming a significant relationship between the net transfers to the poor (and resp., the Gini) and the concern of the political parties with income inequality.

JEL Classification Codes: C72, D72, D78.

Key Words: Redistribution; Inequality Concern; Partisanship; Electoral Rules; Power Sharing; Income Inequality.

• Supplementary material available in the Online  Appendix

• Slides from the SAET 2016 presentation (old version of the paper)

• A previous version circulated with the title "Redistributive Politics, Power Sharing and Fairness", Luxembourg Income Study Working Paper Series, No 681, 2016

Abstract: This paper analyses a non-smooth model of probabilistic voting with two parties and a broad family of other-regarding behaviour, including fairness and quasi-maximin preferences, income-dependent altruism, and inequity aversion. The paper provides conditions for equilibrium existence and uniqueness. It also characterizes the Nash equilibrium in pure strategies when parties hold either symmetric payoffs, or minor forms of asymmetries. The characterization shows that the two parties converge to an equilibrium policy that maximizes a mixture of a "self-regarding utilitarian" social welfare function and an aggregate of society's other-regarding preferences. These results are shown to be applicable to other non-smooth frameworks, such as probabilistic voting with loss averse voters. The characterization also shows that the direction and the size of the inefficiencies emerging from electoral competition depend in a subtle way on the nature of the other-regarding preferences (and resp., loss aversion).

JEL Classification Codes: C72, D72, D78.

Key Words: Non-smooth Optimization; Probabilistic Voting; Other-Regarding Preferences; Loss Aversion; Redistribution; Swing Voter.

• Slides from the Online SCW Seminars presentation (May 11, 2021)

Abstract: We consider the problem of identifying members of a group based on individual opinions. Since agents do not have preferences in the model, properties of rules that concern preferences (e.g., strategy-proofness and efficiency) have not been studied in the literature. We fill this gap by working with a class of incomplete preferences derived directly from opinions. Our main result characterizes a new family of group identification rules, called voting-by-equitable-committees rules, using two well-known properties: strategy-proofness and equal treatment of equals. Our family contains as a special case the consent rules (Samet and Schmeidler, "Between liberalism and democracy", Journal of Economic Theory, 110(2), 2003), which are symmetric and embody various degrees of liberalism and democracy; and it also includes dictatorial and oligarchic rules that value agents' opinions differently. In the presence of strategy-proofness, efficiency turns out to be equivalent to non-degeneracy (i.e., any agent may potentially be included or excluded from the group). This implies that a rule satisfies strategy-proofness, efficiency, and equal treatment of equals if, and only if, it is a non-degenerate voting-by-equitable-committees rule.

JEL Classification Codes: C70, D70, D71.

Key Words: group identification; strategy-proofness; equal treatment of equals; symmetry; efficiency; voting-by-committees rules; consent rules.

• Slides from the ESWC 2015 presentation

• A previous version circulated with the title "Incentives, Fairness, and Efficiency in Group Identification", Discussion Paper EDP-1501, University of Manchester, 2015

• Supplementary material available in the Online Appendix

Abstract: We study a social choice model with partially honest agents, and we show that strategy-proofness is a necessary and sufficient condition to achieve secure implementation. This result provides a behavioural foundation for the rectangularity property; and it offers as a by-product a revelation principle for secure implementation with partial honesty. We apply the implementation concept to a single-crossing voting environment, and we prove that it characterizes, in combination with unanimity, the family of augmented representative voter schemes.