Previous title: More Public Goods, Larger Government, and More Redistribution

Abstract. This study uncovers a novel effect of public goods on inequality through public opinions. We hypothesize that people are more likely to support a tax increase after realizing the benefit from public goods, helping to reduce inequality by expanding government size. We conducted an online survey wherein the treatment group was informed about the universal benefits of public goods. We found that although the treatment substantially enhances support for a larger government, its impact on desired tax and spending progressivity is limited. Thus, increased perceived benefits might allow government to politically achieve redistribution through size expansion without reducing policy progressivity.

Abstract. Special interest politics has been shown to undermine political trust, but little is known about how political trust affects special interest politics. In this study, we construct a static electoral competition model where two candidates propose policy platforms and an interest group determines the number of campaign contributions for each candidate. We demonstrate that a high level of political trust enables the interest group to capture politicians in the election, creating a dynamic dilemma of political trust. This dilemma arises because political trust undermines future democratic performance while pointing to high past performance. We extend the model to a dynamic one with short-lived players and find that this dilemma leads to endogenous cycles of political trust and special interest politics when the misalignment of policy preferences between voters and the interest group is severe. Political trust is accumulated, consumed, and restored following cycles of special interest politics.

Abstract. Mass media is expected to deliver neutral news as a watchdog over people in power. However, to obtain accurate information, the media often relies on people in power who serve as a news source, creating a tension between the neutrality of news and the accuracy of collected information.  To examine the quality of watchdog journalism, we present a model of media bias in which a news source decides whether to grant information access to each media outlet. We show that the presence of a news source does not distort the editorial policy of a monopoly media outlet but does so when duopoly outlets compete to attract consumers. Competing media outlets determine whether to be watchdogs or yes men by choosing random editorial policies distributed over two distinct segments of small and large pro-source biases. Yes men, which arise as an equilibrium outcome, can make the presence of a news source harmful to consumers. 

Previous title: Straegic Misinformation: The Role of Heterogeneous Confirmation Bias

Abstract. This study investigates politicians' incentive to promote false claims supported by only a minority of the electorate and its impact on representative democracy. For this purpose, we construct a two-period electoral accountability model where an incumbent politician decides whether to support or deny the truth about a particular issue and exerts effort to produce public goods. We find that a low-competent incumbent has an electoral incentive to support misinformation, even if only a minority of voters believe in it. The key to this incentive is the heterogeneity of confirmation bias that leads people to persistently accept misinformation. When the degree of confirmation bias is heterogeneous among voters, promoting misinformation enables the incumbent to weaken the role of elections as a device for punishing the incumbent's low performance. Hence, to avoid electoral punishment, low-competent politicians may strategically deny the truth, which also reduces their effort level as a side effect. Moreover, we argue that social media platforms amplify the heterogeneity of confirmation bias, thereby inducing politicians' misinformation.

Abstract. The rapid aging of the population has presented a growing challenge to public health care systems. To ensure their sustainability, governments must persuade their citizens to accept a larger burden, which is an uneasy task. This study seeks to explore whether informing the self-benefits from the health care system could be a solution. We first constructed a two-period overlapping generations model and hypothesized that doing so could facilitate political support for larger social security contributions, but this effect is reduced when people have a concern about fiscal sustainability due to population aging. To test these hypotheses, we conducted an online survey experiment in Japan, where the treatment group was informed of their self-benefits from the public health care system. We found that the treatment had no effect on average, but it augmented support for a larger burden among respondents who were unaware of fiscal unsustainability. Furthermore, this positive effect on optimistic respondents was reduced once they were informed of the fiscal risks. Moreover, we analyzed the heterogeneity of the treatment effects depending on time and risk preferences.

Abstract. This study reveals that the interaction between tax competition and the political overrepresentation of the rich can collectively impede redistribution in response to rising inequality.  We develop a capital tax competition model between countries, each comprising two distinct classes: rich and poor. An income bias in political attention creates an overrepresentation of the rich in each country. First, we show that tax competition diminishes the political attention of the poor, amplifying the rich’s political influence. Hence, tax competition reduces capital taxation not only through conventional economic channels but also by altering political power in favor of the rich. Remarkably, from a global perspective, the attention of the poor is underprovided for their benefit. Second, rising inequality encourages the poor to pay attention to politics, thereby increasing capital taxation. However, we show that tax competition weakens this mechanism; thus, increasing inequality in tax competition is more likely to lead to reduced capital taxation than in a closed economy.

Abstract. In spite of a rapid increase in inequality, the size of redistribution does not necessarily expand. We address this paradox by emphasizing the effect of inequality on the acceptance of conspiracy theories. For this purpose, we develop an electoral competition model in which voters are divided into rich and poor. Each voter forms beliefs in conspiracy theories by considering the trade-off between maintaining their self-image and forming accurate beliefs. We show that greater inequality leads the poor to believe more strongly in conspiracy theories. As a result, poor voters seek more reforms to defeat conspiracy rather than redistribution through income taxation. Therefore, a greater inequality reduces income taxation when the initial inequality is high and the distortion of taxation is large.

Abstract. Recently, some fringe candidates, previously dismissed, have seen unexpected surges in popularity. We explore this issue by focusing on the dynamic interplay between social norms and elections. For this purpose, we develop a two-period electoral competition model with a mainstream candidate and a fringe candidate. Because the fringe candidate claims an extreme view that contravenes prevailing social norms, voting for her incurs a stigma cost. We show that a sufficient vote share of the fringe candidate in the first period signals wider acceptance of the extreme view, eroding established norms even if the fringe candidate loses in the election. This triggers the rise of the fringe candidate in the second period. To induce the erosion of the social norm, the fringe candidate tries to differentiate from the mainstream candidate on standard policy issues, whereas the mainstream candidate imitates the fringe candidate. Furthermore, heightened social norms in the initial election might paradoxically enhance the success of the fringe candidate in a subsequent election.

Abstract. Due to the problem of misinformation, the public is advised to obtain information from reputable sources to avoid inaccurate news coverage (false positive errors). However, reputable sources might engage in selective reporting (false negative errors). We developed a concise model to explain why both inaccurate coverage and limited coverage should be considered if electors are to make an appropriate political decision. Then, we conducted a survey in Japan (𝑁 = 2020) to examine the hypotheses derived from the model. The results suggest that respondents perceive different types of media to vary in their likelihood of committing the two errors; these perceptions correlate with media consumption, and media literacy interventions do not change attitudes toward media consumption.