Econ361W16

Course Description: This course is an introduction to current research in political economics. The emphasis is on game-theoretic models that can be used to study the effects of different constitutional structures on the competitive behavior of politicians and the welfare-relevant performance of government. Strudents who take the course for credit will be required to present a paper from the reading list. Students can sign up for which date to present here. Please discuss with at least one of the instructors the paper you intend to present beforehand and co-ordinate with your fellow presenter to ensure that each student presents a different paper. The sign-up sheet for presentations is available here.

Class Schedule: Winter 2016. TR 9:00-10:20 in SHFE 103.

Instructors: Roger Myerson and Richard Van Weelden

Course Outline

Social Choice and the Spatial Models

1. (1/05/16) The Median Voter Theorem and Probabilistic Voting:

• Myerson, Sections 7-8.

• Randall Calvert 1985. "Robustness of the Multidimensional Voting Model: Candidate Motivations, Uncertainty, and Convergence." American Journal of Political Science 29 (1):69-95.

• Assar Lindbeck and Jorgen Weibull 1993. "A Model of Political Equilibrium in a Representative Democracy." Journal of Public Economics 51 (2):195-209.

• Dan Bernhardt, John Duggan, and Francesco Squintani 2009. "The Case for Responsible Parties." American Political Science Review 103 (4): 570-587.

2. (1/07/16) Muller-Sattherwaite/Binary Agendas:

• Roger Myerson. 2013. "Fundamentals of social choice theory." Quarterly Journal of Political Science 8 (3): 305-337.

3. (1/12/16) Candidates:

• Timothy Besley and Stephen Coate 1997. "An Economic Model of Representative Democracy." Quarterly Journal of Economics 112 (1): 85-114.

• Martin Osborne and Al Slivinkski 1996. “A Model of Political Competition with Citizen Candidates.” Quarterly Journal of Economics 111 (1): 65-96.

• Navin Kartik and Preston McAfee. 2007. "Signaling Character in Electoral Competition." American Economic Review 97 (3): 852-870.

• Steven Callander 2008. "Political Motivations." Review of Economic Studies 75 (3):671-697.

4. (1/14/16) Valence Models:

• Enriqueta Aragones and Thomas R. Palfrey 2002. "Mixed Equilibrium in a Downsian Model with a Favored Candidate." Journal of Economic Theory 103 (1): 131-161.

• Timothy Groseclose 2001. "A Model of Candidate Location When One Candidate Has a Valence Advantage." American Journal of Political Science 45 (4): 862-886.

• Juan Carillo and Micael Castanheira 2008. "Information and Strategic Political Polarisation." Economic Journal 118: 847-874.

• Stefan Krasa and Mattias Polborn 2010. "Competition Between Specialized Candidates." American Political Science Review 104 (4): 745-765.

Agency Models of Elections

5. (1/19/16) Pure Moral Hazard

• John Ferejohn 1986. "Incumbent Performance and Electoral Control." Public Choice 50: 5-26.

• David Austen-Smith and Jeffrey Banks 1989. "Electoral Accountability and Incumbency." In Peter Ordeshook [ed.] Models of Strategic Choice in Politics (Ann Arbor: University of Michigan Press).

• Jeffrey S. Banks and Rangarajan K. Sundaram 1998. "Optimal Retention in Agency Problems." Journal of Economic Theory 82 (2): 293-323.

• Kenneth Rogoff and Anne Sibert 1988. "Elections and Macroeconomic Policy Cycles." Review of Economic Studies 55 (1): 1-16.

6. (1/21/16) Ideological Competition and Agency Models:

• John Duggan 2000. “Repeated Elections with Asymmetric Information.” Economics and Politics 12 (2): 109-135.

• Dan Bernhardt, Larissa Campuazano, Odilon Camara, and Francesco Squintanti 2009. “On the Benefits of Party Competition.” Games and Economic Behavior 66 (2): 685-707.

• Dan Bernhardt, Odilon Camara, and Francesco Squintani 2011. “Competence and Ideology.” Review of Economic Studies 78 (2): 487-522.

• Richard Van Weelden 2013. “Candidates, Credibility, and Re-election Incentives.” Review of Economic Studies 80 (4): 1622-1651.

7. (1/26/16) Lobbying and Common Agency:

• Avinash Dixit, Gene Grossman, and Elhanan Helpman 1997. "Common Agency and Coordination: General Theory and Applications to Government Policymaking." Journal of Political Economy 105 (4): 752-769.

• Gene Grossman and Elhanan Helpman 1996. "Electoral Competition and Special Interest Politics." Review of Economic Studies 63 (2): 265-286.

• Andrea Prat 2002. "Campaign Spending with Office-Seeking Politicians, Rational Voters, and Multiple Lobbies." Journal of Economic Theory 103 (1):169-189.

• Ernesto Dal Bo, Pedro Dal Bo, and Raphael DiTella 2006. “Plata o Plomo:Bribe and Punishment in a Theory of Political Influence.” American Political Science Review 100 (1): 41-53.

• Bard Harstad and Jakob Svensson 2011. "Bribes, Lobbying, and Development." American Political Science Review 105(01): 46-63.

Voting

8. (1/28/16) Information Aggregation and the Swing Voter's Curse:

• Timothy Feddersen and Wolfgang Pesendorfer 1996. "The Swing Voter's Curse." American Economic Review 86 (3): 408-424.

• Timothy Feddersen and Wolfgang Pesendorfer 1997. "Voting Behavior and Information Aggregation in Elections with Private Information." Econometrica 65 (5):1029-1058.

• Roger Myerson 1998. "Extended Poisson Games and the Condorcet Jury Theorem." Games and Economic Behavior 25 (1):111-131.

• Laurent Bouton and Micael Castanheira 2010. "One Person, Many Votes: Divided Majority and Information Aggregation." Econometrica 80 (1): 43-87.

9. (2/2/16) Turnout:

• Martin Osborne, Jeffrey Rosenthal, and Matthew Turner 2000. "Meetings with Costly Participation." American Economic Review 90 (4): 927-943.

• Tim Feddersen and Aldo Sandroni 2006. “A Theory of Participation in Large Elections.” American Economic Review 96 (4): 1271-1282.

• Vijay Krishna and John Morgan 2011. “Overcoming Ideological Bias In Elections.” Journal of Political Economy 119 (2): 183-211.

• Helios Herrera, Massimo Morelli and Tom Palfrey 2014. “Turnout and Power Sharing.” Economic Journal, 154 (574): 131-162.

Comparative Electoral Systems

10. (2/4/14) Electoral Outcomes under Different Electoral Systems:

• Roger Myerson 1993. "Incentives to Cultivate Favored Minorities under Alternative Electoral Systems." American Political Science Review 87 (4): 856-869.

• Alessandro Lizzeri and Niccolo Persico 2001. “The Provision of Public Goods under Alternative Electoral Incentives.” American Economic Review 91 (1): 225-239.

• Gary Cox 1987. "Electoral Equilibria Under Alternative Voting Institutions." American Journal of Political Science 31 (1): 82-108.

• Gary Cox 1994. "Strategic Voting Equilibria under Single Non-Transferable Vote." American Political Science Review 88 (3): 608-621.

• Roger Myerson 2006. "Bipolar Multicandidate Elections with Corruption." Scandinavian Journal of Economics 108 (4): 727-742.

11. (2/9/16) Federalism:

• Dennis Epple and Allan Zelenitz 1981. "The Implications of Competition among Jurisdictions: Does Tiebout Need Politics?" Journal of Political Economy 89 (6): 1197-1217.

• Avinash Dixit and John Londregan 1998. "Fiscal Federalism and Redistributive Politics." Journal of Public Economics 68 (2): 153-180.

• Tim Besley and Stephen Coate 2003. "Centralized versus Decentralized Provision of Local Public Goods." Journal of Public Economics 87 (12): 2611-2637.

• Roger Myerson 2006. "Federalism and Incentives for Success of Democracy." Quarterly Journal of Political Science 1 (1): 3-23.

• Steven Callander and Bard Harstad 2015. "Experimentation in Federal Systems." Quarterly Journal of Economics, forthcoming.

Communication and Organizational Structure

13. (2/11/16) Pandering:

• Eric Maskin and Jean Tirole 2004. "The Politician and the Judge: Accountability in Government." American Economic Review 94 (4): 1034-1054.

• Brandice Canes-Wrone, Michael C. Herron and Kenneth W. Shotts 2001. "Leadership and Pandering: A Theory of Executive Policymaking." American Journal of Political Science 45 (3): 532-550.

• Gilat Levy 2004. “Anti-herding and Strategic Consultation.” European Economic Review 48 (3): 503-525.

• Matthew Gentzkow and Jesse Shapiro. 2006. "Media Bias and Reputation." Journal of Political Economy 114 (2): 280-316.

• Justin Fox and Richard Van Weelden 2010. "Partisanship and the Effectiveness of Oversight." Journal of Public Economics. 94 (9-10): 684-697.

• Daron Acemoglu, Georgy Egorov and Konstantin Sonin 2013. "A Political Theory of Populism." Quarterly Journal of Economics 128 (2): 771-805.