Working papers

The Political Economy of Alternative Realities (with Adam Szeidl), R&R at the American Economic Review

We build a model in which a politician can persuade voters of a false alternative reality that serves to discredit the intellectual elite. In the alternative reality, elite members conspire to criticize the competence of a politician whose ideology they dislike. If believed, the alternative reality inverts the effect of the elite's message, so that criticism helps the politician. This force leads to reduced accountability, distrust in experts, and bad policies that invite elite criticism. Alternative realities feature conspiracies which solve a collective action problem, evolve in response to evidence, and create demand for new media that reinforce them.

Forthcoming or Published Papers

Equilibrium communication in political scandals (with Bence Hamrak and Gabor Simonovits), European Journal of Political Economy, accepted June 2024

Discretion and Favoritism in Public Procurement, Journal of the European Economic Association, Vol. 22, No. 1 (February, 2024), 117-160. Online appendix

Algorithmic Selection and Quality of Political News on Facebook (with Marcel Garz) , Information Economics and Policy, 62 (March 2023): 101020. 

Media Capture through Favor Exchange  (with Adam Szeidl), Econometrica, Vol. 89, No. 1 (January, 2021), 281–310. Online appendix 

Book chapters

Media capture and belief in alternative realities, in Razin, A (eds), The Transition to Illiberal Democracy Economic Drivers and Consequences, CEPR Press, Paris & London. 2024 

Work in progress

Facing the Hard Truth: Evidence from Climate Change Ignorance (with Pamela Campa)

Public ignorance around climate change remains high in many countries, including the United States, where in 2019 only 67% of adults reported to believe that global warming is happening. In this paper, we show that information avoidance aimed at protecting identity contributes to explaining climate ignorance. Exploiting mass layoffs of coal miners in the US and a difference-in-differences design we find that climate ignorance shrinks less in counties affected by the layoffs as compared to other coal-mining counties. An instrumental variable strategy that uses geographic variation in gas prices to predict mine closures strongly suggests that layoffs causally impact beliefs about climate change. We also employ a triple difference-in-differences strategy that compares layoffs from coal and metal mines to understand the underlying causes of persistent climate change ignorance in communities experiencing layoffs. Our triple difference results confirm that information avoidance is specific to coal-mining communities suggesting that protecting identity plays an important role.  

What's going on in the smoke-filled room? Political Motives in the Monopolization of Hungarian Tobacco Shops 

I present evidence on political motivations behind the monopolization of tobacco retail market in Hungary. I show that local politicians aligned with the government had a higher chance to obtain tobacco licenses than their opposition counterparts. To rule out productivity explanations, I compare this premium to a non-regulated benchmark. I also provide evidence on the importance of mayors in mobilizing voters for parliamentary elections. These two results together suggest that favor exchange exists between central and local politicians, where the central government creates rents for its local supporters to incentivize campaigning efforts. 

Welfare costs of misallocating government contracts (with Miklos Koren, Adam Szeidl, and Balazs Vedres)