When Are Stabilizations Delayed? Alesina-Drazen Revisited

In an influential article, Alesina and Drazen (1991) model delay of stabilization as the result of a struggle between political groups supporting reform plans with different distributional implications. In this paper we show that ex ante asymmetries in the costs of delay for the groups will reduce the probability of conflict and will lead to a shorter expected delay. Accurate common information about the cost of delay may lead to no delay at all. In an asymmetric conflict, a wider divergence in the distributional implications of reform will reduce the probability of conflict but will lead to a longer expected delay.Stabilization delay, economic reforms, war of attrition

Voting in Cartels: Theory and Evidence from the Shipping Industry

We examine the choice of voting rules by legal cartels with enforcement capabilities in the presence of uncertainty about demand and costs. We show that cartels face a trade-off between the commitment advantages of more stringent majority requirements and the loss of flexibility resulting from them. Expected heterogeneity in costs or demand conditions leads away from simple majority toward more stringent rules, while larger membership to the cartel leads away from unanimity toward less restrictive rules. Evidence from the shipping conferences of the late 1950s largely supports our model. With few firms, the rule favored by heterogeneous conferences is unanimity. In larger cartels, the favored rule is either 2/3 or 3/4-majority rule.

Rational Ignorance and Voting Behavior

We model a two-alternative election in which voters may acquire information about which is the best alternative for all voters. Voters differ in their cost of acquiring information. We show that as the number of voters increases, the fraction of voters who acquire information declines to zero. However, if the support of the cost distribution is not bounded away from zero, there is an equilibrium with some information acquisition for arbitrarily large electorates. This equilibrium dominates in terms of welfare any equilibrium without information acquisition--even though generally there is too little information acquisition with respect to an optimal strategy profile.

Elections as Targeting Contests

This paper develops a model of electoral turnout where parties compensate voters for showing up to the polls. Existence and uniqueness conditions are shown to impose substantial restrictions on the uncertainty about partisan support faced by the parties, and on the distribution of voting costs among citizens. The model predicts that voters in the minority will be more likely to vote, and that turnout increases with the importance of the election. The model can generate the observed correlation between election closeness and electoral turnout, lthough the cause of this correlation may depend on the distribution of voting costs.Elections

Simple Plurality versus Plurality Runoff with Privately Informed Voters

This paper compares two voting methods commonly used in presidential elections: simple plurality voting and plurality runoff. In a situation in which a group of voters have common interests but do not agree on which candidate to support due to private information, information aggregation requires them to split their support between their favorite candidates. However, if a group of voters split their support between their favorite candidates, they increase the probability that the winner of the election is not one of them. In a model with three candidates, due to this tension between information aggregation and the need for coordination, plurality runoff leads to higher expected utility for the majority than simple plurality voting if the information held by voters about the candidates is not very accurate.

Bargaining Over Public Goods

In a simple public good economy, we propose a natural bargaining procedure whose equilibria converge to Lindahl allocations as the cost of bargaining vanishes. The procedure splits the decision over the allocation in a decision about personalized prices and a decision about output levels for the public good. Since this procedure does not assume price-taking behavior, it provides a strategic foundation for the personalized taxes inherent to the Lindahl solution to the public goods problem.

Information and participation in a social program

Participation in a social program, like that in clubs and other social organizations, is the result of a process in which an agent first learns about the requirements, benefits, and the likelihood of acceptance, applies for membership, and finally is accepted or rejected. At each stage of the process, decisions made by the agent are responsive to expectations about the decisions and outcomes at the following stages. We propose a model of the participation process and estimate it using data from a social program in Mexico. We are able to distinguish empirically between information costs and other application costs, and show that self-selection due to information costs in fact contributes to targeting the program to the poorest families.Program participation, take up, information aquisition, targeting, undercoverage, leakage

Anonymity in Large Societies

In a social choice model with an infinite number of agents, there may occur "equal size" coalitions that a preference aggregation rule should treat in the same manner. We introduce an axiom of equal treatment with respect to a measure of coalition size and explore its interaction with common axioms of social choice. We show that, provided the measure space is sufficiently rich in coalitions of the same measure, the new axiom is the natural extension of the concept of anonymity, and in particular plays a similar role in the characterization of preference aggregation rules.