Copyright (c) 2009 All rights reserved. http://works.bepress.com/polborn Recent documents in Mattias K Polborn en-us Thu, 13 Aug 2009 02:57:32 PDT 3600 http://works.bepress.com/polborn/21 http://works.bepress.com/polborn/21 Tue, 23 Jun 2009 01:16:19 PDT We provide a formal model in which the government produces public goods in different policy fields for its citizens. We start from the basic premise that candidates from different parties have differential capabilities in different policy fields. Office-motivated candidates compete by proposing how to allocate government resources to different policy fields.The model has a unique equilibrium that differs substantially from the standard one-dimensional model, and nicely captures some key intuitions from the literature on issue ownership. While candidates compete for the support of a moderate voter type, this cutoff voter differs from the expected median voter. Moreover, no voter type except the cutoff voter is indifferent between the candidates in equilibrium. The model also predicts that candidates respond to changes in the preferences of voters in a very rigid way. We also analyze under which conditions candidates choose to strengthen the issues they ``own'' (by virtue of their competence advantage), or when they compensate for their weaknesses. Mattias K. Polborn 1. Political Economy http://works.bepress.com/polborn/20 http://works.bepress.com/polborn/20 Tue, 03 Mar 2009 08:28:39 PST We develop a model of political competition between two office-motivated political candidates who choose which level of taxation (and implied government spending) to propose as their election platform. Candidates generally differ in the amount of public good they can produce for a given level of tax revenue. Voters differ in their incomes, as well as in their preference for the public good relative to private consumption.The equilibrium differs starkly from the one in the standard model where candidates are identical. The two candidates propose strictly differentiated platforms that play to their strengths of providing lots of public good, or managing limited government, respectively. Equilibrium platforms depend on the candidates' production functions and on the preferences of (some) voter types, but not on the distribution of voter types in the population. We also derive comparative statics of the equilibrium platforms. Stefan Krasa 1. Political Economy http://works.bepress.com/polborn/19 http://works.bepress.com/polborn/19 Wed, 01 Oct 2008 03:03:18 PDT We introduce a framework of electoral competition in which voters have general preferences over candidates' characteristics and policies. Candidates' immutable characteristics (such as gender, race or previously committed policy positions) are exogenously differentiated, while candidates can choose any policy for the remaining issues to maximize their winning probability. Voters have general preferences over the vectors of candidate characteristics and policies, and vote sincerely. Candidates are uncertain about the distribution of voter preferences.We characterize a condition on voter preferences (satisfied in most existing models) under which candidates' equilibrium policies generically converge. In contrast, whenever fixed characteristics such as competence influence a voter's preferred policy from a candidate, the condition is violated, and we show that policy divergence can arise in the unique and strict Nash equilibrium. Stefan Krasa 1. Political Economy http://works.bepress.com/polborn/18 http://works.bepress.com/polborn/18 Wed, 06 Aug 2008 09:03:12 PDT To analyze the advantages and disadvantages of the U.S. presidential primary system, we construct a model in which three candidates compete for the nomination and voters are uncertain about the candidates' valence.The disadvantage of simultaneous elections is that, if two of the candidates offer the same policy, then they split the voters with a policy preference for their position, which may allow the third candidate to win even if he is not the Condorcet winner. In contrast, in a sequential system, voters in late districts can use the election outcome of early primaries as a coordination device. Against this advantage stands the cost that coordination may occur on the wrong candidate. We find conditions under which a sequential system dominates the simultaneous system, and vice versa. We also show that a decentralized organization (where states decide individually whether they want to vote early or late) may lead to a simultaneous system, even if a sequential one would be more efficient. Mattias K. Polborn 1. Political Economy http://works.bepress.com/polborn/17 http://works.bepress.com/polborn/17 Fri, 25 Jul 2008 09:48:57 PDT Mattias K. Polborn Humor http://works.bepress.com/polborn/16 http://works.bepress.com/polborn/16 Thu, 31 Jan 2008 17:40:14 PST We analyze a model in which voters learn over time their preferences regarding an irreversible social decision. Voters can either implement the project in the first period, or they can postpone the decision to the second period. We analyze the effects of different majority rules. We show that individual first period voting behavior may become ``less conservative'' under supermajority rules, and that it is even possible that a project is implemented in the first period under a supermajority rule that would not be implemented under simple majority rule.We characterize the optimal majority rule, which is a supermajority rule. We also show that, in contrast to individual investment problems, society may be better off if the option to postpone the decision did not exist. Mattias K. Polborn 1. Political Economy http://works.bepress.com/polborn/15 http://works.bepress.com/polborn/15 Thu, 24 Jan 2008 04:28:25 PST This paper analyzes the welfare properties of equilibrium when insurers use observable actions to classify consumers into different risk categories, and consumers' choice is influenced by the insurance market consequences of their actions. Specifically, we analyze this problem at the example of a car insurance market, in which individual preferences over car types are correlated with risk type and used by insurance firms for ratemaking. Equilibrium premiums for each car are determined by the losses that it generates. Consumers take insurance premiums into account when deciding which car to buy. This creates an incentive to buy the car that is preferred by more low risk individuals. From a utilitarian point of view, this incentive is excessive. Depending on parameters, it may even be possible to construct a tax-subsidy scheme with balanced budget that Pareto improves on the market equilibrium. Mattias K. Polborn 2. Insurance Economics http://works.bepress.com/polborn/13 http://works.bepress.com/polborn/13 Fri, 05 Oct 2007 14:41:54 PDT Many political commentators diagnose an increasing polarization of the U.S. electorate into two opposing camps. However, in standard spatial voting models, changes in the political preference distribution are irrelevant as long as the position of the median voter does not change. We show that media bias provides a mechanism through which political polarization can affect electoral outcomes. In our model, media firms' profits depend on their audience rating. Maximizing profits may involve catering to a partisan audience by slanting the news. While voters are rational, understand the nature of the news suppression bias and update appropriately, important information is lost through bias and can lead to electoral mistakes. Polarization increases the profitability of slanting news and raises the likelihood of electoral mistakes. We also show that, if media are biased, then there are some news realizations such that the electorate appears more polarized to an outside observer, even though citizens' policy preferences do not change. Mattias K. Polborn 1. Political Economy http://works.bepress.com/polborn/12 http://works.bepress.com/polborn/12 Sat, 17 Feb 2007 04:06:03 PST We introduce a tractable multi-issue model of electoral competition in which candidates are exogenously committed to particular positions on a subset of issues, while they can choose a sequence of binary positions for the remaining issues to maximize their winning probability. A majority-efficient position is defined as one where a candidate cannot make a majority of the electorate better off, taking as given his fixed positions. We characterize conditions for majority-efficient positions to exist. In contrast to models where candidates can choose all relevant positions, the candidates' fixed positions in our framework imply that only some voters are {\em swing voters}. Whether candidates choose majority-efficient or majority-inefficient positions depends on properties of the distribution of these swing voters. We also use our framework to analyze plurality rule and runoff rule in elections with multiple candidates. Stefan Krasa 1. Political Economy http://works.bepress.com/polborn/11 http://works.bepress.com/polborn/11 Sat, 17 Feb 2007 03:27:04 PST Mattias K. Polborn 3. Industrial Organization and applied game theory