Mandar Oak

Approval voting with endogenous candidates

Abstract We present a formal model of political competition under approval voting which allows for endogenous candidate entry. Our analysis yields a number of novel insights. First, we develop a notion of sincere voting behavior under approval voting, called relative sincerity . We then show that the relatively sincere voting behavior is consistent with the strategic calculus of voting. Second, we show that in a one-dimensional model with distance preferences, equilibria in relatively sincere strategies and without spoiler candidates always generate outcomes close to the median voter. Moreover, approval voting satisfies Duvergers Law in the sense that there are at most two winning positions! Finally, we extend our analysis to arbitrary policy spaces. In the general setting, approval voting is shown to be susceptible to the same kinds of problems as the plurality rule, such as the possibility of non-majoritarian outcomes, failure to elect the Condorcet winner and existence of spoiler candidates.

ON THE ROLE OF THE PRIMARY SYSTEM IN CANDIDATE SELECTION

How does the type of the primary system affect political outcomes? We address this issue by constructing a simple model that accounts for intra-party as well as inter-party political competition. Our model suggests that allowing non-partisan voters to participate in the primaries (i.e. a semi-open primary system) indeed improves the chances of a moderate candidate getting elected. However, this need not necessarily happen in the case of a completely open primary system. Under such a system there arise multiple equilibria, some of which may lead to a greater degree of extremism than the closed primary system. Thus, our model contributes to the current debate on the choice of primary systems from an analytical perspective and helps explain some of the empirical findings.

A Case for Bundling Public Goods Contributions

We extend the model of voluntary contributions to multiple public goods by allowing for bundling of the public goods. Specifically, we study the case where agents contribute into a common pool which is then allocated towards the financing of two pure public goods. We explore the welfare implications of allowing for such bundling vis-a-vis a separate contributions scheme. We show that when agents have homogeneous preferences, they cannot be made better off with a bundling scheme. On the contrary, in the generic case when agents are heterogenous in their incomes and preferences, bundling may increase joint welfare compared to a separate contribution scheme, in particular for higher income inequality among the agents. It is interesting to note that the welfare improvement occurs despite a decrease in total contributions. Our findings have implications for the design of charitable institutions and international aid agencies.

Multiple Votes, Multiple Candidacies and Polarization

We use the citizen-candidate model to study the differential incentives that alternative voting rules provide for candidate entry, and their effect on policy polarization. In particular, we show that allowing voters to cast multiple votes leads to equilibria which support multiple candidate clusters. These equilibria are more polarized than those obtained under the Plurality Rule. This result differs from the one obtained in the existing literature, where the set of candidates is exogenous. Thus, our paper contributes to the scholarly literature as well as public debate on the merits of using different voting rules by highlighting the importance of endogenous candidacy.

Policy Polarization and Strategic Candidacy in Elections under the Alternative Vote Rule

We use the citizen-candidate model to study electoral outcomes under the Alternative Vote rule, a voting method often proposed as a replacement to the prevalent Plurality rule. We show that, like the Plurality rule, the Alternative Vote rule deters multiple candidate clusters and the presence of candidates at more than two positions. Moreover, the Alternative Vote rule tends to support less policy polarization than the Plurality rule. These results stand in contrast to those obtained under other proposed voting rules, Approval Voting in particular, which are prone to candidate clustering and, as a result, can support greater policy polarization vis-à-vis the Plurality rule.

The Signalling Role of Municipal Currencies in Local Development

The last decade has seen the burgeoning of several hundred local community currency institutions in cities across the world. Although residents of these communities claim that local currency promotes local development, how it does so has hitherto been unexplored. We argue that the introduction of a municipal currency may serve as a signal of demand for local goods. Where demand uncertainty deters firms from investing in more productive technologies, such a signal improves the chances that technology choice will be optimal. The introduction of a local currency therefore always improves ex ante efficiency and may lead to ex post efficiency, with strictly higher levels of productivity and welfare.

Conflict and Leadership: Why is There a Hawkish Drift in Politics?

We analyze an agency model of political competition to examine whether conflict encourages hawkish behavior, and if such behavior can itself aggravate conflict. We consider situations of conflict between a state and an insurgent group, such as a conflict over a piece of land. Negotiations are carried on behalf of the state, by a democratically elected leader, whose ability and ideology are imperfectly observed by the electorate. A more capable leader can cede less land at a lower cost (modeled as the probability of the conflict continuing the next period) than a less capable one, while an ideologically hawkish leader enjoys a greater intrinsic utility from retaining land than a less hawkish leader. Two main results that emerge are: certain types of politicians may be excessively hawkish, (as compared to their fi rst best policy choices), which itself increases the probability of conflict and for any credible voting strategy the probability of re-election for a hawk is greater than for a dove. Finally, we show that the voting equilibrium of this game does not always achieve a constrained Pareto optimum suggesting that third party mediation may improve welfare.

Only Twice As Much: A Rule for Regulating Lenders

Present‐day policies aiming to improve the performance of credit markets, such as group lending or creation of collateral, typically aim to change incentives for borrowers. In contrast, premodern credit market interventions, such as usury laws, often targeted the behavior of lenders. We describe and analyze a norm that, although widespread, has escaped scholarly attention: a ceiling on interest accumulation, which limits it to the amount of the original principal. We interpret this rule, which is found in Hindu, Roman, and Chinese legal traditions, as giving lenders the incentive to find more capable borrowers, who will be able to repay early, thereby improving the allocation of capital. We document the consistency between our explanation and the rationale offered by the policy makers.

The Political Economy of Social Choices

We survey the literature that compares the theoretical properties of different voting procedures using models of electoral competition with endogenous candidacy. In particular, we focus on the predictions made by these models regarding the number of candidates running for election and their polarization. We organize the different models into three families based on different assumptions regarding candidate motivation and the timing of candidate entry. We argue that endogenous candidacy models offer both theoretical and empirical advantages over the standard Hotelling-Downs model in the comparison of the properties of alternative voting procedures. On the theoretical front, these models can provide a more satisfactory microfoundation for the emergence and/or stability of a specific configuration of parties or candidates under different voting procedures. On the empirical front these models offer a better account of the stylized facts about elections, particularly when it comes to explaining the cases where Duvergers propositions apply and the cases where they do not. We also point to shortcomings of these models and propose some directions for future research.

Comparison of Voting Procedures Using Models of Electoral Competition with Endogenous Candidacy

We survey the literature that compares the theoretical properties of different voting procedures using models of electoral competition with endogenous candidacy. In particular, we focus on the predictions made by these models regarding the number of candidates running for election and their polarization. We organize the different models into three families based on different assumptions regarding candidate motivation and the timing of candidate entry. We argue that endogenous candidacy models offer both theoretical and empirical advantages over the standard Hotelling-Downs model in the comparison of the properties of alternative voting procedures. On the theoretical front, these models can provide a more satisfactory microfoundation for the emergence and/or stability of a specific configuration of parties or candidates under different voting procedures. On the empirical front these models offer a better account of the stylized facts about elections, particularly when it comes to explaining the cases where Duvergers propositions apply and the cases where they do not. We also point to shortcomings of these models and propose some directions for future research.