R. Morris Coats

Entry barriers in politics and uncontested elections

Abstract Lott (1986, 1987a) argues that brand names can be barriers to entry in political markets because political brand names cannot be sold. Our empirical model examines the effect of inalienability of political capital on entry into nineteenth-century British political markets. We test the hypothesis that since county races were more expensive than borough races owing to greater costs of information, the level of non-transferable investment produced by a given number of past campaigns was greater in the rural districts and produced more significant entry barriers.

Brand-Name Investment of Candidates and District Homogeneity: An Ordinal Response Model

Advertising is often viewed as a sunk investment that will receive a return only if firms do not cheat their customers on quality, much like a security bond that will be lost for non-performance of a contract. In the last period a firm will cheat if there is no future return from the investment [15]. Knowing that a firm is in its last period will then reduce sales in the last period to zero, so the firms will begin to cheat the period before the last. This is the usual iterated prisoners dilemma (PD) game with a finite life; cheating begins in the first period and continues. Demsetz [10] argues that since firms are transferable through voluntary trade, the possibly infinite life of a firm transforms this finite, iterated PD game with a known end into an iterated PD game with no known end. As Axelrod [1] suggests, the best of the known strategies for this game is the titfor-tat strategy. In this game, firms live up to quality claims if customers continue to pay for their product. Demsetz also argues that brand name cannot serve as a barrier to entry for alienable firms because the firm, with its brand name intact, can be purchased by buyers who are more efficient producers than the current producer. Since professionals and politicians who have made investments in brand name have namebrand capital that is inalienable, these markets may suffer from the last-period problem [12; 17; 18; 19]. If the seller knows the last period because he intends to quit, cheating cannot be prevented

Special Versus General Elections and Composition of the Voters: Evidence From Louisiana School Tax Elections

Using Louisiana school board property tax elections from the past decade, the authors study the question of whether or not special elections tend to produce lower turnout and a greater percentage of yes votes than do general elections. With the problem focusing on the choice of voting yes, voting no, or abstaining from voting, modified minimum chi-square methods are used in the analysis. The authors find that opposition to local school taxes increases with turnout. They also find that turnout is affected by the size of the tax, by the presence or absence of other taxes on the ballot, and by the presence or absence of state or federal matters on the same ballot. Both the inclusion of state or federal issues (or candidates) on the ballot and a higher tax rate lead to increased relative opposition at the polls.

Cigarette smuggling mitigates the public health benefits of cigarette taxes

Merriman (2002) argues that cigarette smuggling does not reduce the health benefits of cigarette taxation, because, in addition to the purchase price of smuggled cigarettes, those purchasing smuggled cigarettes have to pay a higher inconvenience price for their cigarettes, so that smuggled cigarettes no more than replace legal cigarettes. Here, it is argued that Merriman is incorrect, that while smuggled cigarettes have the same full cost as legal cigarettes at the margin, they have a lower inframarginal full price, which has the effect of increasing smoking behaviour.

The effect of opening up ANWR to drilling on the current price of oil

The Effect of Opening up ANWR to Drilling on the Current Price of Oil R. Morris Coats and Gary M. Pecquet

A Fallacy in the ANWR Drilling Debate: A Lesson on Scarcity Rents and Intertemporal Pricing under Different Market Structures

It is common knowledge that oil discovered today, or that is newly allowed to be developed, has no effect on prices until reaching the market. However, economic theory does not support common knowledge on this issue. By lowering the value of holding oil for future sale, a future oil supply increase makes it more profitable for firms to produce and sell oil presently. Under three distinct market structures, we use a two-period model to show students that the resulting increase in present supply decreases the present price of oil. Production decisions in the absence of scarcity rents are also discussed.

An instrumental-variables approach to income redistribution

When individuals participate in the process that determines their own redistributive obligations and claims, biased outcomes can be expected. This bias can be substantially eliminated by partitioning the collectivity into groups that set one anothers redistributive obligations in a cycle.

A Note on the Cost of Standing for the British Parliament: 1852-1880

It has been noted that the cost of running for a county parliamentary seat in nineteenth-century Britain was about twice the cost of running for a borough seat. Since there were no residency requirements and no difference in political power between the borough and county MPs, this persistent price discrepancy needs explanation. Higher informational costs in the counties may have led to fewer contested elections.

Ballots, Bribes, and Brand-Name Political Capital

Campaign effort is allocated towards resources that increase voter support the most for the marginal effort. A model is developed for the derived demand for investment in brand name and voter persuasion and for votes bought outright. We see that a secret ballot increases the cost of monitoring paid voters and changes the relative prices for obtaining voter support through bribery and investment in brand name capital, increasing the demand for campaign or brand-name-induced capital. Alternately, restrictions on new spending on brand-name political capital increase the demand for votes gained through direct bribery, treating and conveyance of voters to the polls, while at the same time increase the relative value of incumbency, of existing brand-name political capital. The model we develop is used to examine restrictions on spending and on brand-name investment in candidates and the effects of such spending limits (and limits on campaign contributions) on the demand for additional votes gained by vote buying, treating and conveyance of voters to the polls.

Bend it like FIFA: Corruption on and off the Pitch

Throughout 2015, many of FIFA’s (Federation Internationale de Football Association) top executives were arrested, facing charges of bribery, fraud, and money laundering. On December 21, 2015, FIFA’s own Ethics Committee decided to ban its long-serving president, Joseph “Sepp” Blatter, for eight years. FIFA has long been plagued by allegations of bribery, but has, until recently, been able to get around them, like a well-curved free-kick shot. Being organized as a not-for-profit organization while generating large revenues, FIFA has enjoyed the services of highly paid executives and employees. For-profit firms are regulated largely through the market process, with stockholders having strong incentives to maintain close oversight and demanding transparency of transactions, and being subject to takeover bids. Not-for-profit organizations receive far less oversight, but are subject to regulation from both the country where they are incorporated and the country where they operate. As a monopolist in rule-making and holding a world championship tournament for the world’s most popular sport, FIFA executives and board members are in a position to demand payoffs and/or can punish its adversaries with its venue selection or by banning national teams from tournament participation.