Incumbent competition, decision-making, and policy choice

College

School of Economics

Department/Unit

Economics

Document Type

Dissertation

Publication Date

5-2019

Abstract

In the first paper, two politicians decide whether to follow what they believe the public wants or choose the option that secures their private gain. The public only rewards a politician when a policy is implemented, or an action that coincides with the public decision is chosen. Politicians with good decision-making abilities, under sufficiently high policy rewards and moderate private benefit, take the action that generates a public benefit, implementing the popular policy. Politicians with very poor decision-making abilities, give sufficiently high policy rewards, choose to implement a policy regardless of what the public want. Only popular policies are passed for salient issues.
In the second paper, two incumbents each decide on an action to maximize their popularity. The choices are made in consideration of their beliefs on the popular and socially optimal choices. The paper looks at the types of policies passed for both salient and non-salient issues given different levels of clarity on public opinion. For salient issues, a divided public is better than a united but ill-informed one. For non-salient issues, policies are always passed when public opinion is clear, while politicians diverge strategically under low policy payoffs when public opinion is unclear.
The third paper considers a model of lobbying where two opposing lobbyists vye for the support of a legislator with uncertain preferences. When uncertainty on legislator preference is low, lobbyists bid aggressively. When uncertainty is high, lobbyists bid conservatively. When the degree of uncertainty is moderate, we find asymmetric equilibria where one lobbyist chooses to either bid conservatively or aggressively, and the other just enough to ensure that the average bid is equal to the legislator’s integrity threshold.

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Disciplines

Economics | Legislation

Keywords

Legislation; Legislative bodies; Lobbying

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