Essays on strategic voting and political influence
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Chapter 1 : I attempt a detailed literature review on the passage from the probabilistic versions of the Condorcet Jury Theorem to models augmented by the concept of strategic agents, including both theoretical and relevant empirical work. In the first part, I explore the most influential relevant game theoretic models and their main predictions. In the second part, I review what voting experiments have to say about these predictions, with a brief mention of the experiments' key methodological aspects. In the final part, I provide with an attempt to map the recent strategic voting literature in terms of structure and scope. I close with a philosophical question on the exogeneity of a "correct" choice of a voting outcome, which is inherent in the current strategic voting literature. Chapter 2 : I develop a two stage game with individually costly political action and costless voting on a binary agenda where, in equilibrium, agents rationally cast honest votes in the voting stage. I show that a positive but sufficiently low individual cost of political action can lead to a loss in aggregate welfare for any electorate size. When the individual cost of political action is lower than the signalling gain, agents will engage in informative political action. In the voting stage, since everyone's signal is revealed, agents will unanimously vote for the same policy. Therefore, the result of the ballot will be exactly the same as the one without prior communication, but with the additional aggregate cost of political action. However, when agents have heterogeneous prior beliefs, society is large and the state of the world is sufficiently uncertain, a moderate individual cost of political action can induce informative collective action of only a subset of the members of society, which increases ex ante aggregate welfare relative to no political action. The size of the subset of agents engaging in collective action depends on the dispersion of prior opinions. Chapter 3 : This chapter shows theoretically that hearing expert opinions can be a double-edged sword for decision making committees. We study a majoritarian voting game of common interest where committee members receive not only private information, but also expert information that is more accurate than private information and observed by all members. We identify three types of equilibria of interest, namely i) the symmetric mixed strategy equilibrium where each member randomizes between following the private and public signals should they disagree; ii) the asymmetric pure strategy equilibrium where a certain number of members always follow the public signal while the others always follow the private signal; and iii) a class of equilibria where a supermajority and hence the committee decision always follow the expert signal. We find that in the first two equilibria, the expert signal is collectively taken into account in such a way that it enhances the efficiency (accuracy) of the committee decision, and a fortiori the CJT holds. However, in the third type of equilibria, private information is not reflected in the committee decision and the efficiency of committee decision is identical to that of public information, which may well be lower than the efficiency the committee could achieve without expert information. In other words, the introduction of expert information might reduce efficiency in equilibrium. Chapter 4 : In this chapter we present experimental results on the theory of the previous chapter. In the laboratory, too many subjects voted according to expert information compared to the predictions from the efficient equilibria. The majority decisions followed the expert signal most of the time, which is consistent with the class of obedient equilibria mentioned in the previous chapter. Another interesting finding is the marked heterogeneity in voting behaviour. We argue that the voters' behaviour in our data can be best described as that in an obedient equilibrium where a supermajority (and hence the decision) always follow the expert signal so that no voter is pivotal. A large efficiency loss manifests due to the presence of expert information when the committee size was large. We suggest that it may be desirable for expert information to be revealed only to a subset of committee members. Finally, in the Appendix we describe a new alternative method for producing the signal matrix of the game. Chapter 5 : There is a significant gap between the theoretical predictions and the empirical evidence about the efficiency of policies in reducing crime rates. This chapter argues that one important reason for this is that the current literature of economics of crime overlooks an important hysteresis effect in criminal behaviour. One important consequence of hysteresis is that the effect on an outcome variable from positive exogenous variations in the determining variables has a different magnitude from negative variations. We present a simple model that characterises hysteresis in both the micro and macro levels. When the probability of punishment decreases, some law abiding agents will find it more beneficial to enter a criminal career. If the probability of punishment returns to its original level, a subset of these agents will continue with their career in crime. We show that, when crime choice exhibits weak hysteresis at the individual level, crime rate in a society consisted from a continuum of agents that follows any non-uniform distribution will exhibit strong hysteresis. Only when punishment is extremely severe the effect of hysteresis ceases to exist. The theoretical predictions corroborate the argument that policy makers should be more inclined to set pre-emptive policies rather than mitigating measures.