This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Optimal Electoral Timing: Exercise Wisely and You May Live Longer

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
JUSSI KEPPO
LONES SMITH
DMITRY DAVYDOV

Additional information is available for the following registered author(s):

Abstract

The timing of elections is flexible in many countries. We study this optimization by first creating a Bayesian learning model of a mean-reverting political support process. We then explore optimal electoral timing, modelling it as a renewable American option with interacting waiting and stopping values. "Inter alia, "we show that the expected longevity is a convex, then concave, function of the support. Finally, we calibrate our model to the post-1945 Labour-Tory U.K. rivalry. Our story quite well explains when the elections were called. We also show that election options approximately double the expected time in power in the current streak. Copyright 2008 The Review of Economic Studies Limited.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-937X.2008.00493.x
File Format: text/html
File Function: link to full text
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Publisher Info
Article provided by Blackwell Publishing in its journal Review of Economic Studies.

Volume (Year): 75 (2008)
Issue (Month): 2 (04)
Pages: 597-628
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:bla:restud:v:75:y:2008:i:2:p:597-628

Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0034-6527

Order Information:
Web: http://www.blackwellpublishing.com/subs.asp?ref=0034-6527

For technical questions regarding this item, or to correct its listing, contact: (Christopher F. Baum).

Related research
Keywords:

Other versions of this item:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Duan, Jin-Chuan & Simonato, Jean-Guy, 2001. "American option pricing under GARCH by a Markov chain approximation," Journal of Economic Dynamics and Control, Elsevier, vol. 25(11), pages 1689-1718, November. [Downloadable!] (restricted)
  2. Austen-Smith, David & Banks, Jeffrey., 1987. "Elections, Coalitions, and Legislative Outcomes," Working Papers 643, California Institute of Technology, Division of the Humanities and Social Sciences. [Downloadable!]
  3. Patrick Bolton & Christopher Harris, 1999. "Strategic Experimentation," Econometrica, Econometric Society, vol. 67(2), pages 349-374, March.
  4. John Y. Campbell & Samuel B. Thompson, 2005. "Predicting the Equity Premium Out of Sample: Can Anything Beat the Historical Average?," Harvard Institute of Economic Research Working Papers 2084, Harvard - Institute of Economic Research. [Downloadable!]
    Other versions:
  5. Smith, Lones, 1997. "Time-consistent optimal stopping," Economics Letters, Elsevier, vol. 56(3), pages 277-279, November. [Downloadable!] (restricted)
    Other versions:
  6. André Blais & Elisabeth Gidengil & Neil Nevitte & Richard Nadeau, 2004. "Do (Some) Canadian Voters Punish a Prime Minister for Calling a Snap Election?," Political Studies, Political Studies Association, vol. 52, pages 307-323, 06. [Downloadable!] (restricted)
  7. Daniel Diermeier & Antonio Merlo, 1998. "Government Turnover in Parliamentary Democracies," Discussion Papers 1232, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
    Other versions:
  8. Keller, Godfrey & Rady, Sven, 1999. "Optimal Experimentation in a Changing Environment," Review of Economic Studies, Blackwell Publishing, vol. 66(3), pages 475-507, July. [Downloadable!] (restricted)
    Other versions:
  9. Feddersen, Timothy J & Pesendorfer, Wolfgang, 1996. "The Swing Voter's Curse," American Economic Review, American Economic Association, vol. 86(3), pages 408-24, June.
    Other versions:
    • Timothy J. Feddersen & Wolfgang Pesendorfer, 1995. "The Swing Voter's Curse," Discussion Papers 1064, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
  10. Cochrane, John H, 1996. "A Cross-Sectional Test of an Investment-Based Asset Pricing Model," Journal of Political Economy, University of Chicago Press, vol. 104(3), pages 572-621, June. [Downloadable!] (restricted)
  11. Philip H. Dybvig & Mark Loewenstein, 2003. "Employee Reload Options: Pricing, Hedging, and Optimal Exercise," Review of Financial Studies, Oxford University Press for Society for Financial Studies, vol. 16(1), pages 145-171.
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Felix Bierbrauer & Lydia Mechtenberg, 2008. "Winners and Losers of Early Elections: On the Welfare Implications of Political Blockades and Early Elections," SFB 649 Discussion Papers SFB649DP2008-071, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany. [Downloadable!]
  2. Felix Bierbrauer & Lydia Mechtenberg, 2008. "Winners and Losers of Early Elections: On the Welfare Implications of Political Blockades and Early Elections," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2008_50, Max Planck Institute for Research on Collective Goods. [Downloadable!]
Statistics
Access and download statistics

Did you know? You can import bibliographic info in various formats into you bibliographic tool, or just into your word processor. See under "publisher info" on each abstract page.

This page was last updated on 2009-10-26.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.