Secessions and Political Extremism: Why Regional Referenda Do Not Solve the Problem
AbstractThis paper shows that an uninformed player can increase his bargaining power by committing to receive information from an expert more skeptical to cooperation. This general idea is applied to a model in which a regional political leader (the expert) influences voting in a referendum on independence by strategically disseminating information about the consequences of separation. I show that this motivates a moderate electorate to appoint a more extreme leader, to receive biased information that increases their bargaining power over the gains of staying unified. However, a trade-off between bargaining power and precision of information causes inefficient outcomes in equilibrium. (JEL: C73, D72, D82, H77) Copyright (c) 2004 by the European Economic Association.
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Bibliographic InfoArticle provided by MIT Press in its journal Journal of the European Economic Association.
Volume (Year): 2 (2004)
Issue (Month): 5 (09)
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Find related papers by JEL classification:
- C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
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