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! ]

Elections, Contracts and Markets

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Gersbach, Hans
Muller, Markus

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

Abstract

As the performance of long-term projects is not observable in the short run politicians may pander to public opinion. To solve this problem, we propose a triple mechanism involving political information markets, reelection threshold contracts, and democratic elections. An information market is used to predict the long-term performance of a policy, while threshold contracts stipulate a price level on the political information market that a politician must reach to have the right to stand for reelection. Reelection thresholds are offered by politicians during campaigns. We show that, on balance, the triple mechanism increases social welfare.

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.cepr.org/pubs/dps/DP5717.asp
File Format: application/pdf
File Function:
Download Restriction: CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

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
Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 5717.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length:
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:cpr:ceprdp:5717

Contact details of provider:
Postal: Centre for Economic Policy Research, 53--56 Great Sutton Street, London EC1V 0DG
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820

Order Information:
Email:

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

Related research
Keywords: democracy; elections; information markets; threshold contracts; triple mechanism;

Other versions of this item:

Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information

This paper has been announced in the following NEP Reports:

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. M. Berlemann & C. Schmidt, . "Predictive Accuracy of Political Stock Markets - Empirical Evidence from a European Perspective," Sonderforschungsbereich 373 2001-57, Humboldt Universitaet Berlin.
  2. Thomas M. Steger & Lucas Bretschger, 2005. "Globalization, the volatility of intermediate goods prices and economic growth," Economics working paper series 05/40, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  3. Persson, Torsten & Roland, Gerard & Tabellini, Guido, 1997. "Separation of Powers and Political Accountability," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1163-1202, November.
    Other versions:
  4. Timo Trimborn & Karl-Josef Koch & Thomas M. Steger, 2004. "Multi-dimensional transitional dynamics : a simple numerical procedure," Economics working paper series 04/35, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
    Other versions:
  5. Moritz Schularick & Thomas Steger, 2006. "Does Financial Integration Spur Economic Growth? New Evidence from the First Era of Financial Globalization," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  6. Justin Wolfers & Eric Zitzewitz, 2004. "Prediction Markets," NBER Working Papers 10504, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  7. Corrado Di Maria & Simone Valente, 2006. "The Direction of Technical Change in Capital-Resource Economies," Economics working paper series 06/50, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
    Other versions:
  8. Nordhaus, William D, 1991. "To Slow or Not to Slow: The Economics of the Greenhouse Effect," Economic Journal, Royal Economic Society, vol. 101(407), pages 920-37, July. [Downloadable!] (restricted)
  9. Sjak Smulders & Lucas Bretschger & Hannes Egli, 2005. "Economic growth and the diffusion of clean technologies : explaining environmental Kuznets," Economics working paper series 05/42, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  10. Lucas Bretschger & Sjak Smulders, 2003. "Sustainability and Substitution of Exhaustible Natural Resources. How resource prices affect long-term R&D investments," Working Papers 2003.87, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
  11. Karen Pittel & Amigues Jean-Pierre & Thomas Kuhn, 2005. "Endogenous growth and recycling : a material balance approach," Economics working paper series 05/37, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  12. Thomas M. Steger, 2003. "Economic Growth and Sectoral Change under Resource Reallocation Costs," Economics working paper series 03/30, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  13. David Romer, 2003. "Misconceptions and Political Outcomes," Economic Journal, Royal Economic Society, vol. 113(484), pages 1-20, January. [Downloadable!] (restricted)
    Other versions:
  14. Lucas Bretschger & Thomas M. Steger, 2004. "The dynamics of economic integration : theory and policy," Economics working paper series 04/32, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
    Other versions:
  15. Gersbach, Hans & Muller, Markus, 2006. "Elections, Contracts and Markets," CEPR Discussion Papers 5717, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  16. Thomas M. Steger, 2006. "On the Mechanics of Economic Convergence," German Economic Review, Blackwell Publishing, vol. 7, pages 317-337, 08. [Downloadable!] (restricted)
    Other versions:
  17. Valente Simone, 2005. "Intergenerational Transfers, Lifetime Welfare and Resource Preservation," Departmental Working Papers 214, Tor Vergata University, CEIS. [Downloadable!]
    Other versions:
  18. Eric Maskin & Jean Tirole, 2004. "The Politician and the Judge: Accountability in Government," American Economic Review, American Economic Association, vol. 94(4), pages 1034-1054, September. [Downloadable!]
    Other versions:
  19. Christian Bjørnskov & Axel Dreher & Justina Fischer, 2007. "The bigger the better? Evidence of the effect of government size on life satisfaction around the world," Public Choice, Springer, vol. 130(3), pages 267-292, March. [Downloadable!] (restricted)
    Other versions:
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. Simone Valente, 2007. "International Status Seeking, Trade, and Growth Leadership," Economics working paper series 07/75, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  2. Gersbach, Hans, 2007. "Vote-share Contracts and Democracy," CEPR Discussion Papers 6497, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  3. Urs von Arx & Andreas Schäfer, 2007. "The Influence of Pension Funds on Corporate Governance," Economics working paper series 07/63, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  4. Damian S. Damianov & Johannes Gerd Becker, 2008. "Auctions with Variable Supply: Uniform Price versus Discriminatory," Economics working paper series 08/80, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  5. Hans Gersbach & Maik T. Schneider & Olivier Schneller, 2008. "On the Design of Basic-Research Policy," Economics working paper series 08/79, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  6. Ulrich Brandt-Pollmann & Ralph Winkler & Sebastian Sager & Ulf Moslener & Johannes P. Schlöder, 2006. "Numerical solution of optimal control problems with constant control delays," Economics working paper series 06/59, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
    Other versions:
  7. Theresa Fahrenberger & Hans Gersbach, 2007. "Minority Voting and Long-term Decisions," Economics working paper series 07/70, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
    Other versions:
  8. Hans Gersbach & Volker Hahn, 2008. "Forward Guidance for Monetary Policy: Is It Desirable?," Economics working paper series 08/84, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  9. Edward J. Balistreri & Russell H. Hillberry & Thomas F. Rutherford, 2008. "Structural Estimation and Solution of International Trade Models with Heterogeneous Firms," Economics working paper series 08/89, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
    Other versions:
  10. Simone Valente, 2007. "Human Capital, Resource Constraints and Intergenerational Fairness," Economics working paper series 07/68, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  11. Theresa Fahrenberger & Hans Gersbach, 2007. "Legislative Process with Open Rules," Economics working paper series 07/64, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
    Other versions:
  12. Hans Gersbach & Verena Liessem, 2008. "Reelection threshold contracts in politics," Social Choice and Welfare, Springer, vol. 31(2), pages 233-255, August. [Downloadable!] (restricted)
    Other versions:
  13. Ralph Winkler, 2006. "Now or Never: Environmental Protection under Hyperbolic Discounting," Economics working paper series 06/60, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
    Other versions:
  14. Hans Gersbach, 2007. "The Global Refunding System and Climate Change," Economics working paper series 07/62, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  15. Christoph Heinzel & Ralph Winkler, 2007. "The role of environmental and technology policies in the transition to a low-carbon energy industry," Economics working paper series 07/71, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  16. Hans Gersbach & Ralph Winkler, 2007. "On the Design of Global Refunding and Climate Change," Economics working paper series 07/69, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich, revised Jul 2007. [Downloadable!]
    Other versions:
  17. Ian A. MacKenzie,, 2008. "On the Sequential Choice of Tradable Permit Allocations," Economics working paper series 08/83, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  18. Hans Gersbach & Markus Müller, 2006. "Elections, Contracts and Markets," Economics working paper series 06/56, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
    Other versions:
  19. Volker Hahn, 2007. "Information Acquisition by Price-Setters and Monetary Policy," Economics working paper series 07/73, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  20. Maik T. Schneider, 2007. "Knowledge Codification and Endogenous Growth," Economics working paper series 07/65, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
Statistics
Access and download statistics

Did you know? Use the JEL tree to browse through the database by subfields.

This page was last updated on 2009-11-25.

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.