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False Alarm? Terror Alerts and Reelection

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  • Roland Hodler
  • Simon Loertscher
  • Dominic Rohner

Abstract

We study a game with asymmetric information to analyze whether an incumbent can improve his reelection prospects using distorted terror alerts. The voters’ preferred candidate depends on the true terror threat level, and the voters are rational and therefore aware of the incumbent’s incentive to distort alerts. In equilibrium, a moderately “Machiavellian” incumbent reports low and high threat levels truthfully, but issues the same distorted alert for a range of intermediate threat levels. He thereby ensures his reelection for some threat levels at which he would not be reelected under full information.

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Bibliographic Info

Paper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 995.

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Length: 21 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:mlb:wpaper:995

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Related research

Keywords: Terror alerts; voting and elections; signalling; political economics;

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  1. Cukierman, Alex & Alesina, Alberto, 1990. "The Politics of Ambiguity," Scholarly Articles 4552530, Harvard University Department of Economics.
  2. Hodler, R. & Loertscher , S. & Rohner, D., 2007. "Inefficient Policies and Incumbency Advantage," Cambridge Working Papers in Economics 0738, Faculty of Economics, University of Cambridge.
  3. Cukierman, Alex & Tommasi, Mariano, 1998. "When Does It Take a Nixon to Go to China?," American Economic Review, American Economic Association, vol. 88(1), pages 180-97, March.
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  6. Giovanni Maggi & Andres Rodriguez-Clare, 1995. "Costly Distortion of Information in Agency Problems," RAND Journal of Economics, The RAND Corporation, vol. 26(4), pages 675-689, Winter.
  7. repec:reg:rpubli:430 is not listed on IDEAS
  8. Gregory D. Hess & Athanasios Orphanides, 1999. "War and Democracy," CESifo Working Paper Series 201, CESifo Group Munich.
  9. Keith J. Crocker & John Morgan, 1998. "Is Honesty the Best Policy? Curtailing Insurance Fraud through Optimal Incentive Contracts," Journal of Political Economy, University of Chicago Press, vol. 106(2), pages 355-375, April.
  10. Wolfers, Justin & Zitzewitz, Eric, 2004. "Experimental Political Betting Markets and the 2004 Election," Working paper 430, Regulation2point0.
  11. Rogoff, Kenneth & Sibert, Anne, 1988. "Elections and Macroeconomic Policy Cycles," Review of Economic Studies, Wiley Blackwell, vol. 55(1), pages 1-16, January.
  12. Lacker, J.M., 1989. "Optimal Contracts Under Costly State Falsification," Purdue University Economics Working Papers 956, Purdue University, Department of Economics.
  13. Potters, Jan & van Winden, Frans, 1992. " Lobbying and Asymmetric Information," Public Choice, Springer, vol. 74(3), pages 269-92, October.
  14. Wittman, Donald, 1989. "Why Democracies Produce Efficient Results," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1395-1424, December.
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