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Learning, voting and the information trap

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Author Info
Aleksander Berentsen
Esther Bruegger
Simon Loertscher

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Abstract

We consider a median voter model with uncertainty about how the economy functions. The distribution of income is exogenously given and the provision of a public good is financed through a proportional tax. Voters and politicians do not know the true production function for the public good, but by using Bayes rule they can learn from experience. We show that the economy may converge to an inefficient policy where no further inference is possible so that the economy is stuck in an information trap.

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Publisher Info
Paper provided by Universitaet Bern, Departement Volkswirtschaft in its series Diskussionsschriften with number dp0516.

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Date of creation: Apr 2005
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Handle: RePEc:ube:dpvwib:dp0516

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Related research
Keywords: Learning; voting and the information trap;

Find related papers by JEL classification:
D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior
H10 - Public Economics - - Structure and Scope of Government - - - General
D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information

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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. Blendon, Robert J, et al, 1997. "Bridging the Gap between the Public's and Economists' Views of the Economy," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 105-18, Summer. [Downloadable!] (restricted)
  2. Piketty, Thomas, 1995. "Social Mobility and Redistributive Politics," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 551-84, August. [Downloadable!] (restricted)
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  3. David Spector, 2000. "Rational Debate And One-Dimensional Conflict," The Quarterly Journal of Economics, MIT Press, vol. 115(1), pages 181-200, February. [Downloadable!] (restricted)
  4. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 914-27, October. [Downloadable!] (restricted)
  5. Tomer Blumkin & Volker Grossmann, 2004. "Ideological Polarization, Sticky Information, and Policy Reforms," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  6. 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!]
  7. McLennan, Andrew, 1984. "Price dispersion and incomplete learning in the long run," Journal of Economic Dynamics and Control, Elsevier, vol. 7(3), pages 331-347, September. [Downloadable!] (restricted)
  8. Alberto Alesina & George-Marios Angeletos, 2004. "Fairness and Redistribution," NajEcon Working Paper Reviews 122247000000000306, www.najecon.org. [Downloadable!]
    Other versions:
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