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Soothing politics

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  • Levy, Raphaël

Abstract

We consider a political agency model where voters learn information about some policy-relevant variable, which they can ignore when it impedes their desire to hold optimistic beliefs. Voters' excessive tendency to sustain optimism may result in inefficient political decision-making because political courage does not pay off when voters have poor information. However, voters infer information from policies and incentives to ignore bad news decrease when policy-making is more efficient. This generates multiple equilibria: an equilibrium where voters face up to the reality and politicians have political support to implement optimal policies, and another where they shy away from reforms to cater to the electorate's demand for soothing policies.

Suggested Citation

  • Levy, Raphaël, 2014. "Soothing politics," Journal of Public Economics, Elsevier, vol. 120(C), pages 126-133.
  • Handle: RePEc:eee:pubeco:v:120:y:2014:i:c:p:126-133
    DOI: 10.1016/j.jpubeco.2014.09.003
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Stone, Daniel, 2018. ""Unmotivated Bias" and Partisan Hostility: Empirical Evidence," SocArXiv hr5ba, Center for Open Science.
    2. Le Yaouanq, Yves, 2018. "A Model of Ideological Thinking," Rationality and Competition Discussion Paper Series 85, CRC TRR 190 Rationality and Competition.
    3. Hestermann, Nina & Le Yaouanq, Yves & Treich, Nicolas, 2020. "An economic model of the meat paradox," TSE Working Papers 20-1141, Toulouse School of Economics (TSE).
    4. Hestermann, Nina & Le Yaouanq, Yves & Treich, Nicolas, 2019. "An Economic Model of the Meat Paradox," Rationality and Competition Discussion Paper Series 164, CRC TRR 190 Rationality and Competition.
    5. Stone, Daniel F., 2019. "“Unmotivated bias” and partisan hostility: Empirical evidence," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 79(C), pages 12-26.

    More about this item

    Keywords

    Political economy of reforms; Political agency; Selective memory;

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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