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Loss Aversion in Politics

Author

Listed:
  • Alberto Alesina
  • Francesco Passarelli

Abstract

We study loss aversion in elections by investigating a median voter model (full convergence in a two‐candidate election) and a model of partial divergence of policy proposals. First, we show a status quo bias, an endowment effect, and a moderating effect of policies. Second, we show the occurrence of “long‐term cycles” in policies with self‐supporting movements to the right or the left. Finally, we prove that younger societies should be more prone to change and less affected by the status quo bias than older ones.

Suggested Citation

  • Alberto Alesina & Francesco Passarelli, 2019. "Loss Aversion in Politics," American Journal of Political Science, John Wiley & Sons, vol. 63(4), pages 936-947, October.
    • Handle: RePEc:wly:amposc:v:63:y:2019:i:4:p:936-947
    DOI: 10.1111/ajps.12440
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    JEL classification:

    • H0 - Public Economics - - General

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