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A Political Model of Trust

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  • Agranov, Marina
  • Eilat, Ran
  • Sonin, Konstantin

Abstract

We analyze a simple model of political competition, in which the uninformed median voter chooses whether to follow or ignore the advice of the informed elites. In equilibrium, information transmission is possible only if voters trust the elites' endorsement of potentially biased candidates. When inequality is high, the elites' informational advantage is minimized by the voters' distrust. When inequality reaches a certain threshold, the trust, and thus the information transmission, breaks down completely. Finally, the size of the elite forming in equilibrium depends on the amount of trust they are able to maintain.

Suggested Citation

  • Agranov, Marina & Eilat, Ran & Sonin, Konstantin, 2020. "A Political Model of Trust," CEPR Discussion Papers 14672, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:14672
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    Cited by:

    1. Flavio Delbono, 2020. "Le diseguaglianze in Italia nella stagione del Covid-19," QUADERNI DI ECONOMIA DEL LAVORO, FrancoAngeli Editore, vol. 2020(111), pages 73-86.
    2. Maria Greve & Michael Fritsch & Michael Wyrwich, 2021. "Long-Term Decline of Regions and the Rise of Populism: The Case of Germany," Jena Economic Research Papers 2021-006, Friedrich-Schiller-University Jena.

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    More about this item

    Keywords

    cheap talk; inequality; information club; political economy; Trust;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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