Making Elections Work: Accountability with Selection and Control

in American Economic Journal. Microeconomics (2022), 14(4), 616-644

We study the limits of dynamic electoral accountability when voters are uncertain about politicians’ characteristics (adverse selection) and their actions (moral hazard). Existing work argues that voters ... [more ▼]

We study the limits of dynamic electoral accountability when voters are uncertain about politicians’ characteristics (adverse selection) and their actions (moral hazard). Existing work argues that voters cannot achieve their first-best payoff. This is attributed to inherent deficiencies of the electoral contract, including voters’ inability to pre-commit, and the restriction to a binary retention-replacement decision. We provide conditions under which, despite these constraints, voters can obtain arbitrarily close to the first-best payoff in an equilibrium of the electoral interaction. Our paper resolves that there need not be a trade-off between selection and control. [less ▲]

The Politics of Collective Pricipals

Presentation (2022, September)

A group of principals collectively and dynamically screens an agent. The principals hold heterogeneous and evolving values from the relationship. At each date, they use a collective decision rule to ... [more ▼]

A group of principals collectively and dynamically screens an agent. The principals hold heterogeneous and evolving values from the relationship. At each date, they use a collective decision rule to determine a joint offer to the agent; the principals may also amend the procedures governing how their joint offer is chosen. Our main result shows how decisive coalitions of principals voluntarily and permanently concentrate decision-making authority in a single principal. It shows that every equilibrium sequence of procedures converges to the dictatorship of a single principal. [less ▲]

Screening for Consensus: Delegation with Collective Principals

Presentation (2022, March 29)

A group of principals collectively and sequentially screen an agent. The principals hold heterogeneous values from the relationship that may evolve over time. At each date, the principals use a collective ... [more ▼]

A group of principals collectively and sequentially screen an agent. The principals hold heterogeneous values from the relationship that may evolve over time. At each date, the principals use a collective decision rule to propose a contract to the agent. We unearth circumstances in which every non-dictatorial decision rule yields inefficiency in the form of excessive learning: relative to a single-principal benchmark, collective principals screen the agent too aggressively. They do so in order to reduce uncertainty about the agent’s preferences, and alleviate dynamic conflicts of interest between the principals that exist regardless of their static alignment. [less ▲]

Screening for Consensus : Delegation with Collective Principals

Presentation (2022, March 21)

A group of principals collectively and sequentially screen an agent. The principals hold heterogeneous values from the relationship that may evolve over time. At each date, the principals use a collective ... [more ▼]

A group of principals collectively and sequentially screen an agent. The principals hold heterogeneous values from the relationship that may evolve over time. At each date, the principals use a collective decision rule to propose a contract to the agent. We unearth circumstances in which every non-dictatorial decision rule yields inefficiency in the form of excessive learning: relative to a single-principal benchmark, collective principals screen the agent too aggressively. They do so in order to reduce uncertainty about the agent’s preferences, and alleviate dynamic conflicts of interest between the principals that exist regardless of their static alignment. [less ▲]

Screening for Consensus: Delegation with Collective Principals

Presentation (2022, March 14)

A group of principals collectively and sequentially screen an agent. The principals hold heterogeneous values from the relationship that may evolve over time. At each date, the principals use a collective ... [more ▼]

A group of principals collectively and sequentially screen an agent. The principals hold heterogeneous values from the relationship that may evolve over time. At each date, the principals use a collective decision rule to propose a contract to the agent. We unearth circumstances in which every non-dictatorial decision rule yields inefficiency in the form of excessive learning: relative to a single-principal benchmark, collective principals screen the agent too aggressively. They do so in order to reduce uncertainty about the agent’s preferences, and alleviate dynamic conflicts of interest between the principals that exist regardless of their static alignment. [less ▲]

Cloturing Deliberation

E-print/Working paper (2021)

We study how the institutional arrangements for ending deliberation --- the "cloture rules" --- interact with collective learning to affect the outcomes of decision making in committees. In contrast to ... [more ▼]

We study how the institutional arrangements for ending deliberation --- the "cloture rules" --- interact with collective learning to affect the outcomes of decision making in committees. In contrast to much of the previous literature on deliberative commit tees, this paper makes a distinction between the final votes over policy proposals and the cloture votes that bring them about. Using this approach, we explore how cloture rules influence the course of deliberation, the likelihood of inefficient deliberative outcomes, the circumstances surrounding failures to bring proposals to a final vote, and the distribution of power among committee members in the deliberative process. We also use our simple model to examine the issue of the stability of cloture rules, characterizing the rules that no coalition of committee members is able or willing to overturn. We show in particular that all cloture rules are dynamically stable. [less ▲]

Existence and Indeterminacy of Markovian Equilibria in Dynamic Bargaining Games

in Theoretical Economics (2018), 13

This paper studies stationary Markov perfect equilibria in multidimensional models of dynamic bargaining, in which the alternative chosen in one period determines the status quo for the next. We ... [more ▼]

This paper studies stationary Markov perfect equilibria in multidimensional models of dynamic bargaining, in which the alternative chosen in one period determines the status quo for the next. We generalize a sufficient condition for existence of equilibrium due to Anesi and Seidmann, 2015. We then use this existence result to show that if a weak gradient restriction holds at an alternative, then when players are sufficiently patient, there is a continuum of equilibria with absorbing sets arbitrarily close to that alternative. A sufficient condition for our gradient restriction is that the gradients of all players' utilities are linearly independent at that alternative. When the dimensionality of the set of alternatives is high, this linear independence condition holds at almost all alternatives, and equilibrium absorbing sets are dense in the set of alternatives. This implies that constructive techniques, which are common in the literature, fail to identify many plausible outcomes in dynamic bargaining games. [less ▲]

Bargaining in Standing Committees with an Endogenous Default

in Review of Economic Studies (2015), 82

Committee voting has mostly been investigated from the perspective of the standard Baron–Ferejohn model of bargaining over the division of a pie, in which bargaining ends as soon as the committee reaches ... [more ▼]

Committee voting has mostly been investigated from the perspective of the standard Baron–Ferejohn model of bargaining over the division of a pie, in which bargaining ends as soon as the committee reaches an agreement. In standing committees, however, existing agreements can be amended. This article studies an extension of the Baron–Ferejohn framework to a model with an evolving default that reflects this important feature of policymaking in standing committees: In each of an infinite number of periods, the ongoing default can be amended to a new policy (which is, in turn, the default for the next period). The model provides a number of quite different predictions. (i) From a positive perspective, the key distinction turns on whether the quota is less than unanimity. In that case, patient enough players waste substantial shares of the pie each period and the size principle fails in some pure strategy Markov perfect equilibria. In contrast, the unique Markov perfect equilibrium payoffs in a unanimity committee coincide with those in the corresponding Baron–Ferejohn framework. (ii) If players have heterogeneous discount factors then a large class of subgame perfect equilibria (including all Markov perfect equilibria) are inefficient. [less ▲]

A Coalitional Theory of Unemployment Insurance and Employment Protection

in Economic Theory (2013), 52

This paper examines the role of coalition formation in the empirically observed negative correlation between employment protection and unemployment benefit. We study an economy composed of four groups of ... [more ▼]

This paper examines the role of coalition formation in the empirically observed negative correlation between employment protection and unemployment benefit. We study an economy composed of four groups of agents (capitalists, unemployed people, low- and high-skilled workers), each one represented by a politician. Politicians first form political parties and then compete in a winner-takes-all election by simultaneously proposing policy bundles composed of an employment protection level and an unemployment benefit. We first show that, in the absence of parties (i.e., in a citizen-candidate model), low-skilled workers are decisive and support a maximum employment protection level together with some unemployment benefit. We then obtain that, under some conditions, allowing for party formation results in all policy equilibria belonging to the Pareto set of the coalition formed by high-skilled workers together with unemployed people. Policies in this Pareto set exhibit a negative correlation between employment protection and unemployment benefit. [less ▲]

A New Old Solution for Weak Tournaments

in Social Choice and Welfare (2012), 39

This article uncovers dynamic properties of the von Neumann–Morgenstern solution in weak tournaments and majoritarian games. We propose a new procedure for the construction of choice sets from weak ... [more ▼]

This article uncovers dynamic properties of the von Neumann–Morgenstern solution in weak tournaments and majoritarian games. We propose a new procedure for the construction of choice sets from weak tournaments, based on dynamic stability criteria. The idea is to analyze dynamic versions of tournament games. The exploration of a specific class of Markov perfect equilibria in these "dynamic tournament games" yields a new solution concept for weak tournaments—the A-stable set. The alternatives in an A-stable set constitute persistent, long-run policy outcomes in the corresponding dynamic tournament games. We find that, in any weak tournament, the class of A-stable sets coincides with that of von Neumann–Morgenstern stable sets. [less ▲]