Production and Distribution in Political-Economic Systems: a Non-Atomic Game

Societies are often compared in terms of the relative shares of the domestic product controlled by government but we don’t have much by way of analytical tools to allow us to think about the ways in which changes in these shares affect the characteristics of production and distribution. This paper treats production and distribution as a cooperative game with a continuum of players. Outcomes depend on politics and economics. It has a number of unexpected results. Among these are that relative shares do not depend on the majority rule the production function and that the characteristics of inegalitarian and egalitarian systems may converge

Endogenous party platforms: 'stochastic' membership

We propose a model of endogenous party platforms with stochastic membership. The parties' proposals depend on their membership, while the membership depends both on the proposals of the parties and on the unobserved idiosyncratic preferences of citizens over parties. An equilibrium of the model obtains when the members of each party prefer the proposal of the party to which they belong to, rather than the proposal of the other party. We prove the existence of such an equilibrium and study its qualitative properties. For the cases in which parties use either the average or the median to aggregate the preferences of their members, we show that if the unobserved idiosyncratic characteristics of the parties are similar, then parties make different proposals in the stable equilibria. Conversely, we argue that if parties differ substantially in their unobserved idiosyncratic characteristics, then the unique equilibrium is convergent.Financial support from the Asociación Mexicana de Cultura and from Project No. ECO2013-42710-P from the Spanish Ministry of Science and Innovation is gratefully acknowledged