Confirmatory News

This paper investigates how competition in the media affects the quality of news. In our model, demand for news depends on the market perception of the media's ability to receive correct information: it is positive if and only if news is potentially useful for the voting decision. When the media receives information which contradics commonly shared priors, it either reports this information or it confirms the priors: "most likely, my information is correct, but my potential buyers may be unable to assess the quality of news and attribute it according to common priors". We ask whether competition may help to elicit information from the media. Our answer is positive when news covers issues on which the priors are sufficiently precise, or the follow-up quality assessment is a likely event. However, when news concerns controversial issues and it is hardly possible to asses its quality, competitive pressures induce confirmatory reporting.Competition in the media, quality of news, common priors, reputational cheap-talk

Campaign Promises and Political Factions

This paper builds a dynamic model of electoral competition with nonbinding campaign promises. We find that campaign promises by a candidate for office signal her political preferences and public policy that she intends to implement. The reason is that electoral competition induces her to pander campaign promises to political interests by a minimal majority of citizens. If their votes bring her in office, she has to raise them once again in order to be re-elected. For that, she needs to fulfill her electoral promises. To minimize the cost of pandering to re-election if in office, a candidate gives campaign promises that she would like to fulfill the most. She fulfills them if in office, unless the cost of fulfillment lies above the benefit from re-election. We show, furthermore, that representatives by a minimal majority of citizens form a faction to coordinate their electoral strategies, and we investigate the consequences of such political collusion.Electoral promises, pork-barrel politics, political parties

Congruence Among Voters and Contributions to Political Campaigns

This paper builds a theory of electoral campaign contributions. Interest groups contribute to political campaigns to signal their private information on the valence of candidates for office. Campaign contributions by an interest group enhance electoral fortunes by a candidate who is valent with this group. The candidate preferred by an interest group whose private information is the most precise receives the highest contributions and wins political office. Campaign contributions are smaller than donor electoral sorting benefits.Campaign contributions, incumbency advantage

Insider Privatization and Careers - A Study of a Russian Firm in Transition

We study how transition has affected human resource policies of a Russian heavy industry firm. Our data set contains personnel files of 1538 white-collar workers over 17 years: from 1984 to 2000. We find career paths before the first year of Gaidar's reforms, 1992, when Russian transition to a market economy began. After 1992, promotions are blocked, because both (i) more managers are hired from the outside, and (ii) fewer managers leave the firm. A possible reason is an extremely weak outsider property rights enforcement in Russia. Keywords: institutional environment and internal labor market, transition to a market economy.

Confirmatory News

This paper investigates how competition in the media affects the quality of news. In our model, demand for news depends on the market perception of the media's ability to receive correct information: it is positive if and only if news is potentially useful for the voting decision. When the media receives information which contradics commonly shared priors, it either reports this information or it confirms the priors: "most likely, my information is correct, but my potential buyers may be unable to assess the quality of news and attribute it according to common priors". We ask whether competition may help to elicit information from the media. Our answer is positive when news covers issues on which the priors are sufficiently precise, or the follow-up quality assessment is a likely event. However, when news concerns controversial issues and it is hardly possible to assess its quality, competitive pressures induce confirmatory reporting

A Passion for Democracy

Theories of voter turnout assume that an active voter receives a warm glow from doing a good deed to like-minded compatriots. What tells him that he is doing them a good deed by voting for this or that candidate or policy? Their own votes are naturally available feedback. We propose a dynamic model of voting with asymmetric information in which being among the majority provides a voter with a positive feedback on his voting decision, increasing his self confidence, hence, his warm glow from voting in the future. The voters who cannot tell which policy is superior, try to pool with a majority (so as to get involved in the democratic process). They vote much according to the available public information, however, without herding. We find these effects in the unique equilibrium of our voting game. Les théories de vote supposent qu'un électeur reçoit de la satisfaction ou du « warm glow » quand il vote. Le « warm glow » est créé par la confiance d'une bonne action envers ses compatriotes. Qu'est-ce qui fait croire à un électeur qu'il fait une bonne action envers ses compatriotes en votant pour telle ou telle plateforme politique? Leurs propres votes sont un signal naturellement disponible. Nous proposons un modèle dynamique de vote avec des informations asymétriques dans lequel la majorité fournit un signal positif sur le choix de vote. Ce signal augmente la confiance de l’électeur en ses choix de vote, et par conséquent, son « warm glow » de votes prochains. Les électeurs qui ne peuvent pas distinguer quelle plateforme politique est supérieure essaient d'imiter le vote de majorité afin de bâtir la confiance en ses choix de vote et s'impliquer dans le processus démocratique. Ils votent surtout selon les informations publiques disponibles, cependant, sans « herding ». Nous trouvons ces effets dans l'équilibre unique de notre jeu de vote.expressive voting, habitual voting, complementarities in voting, self-signaling, public information and the vote, status quo bias., vote expressif, vote habituel, complémentarités au vote, self-signaling, information publique et vote, tendance au statu qo.

Congruence Among Voters and Contributions to Political Campaigns

This paper builds a theory of electoral campaign contributions. Interest groups contribute to political campaigns to signal their private information on the valence of candidates for office. Campaign contributions by an interest group enhance electoral fortunes by a candidate who is valent with this group. The candidate preferred by an interest group whose private information is the most precise receives the highest contributions and wins political office. Campaign contributions are smaller than donor electoral sorting benefits

Sharing cost of network among users with differentiated willingness to pay

We consider the problem of sharing the cost of efficient uncongested tree-network among users with differentiated willingness to pay for the good supplied through the network. We nd that the associated value sharing problem is convex, hence, the core is large and we axiomatize a new, computationally simple core selection based on the idea of proportionality