The rational choice framework assumes that individuals know what is in their self interest and make choices accordingly. Do they? When they go to the supermarket (in a developed country with a market economy) arguably they do act accordingly. In such settings, the individual knows, almost certainly, whether the choice would be beneficial, ex post. Indeed financial markets in the developed market economies (usually) possess the essential characteristics consistent with substantive rationality. However, it is simply not possible to make sense out of the diverse performance of economies and polities both historically and contemporaneously if individuals really knew their self interest and acted accordingly. Instead people act in part upon the basis of myths, dogmas, ideologies and "half-baked " theories. We argue here both that ideas matter, and that the way that ideas are communicated among people is crucial to building useful theories that will enable us to deal with strong uncertainty problems at the individual level.2 For most of the interesting issues in political and economic markets uncertainty, not risk, characterizes choice-making. Under conditions of uncertainty, individuals ' interpretation of their environment will reflect the

: Theory: The spatial model of elections can better be represented by using conditional logit than by multinomial logit. The spatial model, and random utility models in general, suffer from a failure to adequately consider the substitutability of candidates sharing similar or identical issue positions. Hypotheses: Multinomial logit is not much better than successive applications of binomial logit. Conditional logit allows for considering more interesting political questions than does multinomial logit. The spatial model may not correspond to voter decision-making in multiple-candidate settings. Multinomial probit allows for a relaxation of the IIA condition and this should improve estimates of the effect of adding or removing parties. Methods: Comparisons of binomial logit, multinomial logit, conditional logit, and multinomial probit on simulated data and survey data from a three-party election. Results: Multinomial logit offers almost no benefits over binomial logit. Conditional logit...

Claims about the Web and politics have commonly confounded two different things: retrievability and visibility, the large universe of pages that could theoretically be accessed versus those that citizens are most likely to encounter. While the governing assumption of much previous work has been that retrievability would translate inexorably into visibility, we cast doubt on that claim. Drawing on a large literature in computer science that ties a site’s visibility to the number of inbound hyperlinks it receives, this paper proposes a new methodology for measuring the link structure surrounding political Web sites. Our technique involves iterative, extremely largescale crawls away from political sites easily accessible through popular online search tools, and it uses sophisticated automated methods to categorize site content. In every community we examine, we find that a small handful of Web sites dominate. Online political communities on the Web thus seem to function as “winners take all ” networks, a fact that would seem to have widespread implications for politics in the digital age.

A basic premise of representative democracy is that all those subject to policy should have a voice in its making. However, policies enacted by electorally accountable governments often fail to reflect the interests of disadvantaged minorities. This paper exploits the institutional features of political reservation, as practiced in Indian states, to examine the role of mandated political representation in providing disadvantaged groups influence over policymaking. I find that political reservation has increased transfers to groups which benefit from the mandate. This finding also suggests that complete policy commitment may be absent in democracies, as is found in this case. (JEL D72, D78, H11, H50) There are strong moral and economic arguments suggesting that it is in the interest of society to improve the economic standing of historically disadvantaged minority groups. 1 In democracies, the use of legislative policy to bring about such improvements remains contingent on legislator behavior, and arguably, a significant barrier to the introduction of such policies is

This paper uses political reservations for women in India to study the impact of women’s leadership on policy decisions. Since the mid-1990’s, one third of Village Council head positions in India have been randomly reserved for a woman: In these councils only women could be elected to the position of head. Village Councils are responsible for the provision of many local public goods in rural areas. Using a dataset we collected on 265 Village Councils in West Bengal and Rajasthan, we compare the type of public goods provided in reserved and unreserved Village Councils. We show that the reservation of a council seat affects the types of public goods provided. Specifically, leaders invest more in infrastructure that is directly relevant to the needs of their own genders.

I first show that if there are more than two potential candidates in the Hotelling-- Downs model of the simultaneous choice of positions by politicians then an equilibrium fails to exist in a wide range of situations. Subsequently I study a temporal model in which candidates are free to act whenever they wish. For the case of three potential candidates I find that in every equilibrium exactly one candidate enters. There is always an equilibrium in which the position chosen by the entrant is the median; the only other possibility is that the position chosen is far from the median. Journal of Economic Literature Classification Numbers: C72, D72. I am grateful to Eddie Dekel, Jack Leach, Roger Myerson, Tom Palfrey, Al Slivinski, and an associate editor for very helpful comments, and to the Social Sciences and Humanities Research Council of Canada for financial support. E-mail address: Osborne@McMaster.ca. 1. Introduction Hotelling's (1929) model of spatial competition, as interpreted ...

In this paper, I discuss recent developments in political economy. By focusing on the microeconomic side of the discipline, I present an overview of current research on four of the fundamental institutions of a political economy: voters, politicians, parties and governments. For each of these topics, I identify and discuss some of the salient questions that have been posed and addressed in the literature, present some stylized models and examples, and summarize the main theoretical findings. Furthermore, I describe the available data, review the relevant empirical evidence, and discuss some of the challenges for empirical research in political economy.

Practical computer (in)security is largely driven by the existence of and knowledge about vulnerabilities, which can be exploited to breach security mechanisms. Although the discussion on details of responsible vulnerability disclosure is controversial, there is a sort of consensus that better information sharing is socially beneficial. In the recent years we observe the emerging of “vulnerability markets ” as means to stimulate exchange of information. However, this term subsumes a broad range of different concepts, which are prone to confusion. This paper provides a first attempt to structure the field by (1) proposing a terminology for distinct concepts and (2) defining criteria to allow for a better comparability between different approaches. An application of this framework on four market types shows notable differences between the approaches.

This paper examines competition in the standard one-dimensional Downsian model of two-candidate elections, but where one candidate #A# enjoys an advantage over the other candidate #D#. Voters' preferences are Euclidean, but any voter will vote for candidate A over candidate D unless D is closer to her ideal point by some #xed distance #. The location of the median voter's ideal point is uncertain, and its distribution is commonly known by both candidates. The candidates simultaneously choose locations to maximize the probability of victory. Pure strategy equilibria often fails to exist in this model, except under special conditions about # and the distribution of the median ideal point. We solve for the essentially unique symmetric mixed equilibrium, show that candidate A adopts more moderate policies than candidate D, and obtain some comparative statics results about the probability of victory and the expected distance between the two candidates' policies. JEL classi#cation numbers: ...

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