Suchergebnisse

We study the interaction between competitive markets that produce large but unequally distributed welfare gains and elections through which the poor majority can redistribute income away from the rich minority. In our simple laboratory democracy, subjects first earn their income by trading in a double auction market and thereafter vote on redistributive policies in two-candidate elections. In addition, in one of the treatments subjects can attempt to influence the candidates' policy choices by transferring money to them. We observe very high levels of redistribution - even when transfers to candidates are possible - with little effect on market efficiency. Overall, the experimental results are explained by our equilibrium predictions.

We study the effect of social embeddedness on voter turnout by investigating the role of information about other voters' decisions. We do so in a participation game, in which we distinguish between early and late voters. Each late voter is told about one early voter's turnout decision. Cases are distinguished where the voters are allies (support the same group) or adversaries (with opposing preferences) and where they are uncertain about each other's preferences. Our experimental results show that the social embeddedness matters: this information increases aggregate turnout by approximately 50%. The largest effect is observed for allies. Early voters strategically try to use their first mover position and late voters respond to this.

We report the results of a laboratory experiment based on a citizen–candidate model with private information about ideal points. Inefficient political polarization is observed in all treatments; that is, citizens with extreme ideal points enter as candidates more often than moderate citizens. Second, less entry occurs, with even greater polarization, when voters have directional information about candidates' ideal points, using ideological party labels. Nonetheless, this directional information is welfare enhancing because the inefficiency from greater polarization is outweighed by lower entry expenses and better voter information. Third, entry rates are decreasing in group size and the entry cost. These findings are all implied by properties of the unique symmetric Bayesian equilibrium cutpoint pair of the entry game. Quantitatively, we observe too little (too much) entry when the theoretical entry rates are high (low). This general pattern of observed biases in entry rates is implied by logit quantal response equilibrium.

We experimentally study the common wisdom that money buys political influence. In the game, one lobbyist has the opportunity to influence redistributive tax policies in her favor by transferring money to two competing candidates. The success of the lobbying investment depends on whether or not the candidates are willing to respond and able to collude on lowtax policies that do not harm their relative chances in the elections. In the experiment, we find that lobbying is never successful when the lobbyist and candidates interact just once. By contrast, it yields substantially lower redistribution in about 40% of societies with finitelyrepeated encounters. However, lobbying investments are not always profitable, and profitsharing between the lobbyist and candidates depends on prominent equity norms. Our experimental results shed new light on the complex process of buying political influence in everyday politics and help explain why only relatively few corporate firms do actually lobby.

This paper studies the effects of patents and subsidies on R&D investment decisions. The theoretical framework is a two-stage game consisting of an investment and a market stage. In equilibrium, both patents and subsidies induce the same amount of R&D investment, which is higher than the investment without governmental incentives. In the first stage, the firms can invest in a stochastic R&D project which might lead to a reduction of the marginal production costs and in the second stage, the firms face price competition. Both stages of the game are implemented in a laboratory experiment and the obtained results support the theoretical predictions. Patents and subsidies increase investment in R&D and the observed amounts of investment in the patent and subsidy treatment do not differ significantly across both instruments. However, we observe overinvestment in all three treatments. Observed prices in the market stage converge to equilibrium price levels.