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Political Economics - Coggle Diagram
Political Economics
1. Collective Decisions
Examples of collective decisions
1$ Game
three voters and three alternatives
Borda election
Arrow Paradox
social welfare function
five requirements for social welfare functions (INPUT)
I
ndependence of irrelevant alternatives
N
ondictatorship
P
areto efficiency
U
restricted domain
T
ransitivity
Median voter theorem
median result in the one-dimensional case
multidimensional case
robustness of median voter theorem
2. Reference Model
Simple model of public finance
(preferred) policy preferences
Downsian electoral competition
probability that a party wins
Median voter equilibria
probability that a party wins
3. Probabilistic Voting
Motivation and Idea
Randomness
Ideology
Model
condition for voting for a certain party
vote share
ideological bias of the swing voter
optimal policy
5. Agency
Idea
"Leviathan"
Model with commitment
case of efficient competition
endogenous "rents"
case of inefficient competition
solution for
r
Model without commitment
idea
accountability
incumbents decision between reelection and and rent in current term
voter's view
6. Partisan Politics
Definition
Policy convergence
assumptions
probability of being elected
Policy divergence
Citizen-candidate model
sequence of decisions
implications
one candidate case
two candidate case
more than two candidates
Legislative bargaining
idea
one-round bargaining
several-round bargaining
results
4. Lobbying
Introduction
different forms of lobbying
Lobbying model
assumptions
contributions
objective function of the lobbyists
timing of events
solving the model
optimal contributions by one group
optimal decision by a party
interpretation
7. Redistribution ("Eat the Rich")
Motivation
stylized facts
Meltzer-Richard-Model
Assumptions
government: capital transfers
individuals: utility function over consumption and leisure
solving the model
result
criticism
Alternative politico-economic explanations
8. Economic Policy Reforms
Uncertainty
example 1: ex-ante chances of income gain
tranfer payments
example 2: ex-post income
Credibility
model of asymmetric informations
signaling game
strategies and "beliefs"
Compensation
assumptions
requirements for compensation mechanism
conclusion
War of attrition
Model - assumptions
Model - solutions
Further explanations