Voting is likely the tool most strongly associated with the idea of democratic decisions,be it at national or local elections, decisions within a parliament, committees, juries oreven at company boards. In turn, the outcomes of voting processes potentially affecta large constituency. Therefore, understanding voter behavior is of major interest in avariety of fields. In this thesis we approach voter behavior from the perspective of PoliticalEconomics. More generally, we will address various aspects of individual behavior in thecommon arena.
Specifically, this thesis investigates the impact of information on the extent of strategic
voting (chapters and , explores the motives behind economic voting (chapter andapplies a similar toolbox to understand contributions to the public good in a non-trivialscenario (chapter . Together, these chapters intend to provide innovative ways to look atimportant questions in the political economics literature. We believe that our analyticalframework is informative not only about the specific environments in which it is usedhere, but also allows us to develop insights for similar and related policy arenas.
Traditionally, economic science has looked at these problems using a combination of
theoretical models, assuming fully rational agents, and applied econometrics. We deviatefrom the standard approach in both respects, by making use of behavioral modeling andexperimental methods. By behavioral modeling, we specifically mean modeling the sys-tematic ways in which people deviate from the fully rational agent model. We do so, forexample, by assuming some form of bounded rationality. To verify and better understandthe implications of behavioral modeling, we bring the study into the economics laboratory. The reason for this is that the environments we study (voting and public goods contribu-tions) are very complex and behavior in these environment is influenced simultaneouslyby several factors. The experimental laboratory provides a unique possibility to controlfor and isolate specific aspects of interest. By a combination of theory and experimentalmethods we try, then, to understand actual behavioral patterns of real economic agentsand investigate how the limits of standard economic models can be relevant for (publicpolicy) analysis and help us predict behavioral patterns in other (similar) situations.
Dropping the traditional assumption of full rationality turns out to be very important
in understanding behavior. In this thesis, we find strong support for bounded rationality. As an illustration, two chapters and look at a voting game with three candidates inwhich we vary the intensity of preferences, i.e., how a person’s best candidate is comparedto her second preferred candidate. Although it is intuitive that the chance of voting forone’s best candidate should increase in this distance, a fully rational analysis (i.e., NashEquilibrium), fails to capture this feature. The reason is that a fully rational agent shouldalways select the best strategy available (thus a best response function), regardless of howmuch ‘better’ it is. By applying a boundedly rational model (in this case, the QuantalResponse Equilibrium, introduced by McKelvey & Palfrey 1995) we switch to a betterresponse function, which does react to size differences. Using experimental data, we findstrong support for the theoretical analysis both in terms of comparative statics, but alsofor several of the point predictions. We find, for example, not only that a voter is morelikely to vote for her best candidate when the aforementioned distance in preference islarger, but also that in a three-way run, supporters of the least popular candidate aresignificantly more likely to switch away from their preferred candidate.
The use of experimental methods is also essential. For example, in the chapters on
strategic voting and we can manipulate and know, without any noise, peoples’ pref-erences - something that is impossible with observational data. As another example, inchapter we introduce the first experimental environment in which only economic consid-erations, and no political aspects, can influence voting decisions. Such an environment isthe only in which clear causation arguments can be made and in which the voting decisioncan be made without the many complex layers in which it is usually immersed. We areaware, however, that using the laboratory does not come without a cost. For example, inthis thesis the largest electorate contains 15 subjects. More generally, we need to be waryof the external validity of our results. We deal with this first by being upfront about thescope of the analysis and describing it in proper context, second by deriving theoreticalextrapolations whenever possible and third, by providing sufficient evidence that the ap-proach is informative for the specific situation so that we can derive valid inferences forrelated situations.
The use of behavioral modeling and experimental methods allows us also to look at
(preference) heterogeneity and complexity. This thesis explores heterogeneity in (social)preferences in two different ways. Chapters and introduce and manipulate preferenceheterogeneity with elements of the experimental design, while chapters and try tocapture/measure this heterogeneity by observing people’s behavior. Chapter for exam-ple, investigates and shows how some people demand more information about society andare more likely to vote against their own private interests while others simply supportthe candidate that is best for themselves. Chapter on a similar vein, show that peoplecan be grouped into those with low or high concerns for society, and that these groups
behave in distinct ways. We observe, also, that as the complexity of the environmentincreases, people tend to rely on simpler heuristics, or simpler strategies. For example,by increasing the complexity of the model of chapter in chapter we observe that theextent of strategic voting (a more complex strategy) is reduced. In chapter we see thatthe demand for information about community and national economic indicators is signif-icantly reduced in the most complex scenario, which requires more processing effort fromthe subjects. This is in line with the general argument in favor of bounded rationalitymodels: since the world is complex, people try to rely on what they perceive as mostrelevant, or, as chapter reveals, refrain from engaging in complex computations.
This thesis hopes to contribute to the literature on political economics. It reflects
important steps into analyzing the specific problems presented here and hopes to behelpful in providing insights for related topics. Elements presented here can also be usefulfor revisiting theoretical models and incorporating some of the systematic deviations fromthese models that we observe, improving prediction and policy development.
We now turn to describing briefly each of the remaining chapters of this thesis.
In chapter we theoretically and experimentally
study voter behavior in a setting characterized by plurality rule and mandatory voting,where voters choose from three options. We are interested in the occurrence of strategicvoting in an environment where Condorcet cycles may occur. In particular, we focuson how information about the distribution of preferences affects strategic behavior. Wealso vary the relative importance of the second preferred option to investigate how thisaffects the strategic vote. Quantal response equilibrium analysis is used to analyze thegame and proves to be a good predictor for the experimental data. Our results indeedshow that strategic voting arises, the extent of which depends on (i) the availability ofinformation; (ii) the relative importance of the intermediate candidate; (iii) the elec-torate’s relative support for one’s preferred candidate; and (iv) the relative position ofthe plurality-supported candidate in a voter’s preference ordering. Our results show thatinformation serves as a coordination device where strategic voting does not harm theplurality-preferred candidate’s chances of winning.
ior in a similar setting. In contrast to chapter voters in the same electorate may nowdiffer in how much they relatively value the three options. This introduces preferenceheterogeneity in the electorate. Three information conditions are tested: no information,in which voters know only their own preference ordering and the own benefits from eachoption; aggregate information, in which in addition they know the aggregate realizeddistribution of the preference orderings and full information, in which they also knowhow the relative importance given to the options are distributed within the electorate. As a general result, heterogeneity seems to decrease the level of strategic voting in ourexperiment. We observe however, both theoretically and experimentally that our main
results from chapter are robust to the preference heterogeneity introduced. Moreover,information about the aggregate distribution of preferences seems to be the element thatbest explains the observed differences in voting behavior.
Despite the vast literature on economic voting, spanning decades, there is little agree-
ment on the influence of economic considerations on approval of the government and votechoice. Part of the reason for this disagreement is the inherent complexity of the politicalenvironment. To isolate the effects of economic considerations we develop and present inchapter a laboratory experiment that allows us tovary these considerations at three levels: the individual, community and national econ-omy. Choices by a policymaker directly affect outcomes at each of these levels, allowingus to test for ‘egotropic’, ‘communotropic’, and ‘sociotropic’ voting. Our design allowsus to specifically observe which information is considered relevant by voters and to whatextent ‘the economy’ matters. Chapter offers what we believe to be the first exper-imental study to explicitly investigate the question of how multiple levels of economicconsiderations influence vote choice. We observe significantly positive demand for infor-mation, in a setting where standard economic reasoning would predict no informationdemand and pure egotropic (selfish) voting. We observe that the demand for informationdecreases with the complexity of the environment and that informed voters vote moresociotropically. Moreover, voters seem more ‘extreme’ in approval surveys then in actualvoting.
of preference for (group) efficiency can account for subjects’ contributions in public goodgames or if this can be attributed to noisy behavior. Using a boundedly rational equi-librium approach, we estimate the relative importance of efficiency concerns relative tonoise. Using data from a voluntary contribution mechanism experiment with heteroge-neous endowments and asymmetric information, we estimate a quantal response equilib-rium extension of a model in which subjects have preference for group efficiency. Underthe hypothesis of a homogeneous population most of the over-contribution seems to beexplained by noisy behavior. A different picture emerges when we introduce cross-subjectheterogeneity in concerns for group efficiency. In this case, a majority of the subjectsmakes contributions that are compatible with the hypothesis of preference for (group)efficiency. A formal likelihood-ratio test strongly rejects the models not allowing for noisein contributions and homogeneous subjects for the more general QRE extension withheterogeneous preferences for (group) efficiency coupled with noise in subjects’ behavior.
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