We propose a theory of democratic backsliding where citizens' retrospective assessment of an incumbent politician depends on expectations that are endogenous to the incumbent's behaviour. We show that democratic backsliding can occur even when most citizens and most politicians intrinsically value democracy. By challenging norms of democracy, an incumbent can lower citizens' expectations; by not doubling down on this challenge, he can then beat this lowered standard. As a result, gradual backsliding can actually enhance an incumbent's popular support not despite but because of citizens' opposition to backsliding. This mechanism can only arise when citizens are uncertain enough about incumbents' preferences (e.g. owing to programmatically weak parties). Mass polarization, instead, can reduce the occurrence of backsliding while simultaneously increasing its severity.
We use an interactive epistemology framework to provide a systematic analysis of some solution concepts for games with asymmetric information. We characterize solution concepts using expressible epistemic assumptions, represented as events in the universal type space generated by primitive uncertainty about the payoff relevant state, payoff irrelevant information, and actions. In most of the paper we adopt an interim perspective, which is appropriate to analyze genuine incomplete information. We relate ∆-rationalizability (Battigalli and Siniscalchi, 2003) to interim correlated rationalizability (Dekel, Fudenberg, and Morris, 2007) and to rationalizability in the interim strategic form. We also consider the ex ante perspective, which is appropriate to analyze asymmetric information about an initial chance move. We prove the equivalence between interim correlated rationalizability and an ex ante notion of correlated rationalizability.
We investigate how social status concerns may affect voters’ preferences for redistribution. Social status is given by a voter’s relative standing in two dimensions: consumption and social class. By affecting the distribution of consumption levels, redistribution modifies the weights attached to the two dimensions. Thus, redistribution not only transfers resources from the rich to the poor, but it also amplifies or reduces the importance of social class differences. Social status concerns can simultaneously lead some members of the working class to oppose redistribution and some members of the socioeconomic elites to favor it. They also give rise to interclass coalitions of voters that, despite having different monetary interests, support the same tax rate. We characterize these coalitions and discuss the resulting political equilibrium.
This article introduces a model of war and peace in which leaders believe that their adversaries might be crazy types who always behave aggressively, regardless of whether it is strategically optimal to do so. In the model, two countries are involved in a dispute that can either end in a peaceful settlement or escalate into ‘limited war’ or ‘total war.’ If it is common knowledge that the leaders of the countries are strategically rational, then the only equilibrium outcome of the model is peace. Yet if a leader believes that there is a chance that her adversary is a crazy type, then even a strategically rational adversary may have an incentive to adopt a madman strategy in which he pretends to be crazy. This leads to limited war with positive probability, even when both leaders are strategically rational. The article shows that despite having two-sided incomplete information, the model has a generically unique equilibrium. Moreover, the model identifies two countervailing forces that drive equilibrium behavior: a reputation motive and a defense motive. When the prior probability that a leader is crazy decreases, the reputation motive promotes less aggressive behavior by that leader, while the defense motive pushes for more aggressive behavior. These two forces underlay several comparative statics results. For example, the study analyzes the effect of increasing the prior probability that a leader is crazy, and the effect of changing the relative military strengths of the countries, on the equilibrium behavior of both leaders. The analysis also characterizes the conditions under which the madman strategy is profitable (or not), which contributes to the debate in the literature about its effectiveness.
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