In this paper we analyze elections when voters underestimate the correlation between their information sources (“correlation neglect”). We find that this cognitive bias can improve political outcomes. We show that the extreme beliefs which result from correlation neglect induce some voters to base their vote on information rather than on political preferences. We characterize conditions on the distribution of preferences under which this induces higher vote shares for the optimal policies and better information aggregation. (JEL D72, D83)
Abstract:The paper analyzes the relation between religious beliefs, religious participation and social cooperation. In particular, we focus on religions that instill beliefs about the connection between rewards and punishments and social behaviour. We show how religious organizations arise endogenously, analyze their e¤ect on social interactions in society and identify a "spiritual" as well as a "material" payo¤ for being religious. We show that religious groups that are more demanding in their rituals are smaller, more cohesive, and are composed of individuals whose beliefs are more "extreme". We use our framework to analyze the response of individual beliefs and religious membership to correlated shocks in society, such as natural disasters or periods of prosperity.1 Department of Economics, LSE. Email: g.levy1@lse.ac.uk; r.razin@lse.ac.uk. We thank Stephen Hansen for valuable research assistance, and the editor of this journal and two anonymous referees for helpful comments.The ESRC (grant number RES-000-22-1856) and the ERC (grant number 210385) provided …nancial support.
In this paper we focus on strategic voting behavior when both an election and a signaling motivation affect voters' behavior. We analyze a model of elections with two candidates competing on a one-dimensional policy space. Voters are privately and imperfectly informed about a common shock affecting the electorate's preferences. Candidates are assumed to choose policy in response to information gleaned from election results and according to exogenous factors that may lead to polarization in candidates' policy choices. We analyze a subset of symmetric equilibria in which strategies are symmetric to candidates' names and private signals (CSS equilibria). We show that signaling and election motivations pull voters to vote in different directions. We provide conditions that show the relation between the amount of information aggregated in the election and the motivation that influences voting behavior the most. Finally, we show that when candidates are responsive and polarized, all CSS equilibria are inefficient in the limit.
We analyze a cheap talk game, a-la Crawford and Sobel (1982), in a multidimensional state and policy space. A feature of the multidimensional state space is that communication on one dimension often reveals information on others. We show how this feature imposes bounds on communication.
In this review, we survey the economics literature on echo chambers. We identify echo chambers as arising from a combination of two phenomena: ( a) the choice of individuals to segregate with like-minded ones, i.e., the creation of chambers, and ( b) behavioral biases that induce polarization when individuals exchange beliefs in these chambers, i.e., the echo. We summarize the literatures on these two phenomena and suggest how to combine the two literatures to gain insights about the effects of echo chambers on economic and political outcomes. We end by suggesting pathways for future research and discussing policy interventions to alleviate echo chambers.
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