Misspecified Politics and the Recurrence of Populism

Levy, Gilat; Razin, Ronny; Young, Allen M.

doi:10.1257/aer.20210154

Cited by 37 publications

(19 citation statements)

References 29 publications

(33 reference statements)

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“…Voters filter information through the lens of their identities-which results in polarization. Levy, Razin, and Young (2020) assume that some citizens hold oversimplified views of reality (ignoring certain relevant facts). Although their world view is incorrect, they occasionally win elections against rational citizens in a dynamic citizen-candidate model with learning.…”

Section: Theoretical Explorationsmentioning

confidence: 99%

The Political Economy of Populism

Guriev

Papaioannou

2022

Journal of Economic Literature

200

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We synthesize the literature on the recent rise of populism. First, we discuss definitions and present descriptive evidence on the recent increase in support for populists. Second, we cover the historical evolution of populist regimes since the late nineteenth century. Third, we discuss the role of secular economic factors related to cross-border trade and automation. Fourth, we review studies on the role of the 2008–09 global financial crisis and subsequent austerity, connect them to historical work covering the Great Depression, and discuss likely mechanisms. Fifth, we discuss studies on identity politics, trust, and cultural backlash. Sixth, we discuss economic and cultural consequences of growth in immigration and the recent refugee crisis. We also discuss the gap between perceptions and reality regarding immigration. Seventh, we review studies on the impact of the internet and social media. Eighth, we discuss the literature on the implications of populism’s recent rise. We conclude outlining avenues for further research. (JEL D72, E32, G01, J15, N30, N40, Z13)

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Section: Theoretical Explorationsmentioning

confidence: 99%

The Political Economy of Populism

Guriev

Papaioannou

2022

Journal of Economic Literature

200

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“…They define a notion of competition between agents with different regression specifications where the agent with a higher subjective confidence about their prediction error wins. Levy, Razin, and Young (2020) study a model of electoral competition between a misspecified simple worldview and the correct complex worldview. Voters believing in each worldview are more likely to vote if they expect a higher payoff difference between the policies that would be implemented under their own worldview and the competing worldview.…”

Section: Related Literaturementioning

confidence: 99%

Evolutionarily Stable (Mis)specifications: Theory and Applications

Libgober

2020

Preprint

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We introduce an evolutionary framework to evaluate competing (mis)specifications in strategic situations, focusing on which misspecifications can persist over a correct specification. Agents with heterogeneous specifications coexist in a society and repeatedly match against random opponents to play a stage game. They draw Bayesian inferences about the environment based on personal experience, so their learning depends on the distribution of specifications and matching assortativity in the society. One specification is evolutionarily stable against another if, whenever sufficiently prevalent, its adherents obtain higher expected objective payoffs than their counterparts. The learning channel leads to novel stability phenomena compared to frameworks where the heritable unit of cultural transmission is a single belief instead of a specification (i.e., set of feasible beliefs). We apply the framework to linear-quadratic-normal games where players receive correlated signals but possibly misperceive the information structure. The correct specification is not evolutionarily stable against a correlational error, whose direction depends on matching assortativity. As another application, the framework also endogenizes coarse analogy classes in centipede games.

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“…We build on a strand within this literature on how incorrect beliefs and behavior can interact (see Esponda and Pouzo 2016, for a general analysis of such games). These interactions can lead to persistent incorrect beliefs in domains like education (Levy and Razin 2017;Chauvin 2018), labor markets, overconfidence and beliefs about the ability of others (Heidhues, Kőszegi, andStrack 2018, 2020), and political competition (Levy, Razin, and Young 2022).…”

mentioning

confidence: 99%

A Behavioural Theory of Discrimination in Policing

Hübert¹,

Little²

2022

Preprint

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A large economic literature studies whether racial disparities in policing are explained by animus or by beliefs about group crime rates. But what if these beliefs are incorrect? We analyze a model where officers form beliefs using crime statistics, but don’t properly account for the fact that they will detect more crime in more heavily policed communities. This creates a feedback loop where officers over-police groups that they (incorrectly) believe exhibit high crime rates. This inferential mistake can exacerbate discrimination even among officers with no animus and who sincerely believe disparities are driven by real differences in crime rates.

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Misspecified Politics and the Recurrence of Populism

Cited by 37 publications

References 29 publications

The Political Economy of Populism

The Political Economy of Populism

Evolutionarily Stable (Mis)specifications: Theory and Applications

A Behavioural Theory of Discrimination in Policing

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