Negative Voters? Electoral Competition with Loss-Aversion

Lockwood, Ben; Rockey, James

doi:10.1093/ej/ueaa037

Cited by 19 publications

(17 citation statements)

References 70 publications

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“…3 Some recent papers have studied the implications of reference dependent preferences for political behavior. Alesina and Passarelli (2019) and Lockwood and Rockey (2015) study electoral competition when voters are loss averse. Passarelli and Tabellini (2017) study political protests in a setting where citizens become angry if they feel that they are treated unfairly relative to their (endogenous) reference point.…”

Section: Introductionmentioning

confidence: 99%

Economic Shocks and Populism: The Political Implications of Reference-Dependent Preferences

2020

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This paper studies electoral competition over redistributive taxes between a safe incumbent and a risky opponent. As in prospect theory, economically disappointed voters become risk lovers, and hence are intrinsically attracted by the more risky candidate. We show that, after a large adverse economic shock, the equilibrium can display policy divergence: the more risky candidate proposes lower taxes and is supported by a coalition of very rich and very disappointed voters, while the safe candidate proposes higher taxes. This can explain why new populist parties are often supported by economically dissatisfied voters and yet they run on economic policy platforms of low redistribution. We show that survey data on the German SOEP are consistent with our theoretical predictions on voters' behavior.

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Section: Introductionmentioning

confidence: 99%

Economic Shocks and Populism: The Political Implications of Reference-Dependent Preferences

2020

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“…Quattrone and Tversky (1998) were the first to argue that loss aversion may justify the incumbent's advantage. Lockwood and Rockey () propose and empirically test a model of electoral competition in which incumbents, because of loss aversion, adjust their platforms less than do challengers in response to a shock affecting voters' preferences. These authors assume that the shock is exogenous.…”

Section: Introductionmentioning

confidence: 99%

Loss Aversion in Politics

Alesina

Passarelli

2019

American J Political Sci

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We study loss aversion in elections by investigating a median voter model (full convergence in a two-candidate election) and a model of partial divergence of policy proposals. First, we show a status quo bias, an endowment effect, and a moderating effect of policies. Second, we show the occurrence of "long-term cycles" in policies with self-supporting movements to the right or the left. Finally, we prove that younger societies should be more prone to change and less affected by the status quo bias than older ones.

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“…Second, it is related to the growing literature on the consequences of behavioural biases and cognitive limitations on political choice (Alesina & Passarelli, ; Ashworth & Bueno de Mesquita, ; Glaeser & Ponzetto, ; Levy & Razin, ; Lockwood, ; Lockwood & Rockey, ; Ortoleva & Snowberg, ).…”

Section: Introductionmentioning

confidence: 99%

When the light shines too much: Rational inattention and pandering

Trombetta

2019

J Public Economic Theory

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Should voters always pay attention to politics? I explore the role of endogenous costly attention allocation in politics, combining insights from the growing literature on rational inattention with a standard model of political agency. I show that when attention to the action of the politician is endogenous, voters may choose to pay too much attention in equilibrium, and this induces too much political pandering. Moreover when attention to the action and to the state of the world are both endogenous, voters may not pay enough attention the state with respect to the ex ante optimum. A reduction in the total cost of attention does not correct this inefficiency and can even reduce welfare. This model can be a demand-driven explanation of the under-provision of analytical contents by news channels.

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Negative Voters? Electoral Competition with Loss-Aversion

Cited by 19 publications

References 70 publications

Economic Shocks and Populism: The Political Implications of Reference-Dependent Preferences

Economic Shocks and Populism: The Political Implications of Reference-Dependent Preferences

Loss Aversion in Politics

When the light shines too much: Rational inattention and pandering

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