Essays in Aggregate Information, the Media and Special Interests

Essays in Aggregate Information, the Media and Special Interests

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The influence of special interests and the important role of the media in modern democracies are undeniable. In this dissertation, we employ different tools, namely game theory, experiments and models of political economy, to delve into this important problem. In the first chapter, we approach this issue from a game-theory perspective. In an anonymous dynamic setting we add the assumption that there is a qplannerq, who knows and selectively reveals aggregate information to maximize his objective function. We find that this approach yields a useful refinement of self-confirming equilibrium. We also show that in some cases partial information revelation is optimal. Finally, our model indicates that affirmative action may be desirable, demonstrating the value of generating information about special social groups. In the second chapter we examine the effects of the release of aggregate information experimentally. We perform a series of experimental sessions of a version of the qcentipede gameq with aggregate information release. With a payoff structure similar to previous experiments, we find that revealing public information causes strong convergence to Nash equilibrium and leads to significantly lower aggregate payoffs. However, after slightly changing the payoff structure of the game, the effects of public information shift dramatically in the opposite direction. Theories that assume that people exhibit qconditional moral motivationq are supported by our results. In the third chapter, we focus on the political economy aspect of the media and special interests. If the investment decisions of private firms determine economic growth and employment, voters have a common interest in making their governments commit to policies that encourage private investments. However, governing parties may, in general, renege on promises for economic stability. Campaign contributions by firm interests tend to restraint the scope of this opportunism and provide a commitment device. This is achieved if the private sector in the political game gets to move after the policy is chosen, contributing to the governing party or to its rivals. Anticipating this, the governing party will choose not to follow opportunistic policies and firms will choose a high level of investment and society as a whole may benefit.This is achieved if the private sector in the political game gets to move after the policy is chosen, contributing to the governing party or to its rivals.


Title:Essays in Aggregate Information, the Media and Special Interests
Author:
Publisher:ProQuest - 2008
ISBN-13:

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