« Back to Results

Political Economy

Paper Session

Sunday, Jan. 7, 2018 1:00 PM - 3:00 PM

Marriott Philadelphia Downtown, Meeting Room 413
Hosted By: Econometric Society
  • Chair: Cesar Martinelli, George Mason University

Reward and Punishment in a Regime Change Game

Mehdi Shadmehr
University of Calgary
Stephen Morris
Princeton University


We analyze the problem of a revolutionary leader who wishes to induce highest level of citizen participation in a revolutionary movement to maximize the likelihood of regime change. The regime collapses if the aggregation of citizen revolutionary efforts exceeds the threshold of regime’s strength about which citizens have private information---citizens engage in a continuous action global game of regime change. Revolutionary efforts are punished by the existing regime, and the leader must decide how to allocate psychic (or other) rewards to different levels of participation. This paper identifies the leader's optimal reward scheme. The optimal revolutionary efforts induced by the leader features a distinct group of (endogenously) optimistic citizens who exert an endogenously maximum revolutionary effort that depends on the regime’s punishment. This result resonates with Lenin’s notion of revolutionary vanguards. Effort levels continuously declines for less (endogenously) optimistic citizens. Substantively, the paper combines the notions of “people-oriented” and “task-oriented” revolutionary leaders by showing that even charismatic, people-oriented, transformative leaders, in inspiring revolutionary actions, face a strategic tradeoff of screening nature because they are uncertain about the citizens’ (endogenous) characteristics---in particular, their endogenous beliefs about the likelihood of success. The optimal resolution of this tradeoff results in the emergence of a distinct group of most optimistic citizens who put in the same (endogenously) maximum revolutionary effort (bunching at the top), resembling Lenin’s professional revolutionaries. Methodologically, the paper analyzes screening in a global game of regime change with a continuum of players and continuous actions that has various applications, including charitable contribution and crowd funding.

Taxing Unwanted Populations: Fiscal Policy and Conversions in Early Islam

Mohamed Saleh
Toulouse School of Economics
Jean Tirole
Toulouse School of Economics


Hostility towards a population, whether on religious, ethnic, cultural or socioeconomic grounds, confronts rulers with a trade-off between taking advantage of population members' eagerness to keep their status and inducing them to "comply" (conversion, quit, exodus or any other way of pleasing the hostile rulers). This paper first analyzes the rulers' optimal mix of discriminatory and non-discriminatory taxation, both in a static and an evolving environment. It thereby derives a set of unconventional predictions. The paper then tests the theory in the context of Egypt's conversion to Islam after 641 using novel data sources. The evidence is broadly consistent with the theoretical predictions.

Political Kludges

Keiichi Kawai
University of New South Wales-Sydney
Ruitian Lang
Australian National University
Hongyi Li
University of New South Wales-Sydney


This paper explores the origins of policy complexity. It studies a model where policy is difficult to undo because policy elements are entangled with each other. Policy complexity may accumulate as successive policymakers layer new rules upon existing policy. Complexity emerges and persists in balanced democratic polities, when policymakers are ideologically extreme, and when legislative frictions impede policymaking. Complexity begets complexity: simple policies remain simple, whereas complex policies grow more complex. Patience is not always a virtue: farsighted policymakers may engage in obstructionism, deliberately introducing complex policies to hinder future opponents.

Ethical Voting in Multicandidate Elections

Laurent Bouton
Georgetown University
Benjamin G. Ogden
Texas A&M University


We study the behavior of ethical voters in multicandidate elections. We consider
two of the most-widely used electoral rules around the world: the plurality rule and
the majority runoff rule. Our results confirm the promises of the ethical voter model:
the predictions are empirically sound and much crisper than those of the pivotal voter
model. There are two types of equilibria: (i) the sincere voting equilibrium (in which
voters vote for their most-preferred candidate), and (ii) Duverger's law equilibria
(in which all majority voters vote for the same majority candidate). We prove that
an equilibrium always exists, and that it is unique for a broad range of parameter
values. Moreover, the sincere voting equilibrium never coexists with a Duverger's law
equilibrium. We can also identify the features of an election that favor sincere voting.
Quite intuitively, the incentives to vote sincerely are stronger when (i) the utility
differential between the two majority candidates is large, (ii) the utility differential
between the less preferred majority candidate and the minority candidate is small,
(iii) the minority group is small, and (iv) the majority is evenly divided. Comparing
plurality and majority runoff, we find that the incentives to vote sincerely are stronger
under the latter. This result is consistent with the findings of the empirical literature
studying the influence of the electoral system on the number of candidates.
Mehmet Ekmekci
Boston College
Giacomo Ponzetto
CREI, Pompeu Fabra University, IPEG, & Barcelona GSE
Sevgi Yuksel
University of California-Santa Barbara
Timothy Feddersen
Northwestern University
JEL Classifications
  • D7 - Analysis of Collective Decision-Making