Appointing public officials is an important feature of modern democracies. Citizens are periodically asked to select amongst different candidates whom they want to appoint as public officials in central or local governments. There may be a trade-off on the extent to which candidates are seen as...

Microeconomic evidence suggests price changes are either very small, or large. The theory of inferential expectations predicts this phenomena if agents use a low test size, reflecting a reluctance to change their minds on the basis of evidence.

We incorporate inferential expectations into the Barro-Gordon model (1983a) of time inconsistency and consider reputational equilibria. The range of sustainable equilibria shrinks as the private sector becomes more belief-conservative.

Does speculative trade reduce mispricing - and help create efficient markets - or drive prices further from fundamentals? We analyse betting exchange trading, on 9,562 U.K. horse races in 2013 and 2014, to find out. Crucially, as each race is run, the fundamental value of bets is unambiguously...

Recent evidence suggests that the fastest algorithmic traders in financial markets profit at the expense of slower traders. One solution gaining traction is a `speed-bump', which introduces a delay between the time in which an order is submitted, and when it is processed. We conduct an impact...

Asset prices tend to cluster at round numbers. We examine betting exchange data on U.K. horse races to establish whether limited cognition is partially responsible for this clustering. The key tool in this study is the stark increase in cognitive load faced by traders during races compared to...

A stationary bilinear (SB) model can be used to describe processes with a time-varying degree of persistence that depends on past shocks. An example of such a process is inflation. This study develops methods for Bayesian inference, model comparison, and forecasting in the SB model. Using...

We analyze a group all-pay auction with a group specific public good prize in which one group follows a weakest-link and the other group follows a best-shot impact function. This type of game depicts situations in which the best-shot group is an attacker and the other group is a defender. We...

This paper estimates effects of exposure to compulsory voting on individuals' political preferences, through a regression discontinuity framework. These results are important to understand effects of a voting system transition. The identification comes from Brazil's dual voting system: voluntary...

People who belong to the same group often behave alike. Is this because people with similar preferences naturally associate with each other or because group dynamics cause individual preferences and/or the information that they have to converge? This is the question that we address with a...