According to a standard principle in free speech law, the remedy for falsehoods is "more speech," not enforced silence. But empirical research demonstrates that corrections of falsehoods can actually backfire, by increasing people's commitment to their inaccurate beliefs, and that presentation...

Politicians seeking reelection need voters to know what they have done for them. Thus, incentives may arise to spend more money where media coverage is higher. We present a simple model to explain the allocation of public spending across jurisdictions contingent on media activity. An incumbent...

This paper investigates how information affect voting behaviour. There exist a large literature suggesting that uninformed voters can use informational shortcuts or cues to vote as if they were informed. This paper tests this hypothesis using unique Swedish individual survey data on the...

Direct democracy is believed to lead to an allocation of resources that is closer to the median voter's preferences. If, however, the median voter suffers from bounded rationality, the allocation of public goods actually achieved should be affected. Based on recent empirical findings by economic...

Macroeconomic uncertainty affects the subjective distribution of individual expectations. Using four panel datasets, we document the effects of macro uncertainty on the mean expectation (first moment) and subjective uncertainty (second moment) of income forecasts. We find that macro uncertainty...

If the technological revolution which has taken place over the past decades has lowered information costs and if information costs increase in distance, distance should - ceteris paribus - become less important in determining international bank lending. We are using a dataset on assets and...

Although domestic mergers and acquisitions (M&As) in the financial services industry have increased steadily over the past two decades, international M&As were relatively rare until recently. This paper uses a novel dataset of over 2,300 mergers that took place between 1978 and 2001 to analyse...

Information costs and regulatory barriers are the main distinguishing features of international financial markets as compared to national financial markets. This paper presents a simple model of the impact of these factors on banks' cross-border activities and provides empirical evidence. Our...

We test whether the proactive use of instruments of direct democracy by voters can help to explain fiscal sustainability of 25 Swiss cantons. Using data of all cantonal popular votes since 1977, our results show that the fiscal reaction of cantonal governments to an increase in the debt to GDP...