measure of secession risk and perform the comparative static analysis of the equilibrium policy location and of the secession …-regional heterogeneity of preferences. -- majority voting ; secession risk ; cultural distinctiveness ; conflict ; overlapping regional …We build a model of secession crises where voters may wish to accommodate the minority to prevent secession. We show …

Uncertainty in election outcomes generates politically induced regulatory risk. For monopoly regulation, political … parties' risk attitudes towards such risk depend on a fluctuation effect that hurts both parties and an output …-expansion effect that benefits at least one party. Irrespective of the parties' risk attitudes, political parties have incentives to …