Generally, Democrats do not increase military spending, and Republicans do not raise welfare payments. Mostly, ruling politicians stick to the manifesto of their party. The current paper provides a theoretical explanation for this phenomenon that does not assume politicians or voters to be...

Much literature on political behavior treats politicians as motivated by reelection, choosing actions to signal their types to voters. We identify two novel implications of models in which signalling incentives are important. First, because incumbents only care about clearing a reelection...

We extend a model of wasteful state aid in Dewatripont and Seabright (2006, Journal of the European Economic Association 4, 513-522) by a supranational controlling authority. The model combines moral hazard and adverse selection to show that politicians fund wasteful projects to signal their...

This study develops a political competition model in which campaign platforms are partially binding. A candidate who implements a policy that differs from his/her platform must pay a cost of betrayal, which increases with the size of the discrepancy. I also assume that voters are uncertain about...

This paper investigates the role of persuasion mechanisms in collective decision-making. A biased sender adopts a Bayesian persuasion mechanism to provide a committee of uninformed receivers with signals about the unknown state of the world. We compare public persuasion with private persuasion....

This paper investigates the role of persuasion mechanisms in collective decision-making. A persuasion mechanism consists of a family of conditional distributions over the underlying state space and the generated noisy signals. A biased, perfectly informed sender adopts a persuasion mechanism to...

We present a model of persuasive signalling, where a privately-informed sender selects from a class of signals with different precision to persuade a receiver to take one of two actions. The sender's information could be either favourable or unfavourable. The receiver observes both the sender's...

We extend a model of wasteful state aid in Dewatripont and Seabright (2006, Journal of the European Economic Association 4, 513-522) by a supranational controlling authority. The model combines moral hazard and adverse selection to show that politicians fund wasteful projects to signal their...

This study investigates under what circumstances there exist a separating equilibrium in which competent leaders choose incompetent co-workers and incompetent leaders choose competent co-workers. The driving force for the competent leader is the insurance motive; if things go wrong he can blame...

This paper investigates how an office-motivated incumbent can use transparency enhancement on public spending to signal his budgetary management ability and win re-election. We show that, when the incumbent faces a popular challenger, transparency policy can be an effective signaling device. A...