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Economy of Elections

Economy of Elections. Krystal Okonkwo, Millicent Usoro , Paul Strader , Charles Tilley, William Warren . Public Choice Model. Models Voters, Politicians and Bureaucrats as self-interested. Methodologically individualistic: Public interest is the aggregation of private decision makers

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Economy of Elections

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  1. Economy of Elections Krystal Okonkwo, Millicent Usoro, Paul Strader, Charles Tilley, William Warren

  2. Public Choice Model • Models Voters, Politicians and Bureaucrats as self-interested. • Methodologically individualistic: Public interest is the aggregation of private decision makers • Positive Economics • Utility Maximization

  3. Game Theory • Cooperative games – People only form coalitions to maximize their own utility. • As groups increase individual value decrease so coalitions are unstable. • Logrolling or Vote-trading :: quid pro quo

  4. Pareto Optimality • Pareto Optimality: Policies that benefit some people and hurt no one. • Externalities: effects of a decision on a third party not considered – Imperfect Information • Negative Or Positive

  5. Negative Externalities Cost, P If there are no externalities, P0Q0 is the equilibrium S1 = Marginal Social Cost If there are externalities, the marginal social cost differs from the marginal private cost, and P0 is too low and Q0 is too high to maximize social welfare S0 = Marginal Private Cost P1 Cost of externality P0 D = Marginal Social Benefit Q Q1 Q0 21-5

  6. Government Failure • Failure of Market Outcome: Market is functioning properly but not achieving goals • 3 Criteria necessary to correct a problem • Recognize • Will • Ability • Government Interaction Worsens the situation

  7. Median Voter Theorem • Fundamental process of democracy • Politicians will move toward to the other extreme • Explains why extremists won’t get elected • Ambiguity of political ideology and actions

  8. Assumptions • Political preference ordered from left to right • Single-peaked and sloped downward • Two-party system/two candidates • Only one political question

  9. Median Voter Model • Simple model of demand aggregation • One-dimensional spectrum • Center becomes smaller and smaller • Elastic demand • Primary elections vs. national election

  10. An Illustration of the Median Voter • Three individuals • Al ($5.00), Bob ($10.00), Charlie ($20.00) • Bob is the median voter • Weak form vs. strong form

  11. OPTIONS PATTERN OF VOTES RESULT $10 vs. $20 A: 10 B: 10 C: 20 10 $5 vs. $20 A: 5 B: 5 C: 20 5 $5 vs. $16 A: 5 B: 5 C: 16 5 $10 vs. $5 A: 5 B: 10 C: 10 10

  12. Limitations • No supply side of the public sector • Complex policies cannot be applied • Not applicable to multimodal issues

  13. Gerrymandering is the process of redrawing election districts for political purposes Gerrymandering Elbridge Gerry – 1812 Massachusetts Governor Originally benefitting Democratic-Republicans

  14. Three Methods of Gerrymandering • Cracking-Spreading voters of one party across multiple districts to diminish their voting power • Packing-Concentrating voters of one party in one district to diminish their broader voting power • Sweetheart-Agreement between two parties to redraw districts to favor incumbents

  15. General Redistricting Practices • Reapportionment of Congressional seats occurs every 10 years with new Census • Based on change in seats, each state legislature redistricts to uphold doctrine of “one person, one vote” (Wesberry v. Sanders 1964) • http://www.redistrictinggame.org/launchgame.php?level=basic&mission=2

  16. Collusion Collusion is an effective method to achieve sweetheart districts The Democratic and Republican parties collude to maintain the status quo, ensuring incumbents achieve re-election

  17. Racial Gerrymandering • Voting Rights Act of 1965 allowed for the creation of majority-minority districts • Aim is to help systematically disenfranchised populations • Can be viewed as either packing or cracking based on specifics of district

  18. Illinois Congressional District 4 • Created in a 1990 court order • “Earmuff District” • 73.8% Hispanic • Rep. Luis Gutierrez (D)

  19. Externalities • For those who do not support the majority party, gerrymandering represents a negative externality • Various tests have been developed to assess election districts, the most common measure is compactness • In most measures of compactness, scores range from 0 to 1, 1 being a perfectly compact district

  20. Measures of Compactness • Polsby-Popper Score

  21. Measures of Compactness • Roeck and Ehrenburg Tests

  22. Condorcet Paradox

  23. What is it? • Choosing who to elect • When there are only two candidates: chose the one who would likely get the most votes • What do we do when there are more than two candidates • Everybody adds their own rank of to each candidate • But is there a social choice that reflects the will of the people

  24. If we consider a situation where we have three voters and three candidates Each voter ranks the candidates in different orders of preference The first voter prefers A to B to C The Second: B to C to A The Third: C to A to B

  25. Given this situation, regardless of who the “social choice” selects, in other words who wins the election, two thirds of the voters will be dissatisfied A social choice function takes people’s preferences and comes out with the single alternative to win the election and please the most people This paradox shows however that the function cannot always pick the best outcome A candidate who can beat all the others in head to head comparisons is called a Condorcet winner

  26. Selection of the Condorcet Winner • The Condorcet Method provides a solution to the paradox • Whichever candidate would beat all other candidates in head to head elections is the Condorcet winner • I.e. If A would beat B head to head and would beat C head to head then A is the overall Condorcet winner.

  27. Many studies have been dedicated to finding the probablilities of the paradox occuring • One of two probabilistic models were used for most of the findings • multinomial equiprobable model(Impartial Culture condition) • Anonymous Culture Condition(doesn’t take voter identity into account)

  28. Maximal Culture Assumption • MC- used to generate profiles of preference • “neutral towards the alternatives and tends to characterize “close” elections”

  29. Probability of Paradox under MC • First let the set {A,B,C} be a given set of alternatives or in the case of elections candidates • Voters can have six linear preference orders for these three candidates • ABC - BCA • ACB - CBA • BAC - CAB

  30. Prob. Con’t. • The probability of Condorcet's paradox in three-alternative elections under the Maximal Culture condition is given by: • 11/120 +[ (99L4+341L3+474L3+305L+209)/(120(L+1)5)] • This theorem is a representation of the probability of the Condorcet paradox occurring under MC as a function of the parameter L

  31. Expected probability • P(n,p) is the probability of a Condorcet winner where n is the number of voters and p is a vector showing the probability that a randomly selected voter has any of six linear rankings of the three candidates, assume all values for p are equally likely • P(n,p) given by 15(n+3)2/[16(n+2)(n+4)]

  32. Vote for someone outside one’s own true preference in order to prevent an undesirable outcome • Using the 2000 election as an example: • Vote for Nader to prevent Gore from winning • This is known as strategic voting

  33. Example • Florida in 2000 • 2,912,790 for Bush • 2,912,253 for Gore • 97,488 for Nader

  34. Voting in open Primaries • Democratic voters may vote in republican primaries and vote for the less qualified candidate so that the Democrat has a better chance of winning a general election

  35. Rent-Seeking Behavior • Activities designed to transfer surplus from one group to another • Context of tariffs and government intervention • Transferring wealth • Lottery

  36. Elections • Campaigning to win an election • Rent = Elected Position • Money, prestige, power

  37. Incentives • Corruption? • Signaling Effect • Voters favor candidates supported by special interests

  38. Costs • Winner: comes out of rent • Loser: comes from supporters

  39. Tussock’s Game: Election Game:

  40. Social Implications • Benefitting the rich • Super PACs • Publicly funded elections

  41. Works Cited http://www.sciencedirect.com/science/article/pii/S0962629808000954 http://www.redistrictingthenation.com/glossary.aspx http://www.redistrictinggame.org/launchgame.php?level=basic&mission=2 http://www.ccrpc.org/planning/pdfs/StatisticalStandards.pdf http://www.nationaljournal.com/almanac/2010/area/il/04 http://www.yourdictionary.com/images/articles/lg/379.PresidentialElection.jpg http://upload.wikimedia.org/wikipedia/en/thumb/e/e8/Florida_2000.PNG/200px-Florida_2000.PNG http://www.jpattitude.com/Images/2000Election.jpg http://upload.wikimedia.org/wikipedia/commons/thumb/5/5b/Nicolas_de_Condorcet.PNG/220px-Nicolas_de_Condorcet.PNG http://www.sciencedirect.com/science/article/pii/0165176581901075

  42. Downs, Anthony. An Economic Theory of Democracy. New York: Harper & Row, 1957. Print. Cowen, Tyler. “Why Politics is Stuck in the Middle.” The New York Times. 27 Feb.2010. Web. 21 April 2010. Congleton, Roger. “The Median Voter Model.” The Encyclopedia of Public Choice. Kluwer Academic Press, 2002. http://www.yourdictionary.com/images/articles/lg/379.PresidentialElection.jpg http://upload.wikimedia.org/wikipedia/en/thumb/e/e8/Florida_2000.PNG/200px-Florida_2000.PNG http://www.jpattitude.com/Images/2000Election.jpg http://upload.wikimedia.org/wikipedia/commons/thumb/5/5b/Nicolas_de_Condorcet.PNG/220px-Nicolas_de_Condorcet.PNG http://www.sciencedirect.com/science/article/pii/0165176581901075

  43. http://www.yourdictionary.com/images/articles/lg/379.PresidentialElection.jpghttp://www.yourdictionary.com/images/articles/lg/379.PresidentialElection.jpg http://upload.wikimedia.org/wikipedia/en/thumb/e/e8/Florida_2000.PNG/200px-Florida_2000.PNG http://www.jpattitude.com/Images/2000Election.jpg http://upload.wikimedia.org/wikipedia/commons/thumb/5/5b/Nicolas_de_Condorcet.PNG/220px-Nicolas_de_Condorcet.PNG http://www.sciencedirect.com/science/article/pii/0165176581901075 http://www.jstor.org/stable/30025637?seq=1 http://www.jstor.org/stable/30025235?seq=1 Buchanan, James M., and Gordon Tullock. The Calculus of Consent ; Logical Foundations of Constitutional Democracy. Ann Arbor: University of Michigan, 1965. Print. David Colander, Microeconomics 8th Edition (New York: McGraw-Hill, 2010), 189-190 , 487, 532-537 Bullock, David S. "Cooperative Game Theory and the Measurement of Political Power." American Journal of Agricultural Economics 78.3 (1996): 745. Print.

  44. http://www.jstor.org/stable/30025637?seq=1 http://www.jstor.org/stable/30025235?seq=1 Buchanan, James M., and Gordon Tullock. The Calculus of Consent ; Logical Foundations of Constitutional Democracy. Ann Arbor: University of Michigan, 1965. Print. David Colander, Microeconomics 8th Edition (New York: McGraw-Hill, 2010), 189-190 , 487, 532-537 Bullock, David S. "Cooperative Game Theory and the Measurement of Political Power." American Journal of Agricultural Economics 78.3 (1996): 745. Print. Su, Francis E., et al. "Social Choice and the Condorcet Paradox." Math Fun Facts. http://www.math.hmc.edu/funfacts. http://www.sccs.swarthmore.edu/users/08/ajb/tmve/wiki100k/docs/Condorcet_method.html Felsenthal, Dan S., and Moshé Machover. "Voting Power Measurement: A Story of Misreinvention." Social Choice and Welfare 25.2-3 (2005): 485-506. Print.

  45. Su, Francis E., et al. "Social Choice and the Condorcet Paradox." Math Fun Facts. http://www.math.hmc.edu/funfacts. • http://www.sccs.swarthmore.edu/users/08/ajb/tmve/wiki100k/docs/Condorcet_method.html • http://re5qy4sb7x.search.serialssolutions.com/?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&ctx_tim=2012-04-22T12%3A18%3A06IST&url_ver=Z39.88-2004&url_ctx_fmt=infofi/fmt:kev:mtx:ctx&rfr_id=info:sid/primo.exlibrisgroup.com:primo3-Article-sciversesciencedirect_elsevier&rft_val_fmt=info:ofi/fmt:kev:mtx:&rft.genre=article&rft.atitle=Condorcet%27s%20paradox%20under%20the%20maximal%20culture%20condition&rft.jtitle=Economics%20Letters&rft.btitle=&rft.aulast=Gehrlein&rft.auinit=&rft.auinit1=&rft.auinitm=&rft.ausuffix=&rft.au=Gehrlein%2C%20William%20V&rft.aucorp=&rft.date=1997&rft.volume=55&rft.issue=1&rft.part=&rft.quarter=&rft.ssn=&rft.spage=85&rft.epage=89&rft.pages=85-89&rft.artnum=&rft.issn=0165-1765&rft.eissn=&rft.isbn=&rft.sici=&rft.coden=&rft_id=info:doi/10.1016/S0165-1765(97)00046-3&rft.object_id=&svc_val_fmt=info:ofi/fmt:kev:mtx:sch_svc&svc.fulltext=yes&rft_dat=%3Csciversesciencedirect_elsevier%3ES0165-1765(97)00046-3%3C/sciversesciencedirect_elsevier%3E&rft.eisbn=&rft_id=info:oai/%3E

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