Protectionism enjoys surprising popular support, in spite of deadweight losses. At the same time, trade barriers appear to decline with public information about protection. This paper develops an electoral model with heterogeneously informed voters which explains both facts and predicts the...

We show that in democracies insufficient recognition of general equilibrium effects can lead to a crisis. We consider a two-sector economy in which a majoritarian political process determines governmental regulation in one sector: a minimum nominal wage. If voters recognize general equilibrium...

We present a dynamic model of sequential information acquisition by a heterogeneous committee. At each date agents decide whether to vote to adopt one of two alternatives or continue to collect more information. The process stops when a qualified majority vote for an alternative. Three main...

This paper studies the corporate governance and asset pricing implications of investors owning blocks in multiple firms. Common wisdom is that multi-firm ownership weakens governance because the blockholder is spread too thinly. We show that this need not be the case. In a single-firm benchmark,...

Does information about rampant political corruption increase electoral participation and the support for challenger parties? Democratic theory assumes that offering more information to voters will enhance electoral accountability. However, if there is consistent evidence suggesting that voters...

We present a tractable stochastic endogenous growth model that explains how social capital influences economic development. In our model, social capital increases citizens' awareness of government activity. Hence, it alleviates the electoral incentives to under-invest in education, whose returns...

I develop a model of ideologies as collectively sustained (yet individually rational) distortions in beliefs concerning the proper scope of governments versus markets. In processing and interpreting signals of the efficacy of public and market provision of education, health insurance, pensions,...

I develop a model of rent seeking with informational foundations and an arbitrary number of rent seekers, and I compare the results with Tullock's (1980) classic model where the influence activities are "black-boxed." Given the microfoundations, the welfare consequences of rent seeking can be...

I develop a model of group decision-making, in which a committee generates proposals and holds open discussions, but the ultimate decision is either taken by a leader (decision by authority) or by majority vote. Optimal communication processes are studied that combine both cheap talk statements...