The authors study investment decisions in a farmers' cooperative. Farmers sell their products through the cooperative. Before production takes place, the cooperative has to decide on an investment. The authors study whether voting on investment leads to efficient investment decisions. The answer...

In a general equilibrium macro model with wage bargaining, agents are divided into capitalists and workers. The markets for produced goods and money are competitive, but the wage rate is determined by negotiation between an employers' union and a trade union. Unions are supposed to be "long...

A democratic society is considered where the voters, but not the politicians, are uncertain about how the economy works. The parties therefore have a strategic motive to misinform the voters. Will the voters learn how the economy works and will the policy decisions be efficient? It turns out...