Often political races are not really competitive, and the path to reelection is smooth for many incumbents. In two-candidate races for office we suggest the introduction of a new re-election rule, which we call the “Score-replication Rule.” This rule requires that, to be reelected, any...

We outline a new voting procedure for representative democracies. This procedure should be used for important decisions only and consists of two voting rounds: a randomly-selected subset of the citizens is awarded a one-time voting right. The parliament also votes, and the two decisions are...

The election mechanism has difficulties in selecting the most able candidates and deselecting less able ones. In a simple model we explore how the power of elections as a selection device can be improved by requiring higher vote thresholds than 50% for incumbents.

We outline a new voting procedure for representative democracies. This procedure should be used for important decisions only and consists of two voting rounds: a randomly-selected subset of the citizens is awarded a one-time voting right. The parliament also votes, and the two decisions are...

A population of identical individuals must choose one of two alternatives under uncer- tainty about what the right alternative is. Individuals can gather information of increasing accuracy at an increasing convex utility cost. For such a setup, we analyze how vote del- egation to a committee and...

German Abstract: In diesem Beitrag wird eine neue Idee für den Umgang mit Volksinitiativen vorgestellt. Vor einer endgültigen Abstimmung über eine Initiative würde durch eine Abstimmung einer zufällig ausgewählten Stichprobe von Bürgern ein vorläufiges Ergebnis festgestellt. Die...

In this paper, we provide an economy-wide perspective on equity and debt across banks and industrial firms when both are faced with incentive problems and equity is scarce. Increasing bank equity may mitigate the bank-level moral hazard but exacerbates the firm-level moral hazard due to the...

We examine the validity of a macroeconomic version of the Modigliani-Miller theorem. For this purpose, we develop a general equilibrium model with two production sectors, risk-averse households and financial intermediation by banks. Banks are funded by deposits and (outside) equity and monitor...

We examine the validity of a macroeconomic version of the Modigliani–Miller theorem. By this, we mean that different capital structures can occur in equilibrium and that all of them are associated with the same allocation of commodities and the same welfare. We develop a general equilibrium...

This paper examines the question to what extent premia for macroeconomic risks inbanking are sufficient to avoid banking crises. We investigate a competitive bankingsystem embedded in an overlapping-generations model subject to repeatedmacroeconomic shocks. We show that even if banks fully...