We examine a model of campaigns in which contributors support candidates who choose political platforms and engage in costly campaigning. Interest groups decide to whom and how much to contribute. We show that donors may financially support one candidate in order to moderate his opponent's...

We introduce a democratic procedure with voting-based proposals called ”Pendular Voting”. It works as follows: An agenda-setter chooses a proposal meant to replace a given status quo. In the first stage, a random sample of the population votes on the proposal. The result is made public,...

Politicians may pander to public opinion and may renounce undertaking beneficial long-term projects. To alleviate this problem, we introduce a triple mechanism involving political information markets, reelection threshold contracts, and democratic elections. An information market is used to...

When politicians are short-term oriented or future elections do not sufficiently reflect the success of past policies, democratic elections cannot motivate politicians to undertake long-term socially beneficial projects. When politicians can offer incentive contracts which become effective upon...

As the performance of long-term projects is not observable in the short run politicians may pander to public opinion. To solve this problem, we propose a triple mechanism involving political information markets, reelection threshold contracts, and democratic elections. An information market is...

A system's security must be understood with respect to the capabilities and behaviors of an adversary Eve. It is often assumed in security analysis that Eve acts as maliciously as possible. From an economic perspective, Eve tries to maximize her utility in a game with other participants. The...