In models of sequential decision making herd behaviour occurs if the signals smart(dumb) agents receive are (un)correlated and if agents have reputational concerns. We show thatintroducing costly effort to become informed about project payoffs (i) eliminates herdbehaviour and (ii) shifts...

This paper examines the incentives for a party leader in office and for a parties' rank-and-file to replace a sitting member of parliament. As to the leader's decision, we show that the leader prefers to replace a critical member of parliament who votes against the leader's policy. A competent...

This paper studies the internal organizational design of politicalinstitutions in presence of lobbying. We consider a legislature ascomposed of two bodies: the floor and an informational committee. Thefloor has the (formal) power to choose the policy to be implemented.The policy outcome is ex...

We develop a simple two period model to study the importance of motivational differences among politicians in describing the role of elections and explaining policy choices. In our model, politicians differ in their motives of running public office. Good politicians care about policies while bad...

A well-known rationale for representative democracy is that direct democracy leads to a free-rider problem as to the collection of information. A problem with this rationale is that it takes for granted that representatives collect information. In this paper we examine whether or not electoral...

Decisions-makers often rely on information supplied by interested parties. In practice, some parties have easier access to information than other parties. In this light, we examine whether more powerful parties have a disproportionate influence on decisions. We show that more powerful parties...

Politicians differ in their ability to implement some policy. In an election, candidates make commitments regarding the plans they will try to implement if elected. These serve as a signal of true ability. In equilibrium, candidates make overambitious promises. The candidate with the highest...