Economics and Finance Faculty Publications and Presentations

Document Type

Article

Publication Date

6-2023

Abstract

Highlights

  • We study static and dynamic supermajoritarian economies with totally ordered policy spaces.

  • We count equilibria in the core and the largest consistent set under single-peaked preferences.

  • We assess the depth of policy diversity across similar supermajoritarian political economies.

  • We analyze how supermajority rules affect utilitarian welfare and political compromise.

  • We find that majority rule maximizes both utilitarian welfare and political compromise under uncertainty.

Abstract

The standard Bowen model of political competition with single-peaked preferences (Bowen, 1943) predicts party convergence to the median voter’s ideal policy, with the number of equilibrium policies not exceeding two. This result assumes majority rule and a unidimensional policy space. We extend this model to static and dynamic political economies where the voting rule is a supermajority rule, and the policy space is totally ordered. We show that the exact number of equilibria in these settings is an increasing correspondence of the supermajority’s size. Our findings have implications for the depth of policy diversity across structurally identical supermajoritarian political economies. We also examine the equilibrium effects of supermajority rules on utilitarian welfare and political compromise under uncertainty.

Comments

Original published version available at https://doi.org/10.1016/j.ejor.2022.10.018

Publication Title

European Journal of Operational Research

DOI

10.1016/j.ejor.2022.10.018

Included in

Finance Commons

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