Income Misperception and Populism

Inefficient lobbying, populism and oligarchy

This paper analyses the efficiency consequences of lobbying in a production economy with imperfect commitment. We first show that the Pareto efficiency result found for truthful equilibria of common agency games in static exchange economies no longer holds under these more general conditions. We construct a model of pressure groups where the set of efficient truthful common-agency equilibria ha...

Populism and Feminism: Odd Bedfellows

In this era of populist insurgency breaking the mold of democratic politics, two movements clashed.They represented opposite sides of the political spectrum, one emancipatory, the other exclusionary. One may be identified as feminism, the other as populism. This essay analyzes both concepts and explores their connection.

Imperfect Information, Democracy, and Populism∗

The modern world is complex and difficult to understand for voters, who may hold beliefs that are at variance with reality. Politicians face incentives to pander to voters’ beliefs to get reelected. We analyze the welfare effects of this pandering and show that it comes along with both costs and benefits. Moreover, we explore optimal constitutional design in the presence of imperfect informatio...

Rise of populism

Misperception, Communication and Diversity

It is commonly agreed upon that misperception is detrimental. However, misperception might have a beneficial effect from a collective viewpoint when individuals mispercept incoming information that promotes a specific kind of behavior, which leads to an increase in diversity. First, this paper proposes our hypothesis regarding adaptive property of misperception based on the argument of the rela...