A Political Model of Trust

Marina Agranov (magranov@hss.caltech.edu), Ran Eilat (eilatr@bgu.ac.il) and Konstantin Sonin
Additional contact information
Marina Agranov: Caltech - Division of Humanities and Social Sciences
Ran Eilat: Ben-Gurion University - Department of Economics

No 2020-50, Working Papers from Becker Friedman Institute for Research In Economics

Abstract: We analyze a simple model of political competition, in which the uninformed median voter chooses whether to follow or ignore the advice of the informed elites. In equilibrium, information transmission is possible only if voters trust the elites’ endorsement of potentially biased candidates. When inequality is high, the elites’ informational advantage is minimized by the voters’ distrust. When inequality reaches a certain threshold, the trust, and thus the information transmission, breaks down completely. Finally, the size of the elite forming in equilibrium depends on the amount of trust they are able to maintain.

Keywords: trust; inequality; political economy; cheap talk; information club (search for similar items in EconPapers)
JEL-codes: D72 D83 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2020
New Economics Papers: this item is included in nep-cdm, nep-mic, nep-ore, nep-pol and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: A Political Model of Trust (2020)
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