A Political Model of Trust

Konstantin Sonin, Ran Eilat and Marina Agranov

No 14672, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We analyze a model of political competition, in which the uninformed median voter chooses whether to follow or ignore the advice of the elite that forms endogenously to aggregate information. In equilibrium, information transmission is possible only if voters trust the elite's endorsement of potentially biased candidates. When inequality is high, the elite's 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 elite size and thus the extent of information aggregation depends on the amount of trust they can 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)
Date: 2020-04
New Economics Papers: this item is included in nep-cdm, nep-mic, 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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