PoolLines: Imperfect Public Choice

André de Palma (), Gordon Myers and Yorgos Y. Papageorgiou ()
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Yorgos Y. Papageorgiou: Université de Cergy-Pontoise, THEMA

No 2022-25, THEMA Working Papers from THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise

Abstract: We model imperfect governments with public choices which are sequential, myopic, and not free of error. We first use this framework to explore governmental incremental budgeting. We argue that a model of bounded rationality is required to capture the empirical reality of incremental budgeting. We then provide a model which integrates bounds errors and systematic errors. We argue that the empirical evidence is that bounds errors and systematic errors are inextricably intertwined–some level of bounded rationality is required for systematic errors to emerge. We use this to explore political information lobbying. A testable hypothesis is that lobbyists will focus efforts on policy makers of low ability. We show that choosing leaders with high ability, that is Madison’s wisdom to discern, is important, especially when policy decisions concern dangerous products (rifles) or dangerous environments (pandemics).

Keywords: Behavioural Economics; Public Choice. (search for similar items in EconPapers)
JEL-codes: D90 H11 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:ema:worpap:2022-25

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