Mackerels in the Moonlight: A Duopoly Model of Political Agency

Haldun Evrenk ()

No 2008-4, Working Papers from Suffolk University, Department of Economics

Abstract: I study political competition between two candidates who could differ in their ability, popularity, and ethics. In elections, each candidate proposes a flat (income) tax rate and a public good level. A high(er)-ability candidate can produce the public good using less funds. Collected taxes that are not used in public goods production are stolen by the elected politician. The voting decision is probabilistic; it depends on a candidate's fiscal policy and his popularity. I prove that the pure strategy Nash Equilibrium exists and that there are at most two separate equilibria. I also provide a fully solved example.

Keywords: Political Agency; Political Corruption; Nash Equilibrium (search for similar items in EconPapers)
JEL-codes: D72 H30 H83 K42 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cdm, nep-law, nep-pbe and nep-pol
Date: 2008-04-25
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