Correlation Neglect, Voting Behavior, and Information Aggregation

Gilat Levy and Ronny Razin

American Economic Review, 2015, vol. 105, issue 4, 1634-45

Abstract: In this paper we analyze elections when voters underestimate the correlation between their information sources ("correlation neglect"). We find that this cognitive bias can improve political outcomes. We show that the extreme beliefs which result from correlation neglect induce some voters to base their vote on information rather than on political preferences. We characterize conditions on the distribution of preferences under which this induces higher vote shares for the optimal policies and better information aggregation. (JEL D72, D83)

JEL-codes: D72 D83 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/aer.20140134
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Citations: View citations in EconPapers (93)

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