A Model of Competing Narratives

Kfir Eliaz and Ran Spiegler ()

American Economic Review, 2020, vol. 110, issue 12, 3786-3816

Abstract: We formalize the argument that political disagreements can be traced to a "clash of narratives." Drawing on the "Bayesian Networks" literature, we represent a narrative by a causal model that maps actions into consequences, weaving a selection of other random variables into the story. Narratives generate beliefs by interpreting long-run correlations between these variables. An equilibrium is defined as a probability distribution over narrative-policy pairs that maximize a representative agent's anticipatory utility, capturing the idea that people are drawn to hopeful narratives. Our equilibrium analysis sheds light on the structure of prevailing narratives, the variables they involve, the policies they sustain, and their contribution to political polarization.

JEL-codes: D72 D83 D85 F52 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (42)

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Working Paper: A Model of Competing Narratives (2018)
Working Paper: A Model of Competing Narratives (2018)
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DOI: 10.1257/aer.20191099

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