Habit formation, strategic extremism and debt policy

Egil Matsen and Øystein Thøgersen ()
Additional contact information
Øystein Thøgersen: Department of Economics, Norwegian School of Economics and Business Administration, and CESifo,

Working Paper Series from Department of Economics, Norwegian University of Science and Technology

Abstract: We suggest a probabilistic voting model where voters’ preferences for alternative public goods display habit formation. Current policies determine habit levels and in turn the future preferences of the voters. This allows the incumbent to act strategically in order to influence the probability of re-election. Comparing to a benchmark case of a certain re-election, we demonstrate that the incumbent’s optimal policy features both a more polarized allocation between the alternative public goods and a debt bias.

Keywords: Budget deficits; voting; extremism; habit formation (search for similar items in EconPapers)
JEL-codes: D72 D78 H62 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2007-12-11
New Economics Papers: this item is included in nep-cdm and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.svt.ntnu.no/iso/WP/2007/7habit_debt_strategic%20111207.pdf (application/pdf)

Related works:
Journal Article: Habit formation, strategic extremism, and debt policy (2010)
Working Paper: Habit formation, strategic extremism, and debt policy (2010)
Working Paper: Habit Formation, Strategic Extremism and Debt Policy (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nst:samfok:9007

Access Statistics for this paper

More papers in Working Paper Series from Department of Economics, Norwegian University of Science and Technology Contact information at EDIRC.
Bibliographic data for series maintained by Anne Larsen ().