Using game-theoretic models, I study how political actors can push their agendas forward through the manipulation of voters' beliefs about key underlying parameters. You can read more about my research on my website: https://www.arduinotomasi.com/.
Merchants of Reputation: Privatization under Elites' Outside Lobbying
An elite is interested in purchasing a public asset, whose control is within the authority of a re-election and legacy concerned incumbent politician. The elite not only wants to buy the asset, but wants to buy it cheap. In the extensive margin, the incumbent decides whether to sell or not; in the intensive margin, he decides at what price to sell. The main contribution of the paper is to uncover how the intensive margin creates an incentive for the elite to invest in outside lobbying ex-ante so as to get the asset as cheap as possible. In my framework, outside lobbying is the elite's use of their media to attack or to threaten the incumbent: they can affect his electoral fortunes by manipulating voter's beliefs about his competence. I show that the elite's optimal lobbying strategies take two broad forms on the equilibrium path: if the incumbent is unwilling to privatize, then the elite employs threats; if he is willing to privatize, the elite employs attacks. The paper shows that even in the absence of traditionally studied channels of influence (like bribery), the elite can induce significant variability in the asset sale prices: equilibrium strategies can be non-monotonic, which induces non-monotonicity of prices. Both the outside lobbying strategies and the privatization prices emerge endogenously in equilibrium.
Government Transfers and the Political Control of Information Effects
Can an incumbent politician benefit electorally from programmatic transfers? What would be the ideal experiment to answer that question? While empirical studies cannot agree on the former (with recent papers finding even negative effects), they seem to agree on the latter: a large scale randomized transfers program. In this paper I develop a game-theoretic model to understand the mixed evidence, and to show why the consensus on the ideal experiment actually misses the point. I show that transfers (a "treatment") allows an incumbent politician to callibrate the informativeness of his overall governance as well as, given its income shock nature, to manage the proportion of politically more knowledgeable voters. That is, transfers allow an incumbent to increase his expected vote share, because they enable him to manipulate the probability distribution over the plausible information effects of his performance in office. We can then easily make sense of the mixed evidence: the marginal effects of transfers on political knowledge can make the treated and control subjects posterior beliefs about the incumbent's competence systematically different; that is, conditional on some governance outcome, we can recover positive, null and even negative information effects. Given the non-deterministic nature of governance, transfers are always a gamble and its effects can ex-ante go in any direction. The theoretical implication for empirical models is that while randomization of transfers can effectively neutralize strategic behaviour in who receives benefits, it does not account for the scope of transfers being an equilibrium object. This means that if an empiricist wants to measure the effect of transfers (the policy instrument), then the ideal experiment is not to randomize transfers (the cash); rather, it is randomizing the availability of the policy itself.