This study shows that shifts in political climate influence stock prices. As the party in power changes, there are systematic changes in the industry-level composition of investor portfolios, which weaken arbitrage forces and generate predictable patterns in industry returns. A trading strategy that attempts to exploit demand-based return predictability generates an annualized risk-adjusted performance of 6% during the 1939 to 2011 period. This evidence of predictability spans 17%27% of the market and is stronger during periods of political transition. Our demand-based predictability pattern is distinct from cash flow-based predictability identified in the recent literature.Received November 15, 2013; accepted April 5, 2016 by Editor Andrew Karolyi.
{"title":"Political Sentiment and Predictable Returns","authors":"Jawad M. Addoum, Alok Kumar","doi":"10.2139/ssrn.2169360","DOIUrl":"https://doi.org/10.2139/ssrn.2169360","url":null,"abstract":"This study shows that shifts in political climate influence stock prices. As the party in power changes, there are systematic changes in the industry-level composition of investor portfolios, which weaken arbitrage forces and generate predictable patterns in industry returns. A trading strategy that attempts to exploit demand-based return predictability generates an annualized risk-adjusted performance of 6% during the 1939 to 2011 period. This evidence of predictability spans 17%27% of the market and is stronger during periods of political transition. Our demand-based predictability pattern is distinct from cash flow-based predictability identified in the recent literature.Received November 15, 2013; accepted April 5, 2016 by Editor Andrew Karolyi.","PeriodicalId":117783,"journal":{"name":"ERN: Models of Political Processes: Rent-Seeking","volume":"12 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128752314","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We assess a country’s influence on decision-making in the EU Council of Ministers not merely on the basis of the number of its votes, but based on a more refined measure that takes into account the voting behavior of other countries. A country that is likely to receive support from other countries will be more influential than a country with more votes, but which tends to be isolated in its policy preferences. We set out a novel quantitative methodology, which integrates the voting weight and the degree of support enjoyed by each country in one single measure, and we apply the methodology to a data set that is richer than existing data sets. We further use this measure (i) to assess whether the changes in voting weights from the Nice to the Lisbon Treaty have an influence on the odds whether countries get what they want when decisions are taken in the Council; and (ii) to study how these odds are affected by actor alignment in the Council.
{"title":"Alliance-Building to Influence the EU: Measuring the Geography of Mutual Support","authors":"Marco Fantini, Klaas Staal","doi":"10.2139/ssrn.2828116","DOIUrl":"https://doi.org/10.2139/ssrn.2828116","url":null,"abstract":"We assess a country’s influence on decision-making in the EU Council of Ministers not merely on the basis of the number of its votes, but based on a more refined measure that takes into account the voting behavior of other countries. A country that is likely to receive support from other countries will be more influential than a country with more votes, but which tends to be isolated in its policy preferences. We set out a novel quantitative methodology, which integrates the voting weight and the degree of support enjoyed by each country in one single measure, and we apply the methodology to a data set that is richer than existing data sets. We further use this measure (i) to assess whether the changes in voting weights from the Nice to the Lisbon Treaty have an influence on the odds whether countries get what they want when decisions are taken in the Council; and (ii) to study how these odds are affected by actor alignment in the Council.","PeriodicalId":117783,"journal":{"name":"ERN: Models of Political Processes: Rent-Seeking","volume":"140 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-02-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124424386","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper studies the relationship between incumbents’ performance and political polarization, both with theory and data. The theory is based on a spatial model of political competition in which the voters use the incumbent’s performance in office to update their beliefs about his competence. A better performance leads to the incumbent’s electoral advantage and so allows him to announce a more extreme platform closer to his bliss point. Therefore, conditioned on reelection, a better incumbent’s performance leads to higher political polarization. We use the data on the incumbents’ performance in natural disaster relief and the ideological positions they take in the U.S. House of representatives in 1953-2010. The empirical evidence shows that a better performance in post-disaster recovery is associated with more extreme ideological positions of the corresponding incumbents. These and other empirical results are in line with the model predictions.
{"title":"Incumbents' Performance and Political Polarization","authors":"M. Dodlova, Galina Zudenkova","doi":"10.2139/ssrn.2721634","DOIUrl":"https://doi.org/10.2139/ssrn.2721634","url":null,"abstract":"This paper studies the relationship between incumbents’ performance and political polarization, both with theory and data. The theory is based on a spatial model of political competition in which the voters use the incumbent’s performance in office to update their beliefs about his competence. A better performance leads to the incumbent’s electoral advantage and so allows him to announce a more extreme platform closer to his bliss point. Therefore, conditioned on reelection, a better incumbent’s performance leads to higher political polarization. We use the data on the incumbents’ performance in natural disaster relief and the ideological positions they take in the U.S. House of representatives in 1953-2010. The empirical evidence shows that a better performance in post-disaster recovery is associated with more extreme ideological positions of the corresponding incumbents. These and other empirical results are in line with the model predictions.","PeriodicalId":117783,"journal":{"name":"ERN: Models of Political Processes: Rent-Seeking","volume":"16 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-01-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126736068","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This Article considers the process by which electoral reform ought to take place, focusing in particular on the democratic and constitutional constraints that bear on electoral reform. It outlines a number of possible process options — including a citizens’ assembly, a commission, a referendum, and a parliamentary committee — and it argues that although no single mechanism is mandated, the process must visibly follow the norms of political neutrality, consultation, and deliberation in order for the proposed reform to be democratically legitimate.This Article also addresses the question of whether a constitutional amendment involving provincial consent is required for electoral reform. The Supreme Court has recognized in many of its cases that the electoral system is political in nature but nonetheless subject to certain constitutional limits. The Court has also stated in its prior cases that the choice of the electoral model falls within the domain of Parliament. The remaining question, however, is whether the Senate Reference has changed the legal landscape such that Parliament would now be required to obtain provincial consent in order to usher in electoral change. This Article argues that given the salient differences between Senate reform and electoral reform, the Court could distinguish the Senate Reference and find that its earlier precedents on the electoral system remain valid. The Article concludes that electoral reform can likely proceed without a constitutional amendment involving provincial consent, provided that the reform is consistent with certain constitutional requirements.
{"title":"The Process of Electoral Reform in Canada: Democratic and Constitutional Constraints","authors":"Yasmin Dawood","doi":"10.2139/ssrn.2831198","DOIUrl":"https://doi.org/10.2139/ssrn.2831198","url":null,"abstract":"This Article considers the process by which electoral reform ought to take place, focusing in particular on the democratic and constitutional constraints that bear on electoral reform. It outlines a number of possible process options — including a citizens’ assembly, a commission, a referendum, and a parliamentary committee — and it argues that although no single mechanism is mandated, the process must visibly follow the norms of political neutrality, consultation, and deliberation in order for the proposed reform to be democratically legitimate.This Article also addresses the question of whether a constitutional amendment involving provincial consent is required for electoral reform. The Supreme Court has recognized in many of its cases that the electoral system is political in nature but nonetheless subject to certain constitutional limits. The Court has also stated in its prior cases that the choice of the electoral model falls within the domain of Parliament. The remaining question, however, is whether the Senate Reference has changed the legal landscape such that Parliament would now be required to obtain provincial consent in order to usher in electoral change. This Article argues that given the salient differences between Senate reform and electoral reform, the Court could distinguish the Senate Reference and find that its earlier precedents on the electoral system remain valid. The Article concludes that electoral reform can likely proceed without a constitutional amendment involving provincial consent, provided that the reform is consistent with certain constitutional requirements.","PeriodicalId":117783,"journal":{"name":"ERN: Models of Political Processes: Rent-Seeking","volume":"52 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124221161","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We investigate a variant of the Hotelling-Downs model where politicians choose their policies under ostracism with each voter voting for the politician whose policy is least preferable for him and the politician obtaining the most votes being expelled. We present a necessary and sufficient condition for a strategy tuple to be a Nash equilibrium and show that in any Nash equilibrium, politicians' policies are same. We identify the equilibrium policy set such that a politicians' policy tuple is a Nash equilibrium if and only if all policies in the tuple are the same policy in the equilibrium policy set. We also show that under mild assumptions, the equilibrium policy set is a superset of the set of medians in all directions, bounded, closed, convex, increasing in the number of politicians, convergent to the convex hull of the support of voters' ideal policy distribution as the number of politicians tends to infinity, and nonempty for a sufficiently large population of politicians.
{"title":"A Spatial Theory of Ostracism","authors":"Tomohiko Kawamori, K. Yamaguchi","doi":"10.2139/ssrn.2701360","DOIUrl":"https://doi.org/10.2139/ssrn.2701360","url":null,"abstract":"We investigate a variant of the Hotelling-Downs model where politicians choose their policies under ostracism with each voter voting for the politician whose policy is least preferable for him and the politician obtaining the most votes being expelled. We present a necessary and sufficient condition for a strategy tuple to be a Nash equilibrium and show that in any Nash equilibrium, politicians' policies are same. We identify the equilibrium policy set such that a politicians' policy tuple is a Nash equilibrium if and only if all policies in the tuple are the same policy in the equilibrium policy set. We also show that under mild assumptions, the equilibrium policy set is a superset of the set of medians in all directions, bounded, closed, convex, increasing in the number of politicians, convergent to the convex hull of the support of voters' ideal policy distribution as the number of politicians tends to infinity, and nonempty for a sufficiently large population of politicians.","PeriodicalId":117783,"journal":{"name":"ERN: Models of Political Processes: Rent-Seeking","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-12-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131135298","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We identify the causal effect of trade-integration with China and Eastern Europe on voting in Germany from 1987 to 2009. Looking at the entire political spectrum, we find that only extreme-right parties respond significantly to trade integration. Their vote share increases with import competition and decreases with export access opportunities. We unpack mechanisms using reduced form evidence and a causal mediation analysis. Two-thirds of the total effect of trade integration on voting appears to be driven by observable labor market adjustments, primarily changes in manufacturing employment. These results are mirrored in an individual-level analysis in the German Socioeconomic Panel.
{"title":"Globalization and its (Dis-)Content: Trade Shocks and Voting Behavior","authors":"C. Dippel, Robert S. Gold, Stephan Heblich","doi":"10.3386/W21812","DOIUrl":"https://doi.org/10.3386/W21812","url":null,"abstract":"We identify the causal effect of trade-integration with China and Eastern Europe on voting in Germany from 1987 to 2009. Looking at the entire political spectrum, we find that only extreme-right parties respond significantly to trade integration. Their vote share increases with import competition and decreases with export access opportunities. We unpack mechanisms using reduced form evidence and a causal mediation analysis. Two-thirds of the total effect of trade integration on voting appears to be driven by observable labor market adjustments, primarily changes in manufacturing employment. These results are mirrored in an individual-level analysis in the German Socioeconomic Panel.","PeriodicalId":117783,"journal":{"name":"ERN: Models of Political Processes: Rent-Seeking","volume":"238 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122696453","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In this paper we experimentally investigate the consequences of electoral fraud on voter turnout. The experiment is based on a strategic binary voting model where voters decide whether to cast a costly vote in favour of their preferred candidate or to abstain. Minority candidate can illicitly influence the electoral process by applying ballot box stuffing. In the experiment we implement two different framings: we compare voter turnout in a neutral environment and with framed instructions to explicitly replicate elections. This approach enables to both test the model's predictions and to estimate framing effects of voting and fraud. Comparison of experimental results with theoretical predictions reveals over-voting, which is exac- erbated when fraud is applied. Moreover, turnout increases with moderate level of fraud. However, with more extensive electoral fraud, theoretical predictions are not matched. Voters fail to recognize that the existence of a relatively larger number of "agents" voting with certainty considerably decreases the benefits of voting. Importantly, framing matters, as revealed by the higher turnout of those in the majority group, against which the fraud is applied. Finally, individual level regression analysis provides evidences of strategic voting.
{"title":"Electoral Fraud and Voter Turnout: An Experimental Study","authors":"V. Baghdasaryan, G. Iannantuoni, V. Maggian","doi":"10.2139/ssrn.2956385","DOIUrl":"https://doi.org/10.2139/ssrn.2956385","url":null,"abstract":"In this paper we experimentally investigate the consequences of electoral fraud on voter turnout. The experiment is based on a strategic binary voting model where voters decide whether to cast a costly vote in favour of their preferred candidate or to abstain. Minority candidate can illicitly influence the electoral process by applying ballot box stuffing. In the experiment we implement two different framings: we compare voter turnout in a neutral environment and with framed instructions to explicitly replicate elections. This approach enables to both test the model's predictions and to estimate framing effects of voting and fraud. Comparison of experimental results with theoretical predictions reveals over-voting, which is exac- erbated when fraud is applied. Moreover, turnout increases with moderate level of fraud. However, with more extensive electoral fraud, theoretical predictions are not matched. Voters fail to recognize that the existence of a relatively larger number of \"agents\" voting with certainty considerably decreases the benefits of voting. Importantly, framing matters, as revealed by the higher turnout of those in the majority group, against which the fraud is applied. Finally, individual level regression analysis provides evidences of strategic voting.","PeriodicalId":117783,"journal":{"name":"ERN: Models of Political Processes: Rent-Seeking","volume":"36 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-11-25","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121567329","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The paper investigates whether there is any significant difference in lobbying behaviour on the IASB’s projects depending on the type of a project. In particular, we scrutinise the differences in number of comments letters received for: (a) major vs. minor projects; (b) projects successfully completed after the exposure draft phase vs. projects revised/stopped after the exposure draft phase. To test our two hypotheses about the pattern of lobbyist behaviour, we use reasoning based on a rational lobbying model developed by Sutton (1984). Our paper limits the scope to the IASB’s projects on its agenda over period 2006–2014; we thus complement previous studies of Kenny & Larson (1995) and Jorissen et al. (2012), who analysed the lobbying on IASB’s standards over periods 1989–1992, and 2002–2006 respectively. Our results show that the IASB inclines to succumb to the pressure of lobbying parties if the lobbying is quite massive (measured by number of comment letters submitted) in relation to other projects. We supplement the literature on lobbying on accounting standards with additional evidence on general ability of the lobbyist to influence the decision of standard- -setters by pushing them to revise a project substantially, or even to stop the project in question completely.
{"title":"Lobbying on the IASB Standards: An Analysis of the Lobbyists' Behaviour Over Period 2006-2014","authors":"D. Procházka","doi":"10.12775/CJFA.2015.020","DOIUrl":"https://doi.org/10.12775/CJFA.2015.020","url":null,"abstract":"The paper investigates whether there is any significant difference in lobbying behaviour on the IASB’s projects depending on the type of a project. In particular, we scrutinise the differences in number of comments letters received for: (a) major vs. minor projects; (b) projects successfully completed after the exposure draft phase vs. projects revised/stopped after the exposure draft phase. To test our two hypotheses about the pattern of lobbyist behaviour, we use reasoning based on a rational lobbying model developed by Sutton (1984). Our paper limits the scope to the IASB’s projects on its agenda over period 2006–2014; we thus complement previous studies of Kenny & Larson (1995) and Jorissen et al. (2012), who analysed the lobbying on IASB’s standards over periods 1989–1992, and 2002–2006 respectively. Our results show that the IASB inclines to succumb to the pressure of lobbying parties if the lobbying is quite massive (measured by number of comment letters submitted) in relation to other projects. We supplement the literature on lobbying on accounting standards with additional evidence on general ability of the lobbyist to influence the decision of standard- -setters by pushing them to revise a project substantially, or even to stop the project in question completely.","PeriodicalId":117783,"journal":{"name":"ERN: Models of Political Processes: Rent-Seeking","volume":"42 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-10-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122105239","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This chapter provides an overview of computational modeling of conformity, group deliberation, and social diffusion processes, with an emphasis on social psychological perspectives rather than the kinds of structural and institutional issues modeled in political science and sociology. The chapter attempts to illustrate the benefits of building maps of "parameter space" as a way to generalize across single studies and to develop out-of-sample new predictions.
{"title":"Computational Models of Social Influence and Collective Behavior","authors":"R. MacCoun","doi":"10.2139/ssrn.2673093","DOIUrl":"https://doi.org/10.2139/ssrn.2673093","url":null,"abstract":"This chapter provides an overview of computational modeling of conformity, group deliberation, and social diffusion processes, with an emphasis on social psychological perspectives rather than the kinds of structural and institutional issues modeled in political science and sociology. The chapter attempts to illustrate the benefits of building maps of \"parameter space\" as a way to generalize across single studies and to develop out-of-sample new predictions.","PeriodicalId":117783,"journal":{"name":"ERN: Models of Political Processes: Rent-Seeking","volume":"66 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-10-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126066485","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using actual voting records of simultaneous elections held for Indian federal and regional assemblies -- where same political parties contest against each other in both type of elections -- we identify swing voters. We find that the representatives supported by swing voters outperform significantly with respect to both constituency level outcomes as well as measures based on individual effort. Having controlled for the impact of observable factors, we follow Imbens (2003); Harada (2012) and conduct generalized sensitivity analysis in order to rule out the influence of unobservable factors. We show that the swing voters strengthen the positive association between democracy and growth.
{"title":"Democracy and Economic Growth: Do Swing Voters Make a Difference?","authors":"A. Bhardwaj, Prasanna Tantri, Nagaraju Thota","doi":"10.2139/ssrn.2700552","DOIUrl":"https://doi.org/10.2139/ssrn.2700552","url":null,"abstract":"Using actual voting records of simultaneous elections held for Indian federal and regional assemblies -- where same political parties contest against each other in both type of elections -- we identify swing voters. We find that the representatives supported by swing voters outperform significantly with respect to both constituency level outcomes as well as measures based on individual effort. Having controlled for the impact of observable factors, we follow Imbens (2003); Harada (2012) and conduct generalized sensitivity analysis in order to rule out the influence of unobservable factors. We show that the swing voters strengthen the positive association between democracy and growth.","PeriodicalId":117783,"journal":{"name":"ERN: Models of Political Processes: Rent-Seeking","volume":"746 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-08-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115124926","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
京公网安备 11010802042870号
京ICP备2023020795号-1
扫码关注我们
求助内容：
应助结果提醒方式：