week 1 - seminar 1
average voter theorem:
you try to appeal to the average voter, to play it safe and to appeal to as many people as possible
Incumbent advantage theorem:
when someone is already in the office or in a political party, they have an advantage. They don't have to
campaign anymore because they are already known. It is an advantage that they are already in the
political system and have a prominent position.
When running for
when voting we express our ordinal preferences office you need:
- connections
✓ There is no mechanism that guarantees that vote - (human) capital
VI V2V3 outcomes are rational. Individual rationality during voting
PA
- platform
does not translate to aggregate rationality in the voting - campaign
C B results. This is only the case in a dictatorship. It is a limit
of democracy.
B A C
C B A Article: Political Coase Theorem by Francesco Parisi
coalitions
EF CE
• C
No party can rule alone, there has to be a
so
I coalition. All 3 parties are looking for a
coalition. Their bliss point is their ideal
situation. The circles are their indifference
curves, people negotiate and bargain
andthey can change their opinion a little bit.
•
The bigger the circles get the bigger the
BE
• B changes are. At some points, the
indifference curves will hit each other. These
will be points of resemblance between the
parties.
CH
. -
BH healthcare .
3 party political system: bargaining and coalitions
Through political coase bargaining, you can get political
stability. This drawing shows the effects of bargaining.
Democracy is efficient for the purposes of law and
economics.
Any point on the triangle means there is a government
indifference curve of preferences
and there is stability.
, week 2 - seminar 2
the article on the Informed minority hypothesis is very important this week. Its main ideas reflect the
themes and focus of this week.
When you sign a contract, so once you agree to the terms of it, you expect both parties to come through
and stick to the terms. When agreeing, there is an automatic assumption that parties have understood the
terms and have agreed to them.
If this informed minority hypothesis is very bad, how come we stil have some consumer protection of our
rights. Why are companies are not adding crazy provisions in the contracts? (you can only buy the laptop if
you pick it up naked, etc)
Informed-minority hypothesis:
in competitive markets, a minority of term-conscious buyers is sufficient to discipline sellers from using
unfavourable boilerplate terms.
Standard-form contracts are the most common type of economic contracts. It contains remedies for
product failure, dispute resolutions and warranties.
average voter theorem:
you try to appeal to the average voter, to play it safe and to appeal to as many people as possible
Incumbent advantage theorem:
when someone is already in the office or in a political party, they have an advantage. They don't have to
campaign anymore because they are already known. It is an advantage that they are already in the
political system and have a prominent position.
When running for
when voting we express our ordinal preferences office you need:
- connections
✓ There is no mechanism that guarantees that vote - (human) capital
VI V2V3 outcomes are rational. Individual rationality during voting
PA
- platform
does not translate to aggregate rationality in the voting - campaign
C B results. This is only the case in a dictatorship. It is a limit
of democracy.
B A C
C B A Article: Political Coase Theorem by Francesco Parisi
coalitions
EF CE
• C
No party can rule alone, there has to be a
so
I coalition. All 3 parties are looking for a
coalition. Their bliss point is their ideal
situation. The circles are their indifference
curves, people negotiate and bargain
andthey can change their opinion a little bit.
•
The bigger the circles get the bigger the
BE
• B changes are. At some points, the
indifference curves will hit each other. These
will be points of resemblance between the
parties.
CH
. -
BH healthcare .
3 party political system: bargaining and coalitions
Through political coase bargaining, you can get political
stability. This drawing shows the effects of bargaining.
Democracy is efficient for the purposes of law and
economics.
Any point on the triangle means there is a government
indifference curve of preferences
and there is stability.
, week 2 - seminar 2
the article on the Informed minority hypothesis is very important this week. Its main ideas reflect the
themes and focus of this week.
When you sign a contract, so once you agree to the terms of it, you expect both parties to come through
and stick to the terms. When agreeing, there is an automatic assumption that parties have understood the
terms and have agreed to them.
If this informed minority hypothesis is very bad, how come we stil have some consumer protection of our
rights. Why are companies are not adding crazy provisions in the contracts? (you can only buy the laptop if
you pick it up naked, etc)
Informed-minority hypothesis:
in competitive markets, a minority of term-conscious buyers is sufficient to discipline sellers from using
unfavourable boilerplate terms.
Standard-form contracts are the most common type of economic contracts. It contains remedies for
product failure, dispute resolutions and warranties.
