Published research
Electoral
Competition under the Threat of Political Unrest
Joint
with Leonard Wantchekon
Quarterly
Journal of Economics, 115(2): 499-531, 2000.
This
paper studies political competition when there is a risk that one of the
parties could instigate political unrest, for example by encouraging
rioting, after losing an election. We show that the threat of unrest has a significant
impact on voting behaviour and on policy setting. The weaker party’s
information about the compromise needed to prevent the stronger party from
opting for unrest is critical: the strong party is less likely to win the
election when the weak party is better informed, because the weak party can
then more reliably prevent political unrest by implementing a compromising,
“centrist” policy. Another notable result is the model’s
ability to explain platform divergence: uncertainty over the credibility of
unrest leads to political posturing. The citations following its
publication show that the paper has been important to academics studying
how warring factions create democratic institutions as an indirect way to
share power.
·
published
version
· pre-publication
working paper
Specificity
Revisited: the Role of Cross-Investments
Journal of Law, Economics and
Organization,
22(1):234-57, 2006.
This
paper characterises when specificity is needed to increase efficiency in
bilateral contractual relationships. Unlike previous work, in which traders
select specific technologies as a way to commit themselves to trading
jointly, I demonstrate the value of specificity in settings with long-term
contracting. The main results are that: traders opt for specificity when
one trader makes a cross-investment and either (1) this cross-investment
has a direct externality on the other trader, (2) both parties invest or
(3) private information is present. Specificity (e.g. from non-salvageable
investments, specific assets and technologies, narrow business strategies,
and exclusivity restrictions) is equally effective regardless of which
trader's alternative trade payoff is reduced. Furthermore, the mechanism
works both with and without renegotiation. I apply the theory to offer a
novel perspective on vertical integration and a regulatory debate in
franchising. I also test the theory using data on non-compete covenants.
·
published
version
·
pre-publication
working paper
What Do the Papers
Sell? A Model of Advertising and Media Bias (Working paper version)
[Click here for latest version (April 2008)]
Joint with Fabrizio
Germano
Economic Journal, Forthcoming.
We
model the market for news as a two-sided market where newspapers sell news
to readers who value accuracy and sell space to advertisers who value
advert-receptive readers. In this setting, monopolistic newspapers
under-report or bias news that sufficiently reduces advertiser profits.
Paradoxically, increasing the size of advertising eventually leads
competing newspapers to reduce advertiser bias. Nonetheless, advertisers
can counter this effect if able to commit to news-sensitive cut-off
strategies, potentially inducing as much bias as in the monopoly case. We
use these results to explain contrasting historical and recent evidence on
commercial bias and influence in the media.
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