Essays in political economy

Chapter 1. The American presidential nomination process consists of a series of elections (primaries) in which states vote at different times. The problem faced by a political party choosing the optimal temporal structure for its primaries is studied in an environment in which a sequential election may generate voter herding. By choosing the temporal structure, the party can induce voter herding which is ex ante beneficial in selecting the best candidate. When candidates have equal loyal support, simultaneous voting is optimal. When one candidate has more loyal support, a sequential election can be optimal since voter herding compensates for the loyal voter imbalance. This novel example of a beneficial information cascade contrasts results from the herding literature. Under sequential voting, states which are smaller, have fewer partisans, have more informed voters, and are more diverse optimally vote first. Chapter 2 (joint with Eleanor L. Harvill). A lack of political knowledge may be why voters policy positions often conflict with those of their favored candidate. The National Annenberg Election Survey (NAES) for the 2004 U.S. presidential election solicits citizens opinions and knowledge of candidates positions regarding specific policies, allowing us to directly estimate and analyze voters\u27 and candidates ideological positions (using Poole and Rosenthal\u27s (1985, 2000) spatial model), voters knowledge of candidates positions (using item response theory) and voting behavior. More knowledgeable individuals are far less likely to vote for the candidate farther from them. Significantly more vote mistakenly for Bush than for Kerry, so that Bush receives more votes although a significant majority of voters are ideologically closer to Kerry. Chapter 3. Two heterogeneous buyers must choose to bid on either a high or low value good which are sold in simultaneous first-price auctions. The resulting allocation is efficient only when sellers can commit to reservation prices, as the unique buyer equilibrium with fixed reservation prices exhibits coordination frictions. The high good is sold but the low value good is either not sold or sold at reservation. When sellers commit to reservation prices, a unique market equilibrium with perfect buyer coordination is achieved. The allocation and payoffs are both equivalent to the price-posting case