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Guido Tabellini, Bocconi U. Print
Tuesday, 13 December 2016, 14:00 - 15:15

Guido Tabellini, Bocconi University

Electoral Competition with Rationally Inattentive Voters

Abstract : This paper studies how voters' selective ignorance interacts with policy design by political candidates. Small groups and voters with extreme preferences are more influential than under full information, divisive issues attract most attention and public goods are underfunded. Rational inattention can also explain the role of parties as labels, why competing candidates do not always converge on the same policies, why ecient reforms are more likely in recessions and how the poor are politically empowered by welfare programs. This is important because if policy distortions are driven by inattention, then some of them can be mitigated at relatively small costs.

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