Voter conformism and inefficient policies

Area of Science:

• Political Science
• Behavioral Economics
• Public Policy

Background:

• Politicians' policy decisions can reveal private information about their suitability for future circumstances.
• Voters' perceptions and conformity can influence a politician's strategic behavior.

Purpose of the Study:

• To analyze how politicians may adopt suboptimal policies to conceal private information.
• To investigate the impact of voter conformism on politicians' information-hiding incentives.
• To examine the interplay between conformism, incumbency advantage, and electoral outcomes.

Main Methods:

• Theoretical modeling of political decision-making under asymmetric information.
• Analysis of strategic interactions between a reelection-seeking incumbent and voters.
• Examination of equilibrium outcomes under varying levels of conformism and incumbency advantage.

Main Results:

• A 'conformism advantage' for incumbents emerges when combined with an incumbency advantage.
• Conformism can incentivize efficient policy choices and information revelation (separating equilibrium).
• Conformism may eliminate inefficient persistent policies (pooling equilibrium) but can also lead to suboptimal reelections.

Conclusions:

• Voter conformism significantly alters incumbent incentives, potentially improving policy but complicating reelection efficiency.
• The net effect of conformism on social welfare is mixed, depending on the balance between policy improvement and reelection outcomes.
• Altruistic incumbents may partially internalize the social costs of inefficient reelections, leading to non-monotonic effects of conformism.