Foundations of Political Economy

Social Sciences 210a (Fall 2008-09)


Instructor: Matias Iaryczower
Classes: Thursdays 5 pm-8pm, Location Baxter 315
Office: Baxter 312; Phone (626) 395 - 4061
Email: miaryc@hss.caltech.edu
Web site: http://www.hss.caltech.edu/~miaryc/

Overview

The course is designed as a seminar for second year (+) graduate students. This means that student participation is very important. You will be required to present, discuss, and evaluate papers. All presentations must include three elements: (i) an overview of the paper (question, model, and results), (ii) a detailed proof of the fundamental results of the paper, and (iii) an evaluation of the paper.  All students are expected to read the papers that are being presented, and engage in informed discussions. All students are required to write the equivalent of a referee report about the papers covered at class. We will generally cover two papers in each class, drawn from five main topics: (1) Information Aggregation through Voting, (2) Multilateral Bargaining, (3) Vote Buying, (4) Elections, and (5) Experimentation. Your final grade will be a weighted average of your performance on Presentations (1/3), Discussion (1/3), and Reports (1/3).

Schedule

Information Aggregation
  1. Information Aggregation, Rationality, and the Condorcet Jury Theorem. David Austen-Smith and Jeffrey S. Banks. The American Political Science Review, Vol. 90, No. 1 (Mar., 1996), pp. 34-45.
  2. Voting Behavior and Information Aggregation in Elections With Private Information. Timothy Feddersen and Wolfgang Pesendorfer. Econometrica, Vol. 65, No. 5 (Sep., 1997), pp. 1029-1058.
  3. A Bayesian Model of Voting in Juries. John Duggan and Cesar Martinelli. Games and Economic Behavior, Vol. 37, No. 2 (Nov. 2001), pp 259-294.
  4. Sequential Voting Procedures in Symmetric Binary Elections. Eddie Dekel and Michele Piccione. The Journal of Political Economy, Vol. 108, No. 1 (Feb., 2000), pp. 34-55
Bargaining
  1. Legislative Bargaining. Austen-Smith and Banks, PPT II, Chapter 6. (entire first meeting) 
  2. Bargaining and Reputation. Dilip Abreu and Faruk Gul. Econometrica, Vol. 68, No. 1 (Jan., 2000), pp. 85-117
  3. Majority Rule in a Stochastic Model of Bargaining. Hulya Eraslan and Antonio Merlo. Journal of Economic Theory, Vol. 103 (Mar. 2002), pp. 31-48.

Elections and Electoral Systems
  1. A Mathematical Proof of Duverger's Law. Tom Palfrey. Published in “Models of Strategic choice in Politics” (Peter C. Ordeshook, ed.) Univ. of Michigan Press: Ann Arbor 1989, pp. 69-91. 
  2. Redistributing Income under Proportional Representation. David Austen-Smith. The Journal of Political Economy, Vol. 108, No. 6 (Dec., 2000), pp. 1235-1269
  3. Party Formation and Policy Outcomes under Different Electoral Regimes. Massimo Morelli. The Review of Economic Studies, Vol. 71, No. 3 (Jul., 2004), pp. 829-853
  4. Ideology and Competency under Alternative Electoral Systems. Matias Iaryczower and Andrea Mattozzi. Typescript.
Bandits
  1. Optimal Search for the Best Alternative. Martin L. Weitzman. Econometrica, Vol. 47, No. 3 (May, 1979), pp. 641-654
  2. Optimal Retention in Agency Problems. Jeffrey S. Banks and Rangarajan K. Sundaram. Journal of Economic Theory, Volume 82, Issue 2, October 1998, Pages 293-323
  3. Strategic Experimentation with Exponential Bandits. Godfrey Keller, Sven Rady and Martin Cripps, Econometrica, Vol. 73, No. 1 (Jan., 2005), pp. 39-68
  4. Negatively Correlated Bandits. Nicolas Klein and Sven Rady. Typescript.

Global Games
  1. Global Games: Theory and Applications (with Hyun Song Shin), in Advances in Economics and Econometrics (Proceedings of the Eighth World Congress of the Econometric Society), edited by M. Dewatripont, L. Hansen and S. Turnovsky. Cambridge: Cambridge University Press (2003), 56-114. 
  2. Complementarities and Games: New Developments. Xavier Vives. Journal of Economic Literature, Vol. 43 (June 2005), pp. 437-479. 
  3. George-Marios Angeletos & Christian Hellwig & Alessandro Pavan, 2007. "Dynamic Global Games of Regime Change: Learning, Multiplicity, and the Timing of Attacks," Econometrica, Econometric Society, vol. 75(3), pages 711-756, 05
  4. Efficient Dynamic Coordination with Individual Learning. Amil Dasgupta, Jakub Steiner, and Colin Stewart. Typescript.