Public institutions under idiosyncratic uncertainty
Ogden, Benjamin G.
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Analysis of public institutions must be robust to the uncertainties facing agents within them, and the varying ways in which individuals cope with these uncertainties. This dissertation uses formal theoretical models to analyze the subjective and idiosyncratic nature with which most citizens face risk and uncertainty. This dissertation focuses on how different public institutions perform in specific settings based on the possibilities that agents may err in either their assessment of possible outcomes or the relevant choices and payoffs that are available. In the first chapter, I show that allowing for voter beliefs to feature ex-post error changes the incentives for candidates to set policy platforms, reducing the incentives for candidate convergence even with purely electorally-motivated candidates. Therefore, even if voters are on-average correct about political platforms and behavior, the distribution of imprecision will still change the incentives of political actors competing for their votes. This reopens consideration of how American political polarization may be driven by changes in the ways in which voters form beliefs about politicians, even as the distribution of political preferences may have remained unchanged. In the second chapter, co-authored with Keith N. Hylton, we determine that the incentives for potential litigants depend fundamentally upon the specific setting in which courts make determinations. We show that courts, facing only the facts concerning this particular decision, and not all the facts necessary to determine the global optimum, will be more likely to create incentives for socially excessive (i.e., defensive) care. In the final chapter, I modify a model of strategic communication to consider situations under which groups may be able to manipulate legislators who are uncertain which topics are most salient to said groups. Such uncertainty changes the incentives of interest groups, providing a new avenue of exploration for why different ideological groups take on different issues. I find that they must weigh the ability to “hide” their salient issue within a bundle of others with the possibility that taking on too many will cause the receiver to ignore their advice entirely.