December 2023
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6 Reads
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1 Citation
European Economic Review
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Publications (43)
May 2023
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14 Reads
Journal of Public Economic Theory
We introduce a model of group behavior that combines expressive participation with strategic participation. Building on the idea that expressive voting in elections is much like rooting for a sports team, we give applications to both sporting events and elections. In our model there is an expressive externality: an individual enjoys an event more when more of her peers come out to support her preferred party or team. We show that this results in the possibility of “tipping”—that participation may jump up discontinuously when the externality becomes strong enough. We examine the implications for pricing by sports teams and for voter turnout.
February 2023
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42 Reads
We introduce a model of group behavior that combines expressive participation with strategic participation. Building on the idea that expressive voting in elections is much like rooting for a sports team (Brennan and Buchanan, 1984; Brennan and Hamlin, 1998), we give applications to both sporting events and elections. In our model there is an expressive externality: an individual enjoys an event more when more of her peers come out to support her preferred party or team. We show that this results in the possibility of tipping - that participation may jump up discontinuously when the externality becomes strong enough. We examine the implications for pricing by sports teams and for voter turnout.
December 2022
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7 Reads
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3 Citations
Journal of Economic Behavior & Organization
We study a model of institutions that evolve through conflict. We find that one of three configurations can emerge: an extractive hegemony, a balance of power between extractive societies or a balance of power between inclusive societies - the latter being most conducive to innovation. As extractive societies are assumed to have an advantage in head to head confrontations we refer to this latter possibility as the survival of the weakest. Our contention is that the reason that the West “rules” can be traced back to two events both taking place in China: the invention of the cannon, which made possible the survival of the weakest in Europe; and the arrival of Genghis Khan, which led to the survival of the strongest in China.
January 2022
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11 Reads
January 2022
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8 Reads
SSRN Electronic Journal
August 2021
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38 Reads
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5 Citations
Journal of Public Economic Theory
A variety of experimental and empirical research indicate that prosocial behavior is important for economic success. There are two sources of prosocial behavior: incentives and preferences. The latter, the willingness of individuals to “do their bit” for the group, we refer to as internalization, because we view it as something that a group can influence by appropriate investment. This implies that there is a trade-off between using incentives and internalization to encourage prosocial behavior. By examining this trade-off we shed light on the connection between social norms observed inside the laboratory and those observed outside in the field. For example, we show that a higher value of cooperation outside the laboratory may lower the use of incentives inside the laboratory even as it increases their usage outside. As an application we show that the model calibrated to experimental data makes reasonable out-of-sample quantitative forecasts.
April 2021
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179 Reads
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3 Citations
Journal of the European Economic Association
We study the consequences of policy interventions when social norms are endogenous but costly to change. In our environment a group faces a negative externality that it partially mitigates through incentives in the form of punishments. In this setting policy interventions can have unexpected consequences. The most striking is that when the cost of bargaining is high introducing a Pigouvian tax can increase output - yet in doing so increase welfare. An observer who saw that an increase in a Pigouvian tax raised output might wrongly conclude that this harmed welfare and that a larger tax increase would also raise output. This counter-intuitive impact on output is demonstrated theoretically for a general model and found in case studies for public goods subsidies and cartels.
January 2021
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2 Reads
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6 Citations
October 2020
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23 Reads
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3 Citations
International Economic Review
The relevance of special interests lobbying in modern democracies can hardly be questioned. But if large trade associations can overcome the free riding problem and form effective lobbies, why do they not also threaten market competition by forming equally effective cartels? We argue that the key to understanding the difference lies in supply elasticity. The group discipline, which works in the case of lobbying, can be effective in sustaining a cartel only if increasing output is sufficiently costly—otherwise the incentive to deviate is too great. The theory helps organizing a number of stylized facts within a common framework.
Citations (28)
... But the study of institutions in historical analysis is very complex -how are they defined, how they change, how they are measured -and it requires analytical frameworks of reference which theoretical work is attempting to provide. Five chapters in this section of the book (Acemoglu et al., 2021;Bowles et al., 2021;Levine and Modica, 2021;Persson and Tabellini, 2021; who confirm Ester Boserup's thesis regarding the origins of gender role differences in different forms of agriculture practiced traditionally (specifically, shifting and plough cultivation); Juhász (2018) who finds strong evidence for the classic hypothesis that industry protection reduces technological adoption by studying the effects on the development of the French cotton industry of the differential effectiveness of Napoleonâs continental blockade on the North and the South of France; Squicciarini and Voigtländer (2015) who document a strong relationship between economic growth and endowment of high end human capital in early 19th century France (measured with the subscriptions to the Encyclopedie), as predicted by traditional growth theory in economics (Barro et al., 1995;Acemoglu, 2012 (Federico, 2021), the economic history of Africa (Frankema, 2021), the economic history of religion (Becker et al., 2021), the consequences of foreign intervention after WWII (Matis et al., 2021), and monetary policy and banking . It also includes four interpretative essays, which build on the authors' previous work (Ashraf et al., 2021;Broadberry, 2021;Clark, 2021;Mokyr, 2021) and a few case studies of new research work (Hall and Sargent, 2021;Stasavage, 2021;Greenwood et al., 2021). ...
- Citing Chapter
January 2021
... In a recent contribution, Levine and Modica (2022) develop an evolutionary model of conflict which they apply to study the historical rise of Western Europe. Building on Levine and Modica (2013), they analyze how conflict between a commercial and a military elite can drive institutional evolution. ...
Reference:
Feudal political economy
- Citing Article
December 2022
Journal of Economic Behavior & Organization
... See, for example, Levine and Modica (2016) and Dutta et al. (2021). 6 The average stadium attendance rates for clubs in the Premier League are close to 100% in almost all seasons. ...
- Citing Article
- Full-text available
August 2021
Journal of Public Economic Theory
... Another strand of recent literature highlights the existence of possible unexpected effects of naive policy interventions in the presence of social norms by focusing on how the incentives introduced by policies interact with the endogenous emergence of these norms (see for instanceDutta, Levine, and Modica, 2021).4 This paper relies on the same data asGalbiati, Henry, and Jacquemet (2018), who focus on games occurring late in the experiment, when learning about norms prevalent in the group has converged. ...
- Citing Article
- Full-text available
April 2021
Journal of the European Economic Association
... They inflict great harm on lowand middle-income Americans. 181 In a report to President Barack Obama, the President's Council of Advisors on Science and Technology (PCAST) (2015) quotes a survey where the average price for a pair of hearing aids was $4,726. 182 The cost of manufacturing them is perhaps $300. ...
- Citing Article
October 2020
International Economic Review
... This disconnect caused an already small team to lose valuable talent, but also caused poor decisions that did not align with the ethos of the community their product served. The aforementioned condition is a known phenomenon in organizations and social networks research often referred to as "two-masters syndrome", 45,46 which could itself be a community smell which was not previously manifested nor formalized in software engineering research and practice and may deserve further attention at least to support collaborative and computer supported cooperative work in the scope of software production and operation platforms such as GitHub. ...
- Citing Article
- Full-text available
June 2018
Journal of Economic Theory
... To see that it is strictly increasing observe that increasing b j increases g n (x j |e j ) in first order stochastic dominance. Finally, it is shown in the Web Appendix of Dutta, Levine and Modica (2018) that Pr(|x j − e j | > 1/n) ≤ 1/n so that we have pointwise convergence at every continuity point of p. Pointwise convergence on the diagonal is by definition. ...
Reference:
Success in contests
- Citing Article
- Full-text available
February 2018
Theoretical Economics
... These might be social punishments such as ostracism, or even monetary punishments such as fines. We model monitoring following Levine and Modica (2016): this model has been used by Levine and Modica (2017) to study lobbying groups and by Levine and Mattozzi (2020) to study political parties. In this model there is a noisy signal of individual behavior and the possibility of imposing punishments based on these signals. ...
- Citing Article
January 2017
European Journal of Political Economy
... As pointed out by previous studies, in standard state-space models, several assumptions leads to Triviality (i.e., an agent is aware of the whole state space). (Modica & Rustichini, 1994) show the equivalence between Negative Introspection and Symmetry (Theorem 1). (Dekel et al., 1998) show that, if state-space models satisfy Necessitation, Plausibility, KU Introspection, and AU Introspection, then there is no event that some agent is unaware of Chen et al. (2012) investigate the relationship between Negative Introspection and AU Introspection. ...
- Citing Chapter
January 1997
... These foundational works use the concept of "stochastically stable states" or "long-run equilibria" to select equilibrium in games with multiple equilibria. Over time, various papers have explored questions related to the speed of convergence and the properties of intermediate outcome (e.g., Ellison 2000;Cui and Zhai 2010;Levine and Modica 2016). Additionally, this theory has been applied to the study of evolutionary dynamics in network games (e.g., Jackson and Watts 2002;Staudigl and Weidenholzer 2014). ...
- Citing Article
- Full-text available
January 2016
Theoretical Economics