Formal Models of Political Economics

Undergraduate / Graduate

Why do the Republicans and the Democrats almost always ended up choosing moderates as their party nominees in presidential races? How do "checks and balances" such as a legislative committee's power to set the agenda or a president's power to veto a bill affect policy outcomes? What leads to coalition building in a legislature and how does it affect the result of legislative bargaining? When can a legislature optimally delegate its power to a bureaucratic agency who has its own interests and agenda? To answer questions like these, we study formal models of political economics. Such models examine explicitly the incentives of participants in political processes and generate predictions of their behavior based on such incentives and any confounding strategic considerations. Our approach is largely game theoretical. Familiarity with fundamental game theoretical ideas like the strategic and extensive games, the Nash Equilibrium, and the Subgame Perfect Equilibrium is essential and assumed.