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De Figueiredo (2002) - Electoral Competition Political Uncertainty And Policy Insulation (view source)
Revision as of 19:43, 28 May 2010
, 19:43, 28 May 2010→The Reciprocity Game (RG)
Note that cooperation can not be sustained if <math>\beta < \frac{1}{2}\,</math>.
<math>\beta\,</math> could be high because:
*Groups value policy continuity (<math>\beta\,</math> is endogenously high)
*Groups are risk averse
*Policies could be more effective with lower policy volatility
*Much political bargaining takes place across many dimensions - if players care about two dimensions and their indifference curves are elliptical then compromise positions will yield benefits.
The paper then considers the comparative statics of the relationship between uncertainty and cooperation. The results include:
*As <math>\gamma\,</math> approaches <math>\frac{1}{2}\,</math> cooperation can be sustained over a wider range of parameters.
**Therefore as political uncertainty increases it is easier to sustain cooperation.
