The probabilistic voting theory, also known as the probabilistic voting model, is a

voting theory Social choice theory or social choice is a theoretical framework for analysis of combining individual opinions, preferences, interests, or welfares to reach a ''collective decision'' or ''social welfare'' in some sense.Amartya Sen (2008). "Soc ...

developed by professors

Assar Lindbeck Carl Assar Eugén Lindbeck (26 January 1930 – 28 August 2020) was a Swedish professor of economics at Stockholm University and at the Research Institute of Industrial Economics (IFN). Lindbeck was a member of the Royal Swedish Academy o ...

and

Jörgen Weibull Jörgen is a village in the municipality of Tieschen in the ''Bezirk'' of Südoststeiermark in the Federal State of Styria in Austria. Its population was 159 in 2016. Jörgen is known for its fine white wines. Next to the more common white w ...

in the article "Balanced-budget redistribution as the outcome of political competition", published in 1987 in the journal ''Public Choice'', which has gradually replaced the median voter theory, thanks to its ability to find equilibrium within multi-dimensional spaces. The probabilistic voting model assumes that voters are imperfectly informed about candidates and their platforms. Candidates are also imperfectly informed about the utility preferences of the electorate and the distribution of voters' preferences. Unlike the median voter theorem, what drives the equilibrium policy is both the numerosity and the density of social groups and not the median position of voters on a preference scale. This difference explains why social groups which have a great homogeneity of preferences are more politically powerful than those whose preferences are dispersed.

Motivation and Applications

Political economy Political economy is the study of how economic systems (e.g. markets and national economies) and political systems (e.g. law, institutions, government) are linked. Widely studied phenomena within the discipline are systems such as labour ...

and

public economics Public economics ''(or economics of the public sector)'' is the study of government policy through the lens of economic efficiency and equity. Public economics builds on the theory of welfare economics and is ultimately used as a tool to improve s ...

are the main fields where the probabilistic voting theory is applied. In particular, it was used to explain

public expenditure Public expenditure is spending made by the government of a country on collective needs and wants, such as pension, provisions, security, infrastructure, etc. Until the 19th century, public expenditure was limited as laissez faire philosophies ...

(Persson & Tabellini, 2000; Hassler, Krusell, Storesletten & Zilibotti, 2005),

public debt A country's gross government debt (also called public debt, or sovereign debt) is the financial liabilities of the government sector. Changes in government debt over time reflect primarily borrowing due to past government deficits. A deficit oc ...

dynamics (Song, Storesletten & Zilibotti, 2012), effect of mass media (Strömberg, 2004)

social security Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...

systems (Profeta, 2002; Gonzalez Eiras & Niepelt, 2008) and taxation (Hettich & Winer, 2005; Canegrati, 2007). Raphael Boleslavsky and Christopher Cotton (2015) show how the underlying uncertainty that candidates have about the preferences of voters may be the result of information revelation during campaigns, with more informative campaigns leading to greater ex ante uncertainty about election-day preferences. This in turn can increase policy divergence. Probabilistic voting models are usually preferred to traditional Downsian median voter models, as in the former all voters have an influence on the policy outcome, whereas in the latter all power rests in the hands of the pivotal voter or group. For instance, in models where young and old (or rich and poor) voters have conflicting interests, probabilistic voting models predict that the winning candidate strikes a balance between the different interests in her/his policy platform. Due to the smooth mapping between the distribution of policy preferences and the political outcomes, this model has proven to be very tractable and convenient to use in dynamic models with repeated voting.

References

* Assar Lindbeck, and Jörgen W. Weibull (1987). "Balanced-budget redistribution as the outcome of political competition." ''Public Choice'', 52(3), 273–297. Raphael Boleslavsky and Christopher Cotton (2015). "Information and extremism in elections." ''American Economic Journal: Microeconomics.'' 7, 165-207 Canegrati, Emanuele (2007). "A Contribution to the Positive Theory of Direct Taxation," MPRA Paper 6117 Gonzalez-Eiras, Martín, and Dirk Niepelt (2008). "The Future of Social Security." ''Journal of Monetary Economics'' 55, 197-218 Hassler, John, Per Krusell, Kjetil Storesletten, and Fabrizio Zilibotti (2005). "The dynamics of government." ''Journal of Monetary Economics'' 52 (7), 1331-1358 Hettich, Walter, and Stanley Winer (2005) ''Democratic Choice and Taxation A Theoretical and Empirical Analysis.'' Cambridge University Press. Persson, Torsten, and Guido Tabellini (2000). ''Political Economics: Explaining Economic Policy.'' Cambridge, Mass.: MIT Press. Profeta, Paola (2002). "Retirement and Social Security in a Probabilistic Voting Model" ''International Tax and Public Finance'' 9, 331–348. Strömberg, David "Mass Media Competition, Political Competition, and Public Policy (2004)." ''Review of Economic Studies'' 71(1), 265–284. Song, Zheng, Kjetil Storeseletten, and Fabrizio Zilibotti (2012). "Rotten parents and disciplined children: A politico-economic theory of public expenditure and debt". ''Econometrica'' 80 (6), 2785–2803 Probabilistic models Voting theory