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Correlation Neglect, Voting Behavior, and Information Aggregation

Author

Listed:
  • Gilat Levy
  • Ronny Razin

Abstract

In this paper we analyze elections when voters underestimate the correlation between their information sources ("correlation neglect"). We find that this cognitive bias can improve political outcomes. We show that the extreme beliefs which result from correlation neglect induce some voters to base their vote on information rather than on political preferences. We characterize conditions on the distribution of preferences under which this induces higher vote shares for the optimal policies and better information aggregation. (JEL D72, D83)

Suggested Citation

  • Gilat Levy & Ronny Razin, 2015. "Correlation Neglect, Voting Behavior, and Information Aggregation," American Economic Review, American Economic Association, vol. 105(4), pages 1634-1645, April.
    • Handle: RePEc:aea:aecrev:v:105:y:2015:i:4:p:1634-45
    Note: DOI: 10.1257/aer.20140134
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    More about this item

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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