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Impact of Information Concerning the Popularity of Candidates on Loss-Averse Voters’ Abstention

Author

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  • Kohei Daido

    (Kwansei Gakuin University)

  • Tomoya Tajika

    (Hokusei Gakuen University)

Abstract

In this study, we build a two-candidate election model, in which voters are loss averse and face uncertainty about whether their preferred candidate is supported by a majority. Even without costs for voting, abstention may occur when voters have expectations-based reference-dependent preferences, as in Kőszegi and Rabin (Q J Econ 121:1133–1165, 2006; Am Econ Rev 97:1047–1073, https://doi.org/10.1257/aer.97.4.1047 , 2007). We show that loss aversion leads to the equilibrium wherein abstention occurs in a large election, and the abstention rate of voters who prefer the minority candidate is higher than that of voters who prefer the majority candidate.

Suggested Citation

  • Kohei Daido & Tomoya Tajika, 2022. "Impact of Information Concerning the Popularity of Candidates on Loss-Averse Voters’ Abstention," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 10(1), pages 41-51, May.
    • Handle: RePEc:spr:etbull:v:10:y:2022:i:1:d:10.1007_s40505-021-00214-y
    DOI: 10.1007/s40505-021-00214-y
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    References listed on IDEAS

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    1. Botond Kőszegi & Matthew Rabin, 2006. "A Model of Reference-Dependent Preferences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 121(4), pages 1133-1165.
    2. Morton, Rebecca B. & Muller, Daniel & Page, Lionel & Torgler, Benno, 2015. "Exit polls, turnout, and bandwagon voting: Evidence from a natural experiment," European Economic Review, Elsevier, vol. 77(C), pages 65-81.
    3. John Ledyard, 1984. "The pure theory of large two-candidate elections," Public Choice, Springer, vol. 44(1), pages 7-41, January.
    4. Timothy J. Feddersen, 2004. "Rational Choice Theory and the Paradox of Not Voting," Journal of Economic Perspectives, American Economic Association, vol. 18(1), pages 99-112, Winter.
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    7. Botond Koszegi & Matthew Rabin, 2007. "Reference-Dependent Risk Attitudes," American Economic Review, American Economic Association, vol. 97(4), pages 1047-1073, September.
    8. Alberto Alesina & Francesco Passarelli, 2019. "Loss Aversion in Politics," American Journal of Political Science, John Wiley & Sons, vol. 63(4), pages 936-947, October.
    9. Herrmann, Oliver & Jong-A-Pin, Richard & Schoonbeek, Lambert, 2019. "A prospect-theory model of voter turnout," Journal of Economic Behavior & Organization, Elsevier, vol. 168(C), pages 362-373.
    10. Alberto Grillo, 2017. "Risk aversion and bandwagon effect in the pivotal voter model," Public Choice, Springer, vol. 172(3), pages 465-482, September.
    11. Jacob Goeree & Jens Großer, 2007. "Welfare Reducing Polls," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 31(1), pages 51-68, April.
    12. Bnaya Dreyfuss & Ori Heffetz & Matthew Rabin, 2019. "Expectations-Based Loss Aversion May Help Explain Seemingly Dominated Choices in Strategy-Proof Mechanisms," NBER Working Papers 26394, National Bureau of Economic Research, Inc.
    13. Taylor, Curtis R. & Yildirim, Huseyin, 2010. "Public information and electoral bias," Games and Economic Behavior, Elsevier, vol. 68(1), pages 353-375, January.
    14. Grillo, Edoardo, 2016. "The hidden cost of raising voters’ expectations: Reference dependence and politicians’ credibility," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 126-143.
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    Cited by:

    1. Leontiou, Anastasia & Ziros, Nicholas, 2024. "“Tacit bundling” among rivals: Limited-availability bargains for loss-averse consumers," European Economic Review, Elsevier, vol. 165(C).
    2. Leontiou, Anastasia & Manalis, Georgios & Xefteris, Dimitrios, 2023. "Bandwagons in costly elections: The role of loss aversion," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 471-490.

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    More about this item

    Keywords

    Abstention; Expectations-based reference-dependent preferences; Loss aversion; Signal; Voting;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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