Essays in political economics

Three essays compose the dissertation. The first essay entitled "Indirect Lobbying and Media Bias" analyzes a model where voters have state-contingent preferences over policies and lobbies engage in influence activities to affect the information that a media outlet collects on the state of the world. The media outlet acts as a "filter" between lobbies and voters. It has to decide what to communicate to voters given the information it collects and its idiosyncratic bias. We show that, by targeting voters, lobbies are able to indirectly influence the political outcome and thus create a distortion in the political process. When the media outlet has a small idiosyncratic bias the (unique) equilibrium is characterized by a large level of lobbies' influence activities and no "news-slanting" by the media outlet. When the media outlet's idiosyncratic bias is large; the (unique) equilibrium involves it low level of lobbies' influence activities and a high probability of "news-slanting" by the media outlet. Moreover, we show that a higher idiosyncratic bias of the media outlet may be associated with a lower, policy distortion and a higher voters' welfare. On the other hand, public policy measures aimed at increasing the cost of lobbies' influence activities would decrease the distortion in the policy outcome and increase voters' welfare. Finally, asymmetries in lobbies' influence activities lead to different probabilities of "news-slanting" by different media outlet's types.;The second essay entitled "Electoral Participation and Communicative Voting in Europe" (joint with Pietro Navarra) provides an empirical investigation of electoral participation and communicative voting in 14 European countries. We estimate a multi-level voting process where individuals face a participation decision (whether to vote or abstain) and a voting decision (whether to vote strategically for a likely winner party or as communicating for a sure loser party). Our main findings can be summarized as follows. First, uninformed individuals and independent ones are less likely to turnout. However, being independent and uninformed does not have any statistically significant effect on electoral participation. Thus our results do not provide empirical support to the swing voter's curse theory. Second, expressive motivations have a positive and significant effect on electoral participation. Third, the probability of voting as communicating is positively related with the level of education and the degree of dissatisfaction with the political system. Fourth, right wing extremists have a significant lower probability of voting as communicating than moderate or left wing extremists. Finally, institutional features characterizing the functioning of the political system and of the media market have a significant effect both on the participation and on the voting decision.;The third essay entitled "Heterogeneous Preferences and Endogenous Acquisition of Costly information" investigates how individuals acquire costly information. We analyze a model of endogenous acquisition of costly information in a framework where decision makers have to choose between fixed alternatives with state-dependent payoffs. The decision makers' preferences are a combination of a private value component (their idiosyncratic preferences) and a state-dependent public value component (the quality of the selected alternative). More specifically, we focus on the case where decision makers have the same ex-post ranking over alternatives but they instead differ in their ex-ante ranking over such alternatives We apply this model to a policy environment where voters can acquire costly information on the quality of candidates. We show that the optimal information acquisition strategy of a voter is "slanted" toward her ideologically closer candidate. A small amount of information in favor of the leftist candidate would be sufficient to induce a leftist voter to stop investing in information acquisition and choose that candidate. Instead, a rightist voter would find optimal to keep acquiring information and then choose the leftist candidate only if the evidence in favor of such candidate becomes very large. Hence, the more a voter is ideologically close to a candidate the higher her probability of mistakenly choosing such candidate when he is the low quality one. Moreover, the more voters care about the quality of candidates and the lower is the cost of acquiring information, the larger the amount of information that voters will acquire and the closer the behavior of extremist and moderate voters will be. Finally, every voter expects to gain from acquiring costly information but moderate voters are the ones who expect to gain the most.