Stability and change in party preferences.

This article analyses stability and volatility of party preferences using data from the Swiss Household-Panel (SHP), which, for the first time, allow studying transitions and stability of voters over several years in Switzerland. Analyses cover the years 1999- 2007 and systematically distinguish changes between party blocks and changes within party blocks. The first part looks at different patterns of change, which show relatively high volatility. The second part tests several theories on causes of such changes applying a multinomial random-effects model. Results show that party preferences stabilise with their duration and with age and that the electoral cycle, political sophistication, socio-structural predispositions, the household-context as well as party size and the number of parties each explain part of electoral volatility. Different results for withinand between party-block changes underlie the importance of that differentiation.

Do voting advice applications have an effect on electoral participation and voter turnout ? : Evidence from the 2007 Swiss Federal Elections

Voting Advice Applications (VAAs) render a valuable platform for tackling one of democracy's central challenges: low voter turnout. Studies indicate that lack of information and cost-benefit considerations cause voters to abstain from voting. VAAs are online voting assistance tools which match own political preferences with those of candidates and parties in elections. By assisting voters in their decision-making process prior to casting their votes, VAAs not only rebut rational choice reasoning against voting but also narrow existing information gaps. In this paper we examine the impact of VAAs on participation and voter turnout. Specifically, we present results on how the Swiss VAA smartvote affected voter turnout in the 2007 federal elections. Our analyses suggest that smartvote does have a mobilizing capacity, especially among young voters who are usually underrepresented at polls. Moreover, the study demonstrates how VAAs such as smartvote do affect citizen's propensity to deal with politics in general.

What explains electoral turnout in Swiss municipalities?

What explains the higher electoral turnout in some of the Swiss municipalities? Since there are important differences as far as size, socio-economic structure, importance, political systems and the prevailing political culture are concerned, the Swiss municipalities offer a laboratory-like field of research. Using aggregate level data from our own surveys and from official sources covering the whole country this paper investigates the determinants of voting turnout at the local level. It comes to the following conclusion: The level of electoral turnout in Swiss municipalities depends to an important extent on institutional variables. If the executive is elected in a citizens' assembly there are considerably fewer people participating than in elections at the polls. PR also has a positive effect on turnout, whereas it cannot be shown that having a local parliament leads to higher turnout (and thus to increased interest in politics). Another important variable is the size of a municipality. In smaller municipalities turnout is consistently higher than in bigger ones. As for the importance of Catholicism for turnout, our study confirms the findings of Freitag (2005) at the cantonal level. The Catholic milieu has a positive impact on participation

The Impact of the Electoral System on Political Campaigning : Are Candidates for the Council of States More Moderate than their Fellow Candidates for the National Council ?

It is commonly believed that majority voting enhances parties to cluster around the centre of the political space, whereas proportional systems (PR) foster great ideological divergence. The theoretical arguments for these expectations go back to the work of Downs (1957) and Duverger (1954). More recent studies, however, produced quite contradictory empirical findings. In this paper I will test whether similar arguments hold true for the positioning of candidates campaigning in different electoral systems. The elections for the two chambers of the Swiss Parliament and the data from the Swiss Electoral Studies (SELECTS) and the Swiss Voting Advice Application (VAA) smartvote offer an excellent - almost laboratory like - opportunity to do so empirically. The analyses show clearly, the theoretical claims that majority voting necessarily fosters more moderate positions find no support. The candidates for the Council of States, elected in a majority system, are not more moderate than their fellow party candidates for the National Council which are elected in a PR system.

Mind the Gap. Do Proportional Electoral Systems Foster a More Equal Representation of Women and Men, Poor and Rich ?

Female gender and low income are two markers for groups that have been historically disadvantaged within most societies. The study explores two research questions related to their political representation: 1) Are parties ideologically biased towards the ideological preferences of male and rich citizens? 2) Does the proportionality of the electoral system moderate the degree of underrepresentation of women and poor citizens in the party system? A multilevel analysis of survey data from 24 parliamentary democracies indicates that there is some bias against those with low income and, at a much smaller rate, women. This has systemic consequences for the quality of representation, as the preferences of the complementary groups differ. The proportionality of the electoral system influences the degree of underrepresentation: specifically, larger district magnitudes help closing the considerable gap between rich and poor.

Three essays on the psychology of investment and financial markets

Préface My thesis consists of three essays where I consider equilibrium asset prices and investment strategies when the market is likely to experience crashes and possibly sharp windfalls. Although each part is written as an independent and self contained article, the papers share a common behavioral approach in representing investors preferences regarding to extremal returns. Investors utility is defined over their relative performance rather than over their final wealth position, a method first proposed by Markowitz (1952b) and by Kahneman and Tversky (1979), that I extend to incorporate preferences over extremal outcomes. With the failure of the traditional expected utility models in reproducing the observed stylized features of financial markets, the Prospect theory of Kahneman and Tversky (1979) offered the first significant alternative to the expected utility paradigm by considering that people focus on gains and losses rather than on final positions. Under this setting, Barberis, Huang, and Santos (2000) and McQueen and Vorkink (2004) were able to build a representative agent optimization model which solution reproduced some of the observed risk premium and excess volatility. The research in behavioral finance is relatively new and its potential still to explore. The three essays composing my thesis propose to use and extend this setting to study investors behavior and investment strategies in a market where crashes and sharp windfalls are likely to occur. In the first paper, the preferences of a representative agent, relative to time varying positive and negative extremal thresholds are modelled and estimated. A new utility function that conciliates between expected utility maximization and tail-related performance measures is proposed. The model estimation shows that the representative agent preferences reveals a significant level of crash aversion and lottery-pursuit. Assuming a single risky asset economy the proposed specification is able to reproduce some of the distributional features exhibited by financial return series. The second part proposes and illustrates a preference-based asset allocation model taking into account investors crash aversion. Using the skewed t distribution, optimal allocations are characterized as a resulting tradeoff between the distribution four moments. The specification highlights the preference for odd moments and the aversion for even moments. Qualitatively, optimal portfolios are analyzed in terms of firm characteristics and in a setting that reflects real-time asset allocation, a systematic over-performance is obtained compared to the aggregate stock market. Finally, in my third article, dynamic option-based investment strategies are derived and illustrated for investors presenting downside loss aversion. The problem is solved in closed form when the stock market exhibits stochastic volatility and jumps. The specification of downside loss averse utility functions allows corresponding terminal wealth profiles to be expressed as options on the stochastic discount factor contingent on the loss aversion level. Therefore dynamic strategies reduce to the replicating portfolio using exchange traded and well selected options, and the risky stock.

Three essays on bankruptcy risk

Abstract Market prices of corporate bond spreads and of credit default swap (CDS) rates do not match each other. In this paper, we argue that the liquidity premium, the cheapest-to-deliver (CTD) option and actual market segmentation explain the pricing differences. Using the European transaction data from Reuters and Bloomberg, we estimate the liquidity premium that is time- varying and firm-specific. We show that when time-dependent liquidity premiums are considered, corporate bond spreads and CDS rates behave in a much closer way than previous studies have shown. We find that high equity volatility drives pricing differences that can be explained by the CTD option.

Impact of voting advice applications on voters's decision-making

So-called online Voting Advice Applications (VAAs) have become very popular all over Europe. Millions of voters are using them as an assistance to make up their minds for which party they should vote. Despite this popularity there are only very few studies about the impact of these tools on individual electoral choice. On the basis of the Swiss VAA smartvote we present some first findings about the question whether VAAs do have a direct impact on the actual vote of their users. In deed, we find strong evidence that Swiss voters were affected by smartvote. However, our findings are somewhat contrary to the results of previous studies from other countries. Furthermore, the quality of available data for such studies needs to be improved. Future studies should pay attention to both: the improvement of the available data, as well as the explanation of the large variance of findings between the specific European countries.

Fiscal Federalism at the Ballot Box : The Relevance of Expressive Voting

This paper explores the impact of citizens' motivation to vote on the pattern of fiscal federalism. If the only concern of instrumental citizens was outcome they would have little incentive to vote because the probability that a single vote might change an electoral outcome is usually minuscule. If voters turn out in large numbers to derive intrinsic value from action, how will these voters choose when considering the role local jurisdictions should play? The first section of the paper assesses the weight that expressive voters attach to an instrumental evaluation of alternative outcomes. Predictions are tested with reference to case study analysis of the way Swiss voters assessed the role their local jurisdiction should play. The relevance of this analysis is also assessed with reference to the choice that voters express when considering other local issues. Textbook analysis of fiscal federalism is premised on the assumption that voters register choice just as 'consumers' reveal demand for services in a market, but how robust is this analogy.

Pre-Election Positions and Voting Behaviour in Parliament: Consistency among Swiss MPs

This article examines the determinants of positional incongruence between pre-election statements and post-election behaviour in the Swiss parliament between 2003 and 2009. The question is examined at the individual MP level, which is appropriate for dispersion-of-powers systems like Switzerland. While the overall rate of political congruence reaches about 85%, a multilevel logit analysis detects the underlying factors which push or curb a candidate's propensity to change his or her mind once elected. The results show that positional changes are more likely when (1) MPs are freshmen, (2) individual voting behaviour is invisible to the public, (3) the electoral district magnitude is not small, (4) the vote is not about a party's core issue, (5) the MP belongs to a party which is located in the political centre, and (6) if the pre-election statement dissents from the majority position of the legislative party group. Of these factors, the last one is paramount.

Does VAA popularity pay off ? : Smartvote users preferred candidates and their results in the 2007 Swiss federal elections

Voting is fundamental for democracy, however, this decisive democratic act requires quite an effort. Decision making at elections depends largely on the interest to gather information about candidates and parties, the effort to process the information at hand and the motivation to reach a vote choice. Especially in electoral systems with highly fragmented party systems and hundreds of candidates running for office, the process of decision making in the pre‐election sphere is highly demanding. In the age of information and communication technologies, new possibilities for gathering and processing such information are available. Voting Advice Applications (VAAs) provide guidance to voters prior to the act of voting and assist voters in choosing between different candidates and parties on the basis of issue congruence. Meanwhile widely used all over the world, scientific inquiry into the effect of such tools on electoral behavior is ongoing. This paper adds to the current debate by focusing on whether the popularity of candidates on the Swiss VAA smartvote eventually paid off at the 2007 Swiss federal elections and whether there is a direct link between the performance of a candidate on the tool and his or her electoral performance.