Political representation in Switzerland : democratic or plutocratic ?

Les inégalités économiques se traduisent-elles dans des inégalités politiques à travers le processus de représentation électorale? Telle est la question centrale de cette thèse qui s'attache, par ailleurs, à investiguer les mécanismes qui tendent à produire une représentation biaisée des préférences politiques des citoyens en fonction de leur statut économique. Focalisé sur le cas de la Suisse et faisant usage des données de l'enquête postélectorale Selects de 2007, ce travail démontre que sur les rares sujets qui divisent les citoyens selon des clivages économiques - la redistribution des richesses et la sécurité sociale en particulier - les élus à l'Assemblée fédérale ont des préférences qui reflètent mieux les opinions des citoyens les plus riches. Cette sous-représentation des opinions des citoyens modestes et de ceux faisant partie du centre de la distribution des revenus peut en partie être attribuée à des différences dans les taux de participation et de connaissance politiques entre ces groupes de citoyens. La thèse met également en évidence le rôle joué par la représentation descriptive - autrement dit, la similitude en termes de statut économique entre les représentants et les représentés - dans la représentation des opinions et intérêts des citoyens. Par ailleurs, la structure du système partisan en Suisse ne reflétant pas la multidimensionnalité des préférences politiques des citoyens, les électeurs ne parviennent pas à traduire la complexité de leurs préférences politiques dans un choix de vote, ce qui, dans la configuration actuelle des forces politiques, tend à favoriser l'élection de représentants aux opinions proches de la droite sur les questions économiques. Enfin, une analyse de la représentation politique au niveau cantonal tend à soutenir la thèse selon laquelle le manque de régulation en matière de financement des partis en Suisse pourrait partiellement expliquer les inégalités dans la représentation des opinions politiques des citoyens aux revenus distincts. - Do economic inequalities translate into political inequalities through electoral representation? This is the central research question of this thesis, which also investigates the mechanisms that lead to potential economically based inequalities in the representation of citizens' policy preferences. Focusing on the case of Switzerland and making use of data provided by the post- electoral survey Selects 2007, this research demonstrates that regarding the rare policy domains in which the preferences of citizens are clearly linked to economic cleavages - redistribution and social security in particular - members of the Federal Assembly have policy preferences that best reflect the policy preferences of richer citizens. The under-representation of the opinions of relatively poor citizens and of those being the in the middle of the income distribution can be to some extent be explained by differences in political participation and political information across income groups. The thesis also puts forward the role played by descriptive representation - the similarity between representatives and represented in terms of their socioeconomic status - for the representation of citizens' preferences and interests. In addition, the structure of the party system in Switzerland does not reflect the multidimensionality of policy preferences among citizens who, as a result, have a hard time translating their complex preferences into a vote choice. Given the configuration of political actors, this tends to favour the election of representatives from the right who do not represent the preferences of their voters on economic issues. Finally, an analysis of representation at the cantonal level tends to confirm that the lack of party finance regulations in Switzerland may partially explain inequalities in the representation of citizens with different levels of income.

On the origins of electoral systems and political parties. The role of elections in multi-member districts

The old, understudied electoral system composed of multi-member districts, open ballot and plurality rule is presented as the most remote scene of the origin of both political parties and new electoral systems. A survey of the uses of this set of electoral rules in different parts of the world during remote and recent periods shows its wide spread. A model of voting by this electoral system demonstrates that, while it can produce varied and pluralistic representation, it also provides incentives to form factional or partisan candidacies. Famous negative reactions to the emergence of factions and political parties during the 18th and 19th centuries are reinterpreted in this context. Many electoral rules and procedures invented since the second half of the 19th century, including the Australian ballot, single-member districts, limited and cumulative ballots, and proportional representation rules, derived from the search to reduce the effects of the originating multi-member district system in favor of a single party sweep. The general relations between political parties and electoral systems are restated to account for the foundational stage here discussed.

Dynamic adverse selection and debt

This paper argues that the strategic use of debt favours the revelationof information in dynamic adverse selection problems. Our argument is basedon the idea that debt is a credible commitment to end long term relationships.Consequently, debt encourages a privately informed party to disclose itsinformation at early stages of a relationship. We illustrate our pointwith the financing decision of a monopolist selling a good to a buyerwhose valuation is private information. A high level of (renegotiable)debt, by increasing the scope for liquidation, may induce the highvaluation buyer to buy early at a high price and thus increase themonopolist's expected payoff. By affecting the buyer's strategy, it mayreduce the probability of excessive liquidation. We investigate theconsequences of good durability and we examine the way debt mayalleviate the ratchet effect.

Generalized canonical correlation analysis of matrices with different row and column orders

A Method is offered that makes it possible to apply generalized canonicalcorrelations analysis (CANCOR) to two or more matrices of different row and column order. The new method optimizes the generalized canonical correlationanalysis objective by considering only the observed values. This is achieved byemploying selection matrices. We present and discuss fit measures to assessthe quality of the solutions. In a simulation study we assess the performance of our new method and compare it to an existing procedure called GENCOM,proposed by Green and Carroll. We find that our new method outperforms the GENCOM algorithm both with respect to model fit and recovery of the truestructure. Moreover, as our new method does not require any type of iteration itis easier to implement and requires less computation. We illustrate the methodby means of an example concerning the relative positions of the political parties inthe Netherlands based on provincial data.

Long-run selection and the work ethic

That individuals contribute in social dilemma interactions even when contributing is costly is a well-established observation in the experimental literature. Since a contributor is always strictly worse off than a non-contributor the question is raised if an intrinsic motivation to contribute can survive in an evolutionary setting. Using recent results on deterministic approximation of stochastic evolutionary dynamics we give conditions for equilibria with a positive number of contributors to be selected in the long run.

Assesing the political viability of labour market reform: The case of employment protection

We analyze the political support for employment protection legislation.Unlike my previous work on the same topic, this paper pays a lot ofattention to the role of obsolescence in the growth process.In voting in favour of employment protection, incumbent employeestrade off lower living standards (because employment protectionmaintains workers in less productive activities) against longer jobduration. The support for employment protection will then depend onthe value of the latter relative to the cost of the former. Wehighlight two key deeterminants of this trade-off: first, the workers'bargaining power, second, the economy's growth rate-more preciselyits rate of creative destruction.

Equilibrium selection through incomplete information in coordination games: An experimental study

We perform an experiment on a pure coordination game with uncertaintyabout the payoffs. Our game is closely related to models that have beenused in many macroeconomic and financial applications to solve problemsof equilibrium indeterminacy. In our experiment each subject receives anoisy signal about the true payoffs. This game has a unique strategyprofile that survives the iterative deletion of strictly dominatedstrategies (thus a unique Nash equilibrium). The equilibrium outcomecoincides, on average, with the risk-dominant equilibrium outcome ofthe underlying coordination game. The behavior of the subjects convergesto the theoretical prediction after enough experience has been gained. The data (and the comments) suggest that subjects do not apply through"a priori" reasoning the iterated deletion of dominated strategies.Instead, they adapt to the responses of other players. Thus, the lengthof the learning phase clearly varies for the different signals. We alsotest behavior in a game without uncertainty as a benchmark case. The gamewith uncertainty is inspired by the "global" games of Carlsson and VanDamme (1993).

Optimal contracts, adverse selection and social preferences: An experiment

It has long been standard in agency theory to search for incentive-compatible mechanisms on the assumption that people care only about their own material wealth. However, this assumption is clearly refuted by numerous experiments, and we feel that it may be useful to consider nonpecuniary utility in mechanism design and contract theory. Accordingly, we devise an experiment to explore optimal contracts in an adverse-selection context. A principal proposes one of three contract menus, each of which offers a choice of two incentive-compatible contracts, to two agents whose types are unknown to the principal. The agents know the set of possible menus, and choose to either accept one of the two contracts offered in the proposed menu or to reject the menu altogether; a rejection by either agent leads to lower (and equal) reservation payoffs for all parties. While all three possible menus favor the principal, they do so to varying degrees. We observe numerous rejections of the more lopsided menus, and approach an equilibrium where one of the more equitable contract menus (which one depends on the reservation payoffs) is proposed and agents accept a contract, selecting actions according to their types. Behavior is largely consistent with all recent models of social preferences, strongly suggesting there is value in considering nonpecuniary utility in agency theory.

KIT mutations and dose selection for imatinib in patients with advanced gastrointestinal stromal tumours.

A recent randomized EORTC phase III trial, comparing two doses of imatinib in patients with advanced gastrointestinal stromal tumours (GISTs), reported dose dependency for progression-free survival. The current analysis of that study aimed to assess if tumour mutational status correlates with clinical response to imatinib. Pre-treatment samples of GISTs from 377 patients enrolled in phase III study were analyzed for mutations of KIT or PDGFRA by combination of D-HPLC and direct sequencing of tumour genomic DNA. Mutation types were correlated with patients' survival data. The presence of exon 9-activating mutations in KIT was the strongest adverse prognostic factor for response to imatinib, increasing the relative risk of progression by 171% (P<0.0001) and the relative risk of death by 190% (P<0.0001) when compared with KIT exon 11 mutants. Similarly, the relative risk of progression was increased by 108% (P<0.0001) and the relative risk of death by 76% (P=0.028) in patients without detectable KIT or PDGFRA mutations. In patients whose tumours expressed an exon 9 KIT oncoprotein, treatment with the high-dose regimen resulted in a significantly superior progression-free survival (P=0.0013), with a reduction of the relative risk of 61%. We conclude that tumour genotype is of major prognostic significance for progression-free survival and overall survival in patients treated with imatinib for advanced GISTs. Our findings suggest the need for differential treatment of patients with GISTs, with KIT exon 9 mutant patients benefiting the most from the 800 mg daily dose of the drug.

Adaptive model selection using empirical complexities

Given $n$ independent replicates of a jointly distributed pair $(X,Y)\in {\cal R}^d \times {\cal R}$, we wish to select from a fixed sequence of model classes ${\cal F}_1, {\cal F}_2, \ldots$ a deterministic prediction rule $f: {\cal R}^d \to {\cal R}$ whose risk is small. We investigate the possibility of empirically assessingthe {\em complexity} of each model class, that is, the actual difficulty of the estimation problem within each class. The estimated complexities are in turn used to define an adaptive model selection procedure, which is based on complexity penalized empirical risk.The available data are divided into two parts. The first is used to form an empirical cover of each model class, and the second is used to select a candidate rule from each cover based on empirical risk. The covering radii are determined empirically to optimize a tight upper bound on the estimation error. An estimate is chosen from the list of candidates in order to minimize the sum of class complexity and empirical risk. A distinguishing feature of the approach is that the complexity of each model class is assessed empirically, based on the size of its empirical cover.Finite sample performance bounds are established for the estimates, and these bounds are applied to several non-parametric estimation problems. The estimates are shown to achieve a favorable tradeoff between approximation and estimation error, and to perform as well as if the distribution-dependent complexities of the model classes were known beforehand. In addition, it is shown that the estimate can be consistent,and even possess near optimal rates of convergence, when each model class has an infinite VC or pseudo dimension.For regression estimation with squared loss we modify our estimate to achieve a faster rate of convergence.

Betting on Hitler: The value of political connections in Nazi Germany

This paper examines the value of connections between German industry andthe Nazi movement in early 1933. Drawing on previously unused contemporarysources about management and supervisory board composition and stock returns,we find that one out of seven firms, and a large proportion of the biggest companies,had substantive links with the National Socialist German Workers Party. Firmssupporting the Nazi movement experienced unusually high returns, outperformingunconnected ones by 5% to 8% between January and March 1933. These resultsare not driven by sectoral composition and are robust to alternative estimatorsand definitions of affiliation.

Revealed preference and indifferent selection

It is shown that preferences can be constructed from observed choice behavior in a way that is robust to indifferent selection (i.e., the agent is indifferent between two alternatives but, nevertheless, is only observed selecting one of them). More precisely, a suggestion by Savage (1954) to reveal indifferent selection by considering small monetary perturbations of alternatives is formalized and generalized to a purely topological framework: references over an arbitrary topological space can be uniquely derived from observed behavior under the assumptions that they are continuous and nonsatiated and that a strictly preferred alternative is always chosen, and indifferent selection is then characterized by discontinuity in choice behavior. Two particular cases are then analyzed: monotonic preferences over a partially ordered set, and preferences representable by a continuous pseudo-utility function.

The political economy of employment protection

This paper develops a model of job creation and job destruction in agrowing economy with embodied technical progress, that we use toanalyze the political support for employment protection legislationssuch as the ones that are observed in most European countries.We analyze the possibility of Condorcet cycles due to the fact thatworkers about to become unemployed prefer both an increase and areduction in firing costs over the status quo. Despite this problem, we show the existence of local, and sometimes global majority winners.In voting in favour of employment protection, incumbent employeestrade off lower living standards (because employment protectionmaintains workers in less productive activities) against longer job duration. We show that the gains from, and consequently the politicalsupport for employment protection (as defined by maximunjob tenure) are larger, the lower the rate of creative destruction and the largerthe worker's bargaining power. Numerical simulations suggest a hump-shaped response of firing costs to these variables, as well as negative impact of exogeneous turnover on employment protection.