Publication Date

2015-04-20

Availability

Open access

Embargo Period

2015-04-20

Degree Type

Dissertation

Degree Name

Doctor of Philosophy (PHD)

Department

Economics (Business)

Date of Defense

2015-03-30

First Committee Member

Raphael Boleslavsky

Second Committee Member

Christopher Cotton

Third Committee Member

Ayca Kaya

Fourth Committee Member

Manuel Santos

Abstract

This dissertation consists of three essays in the field of political economics and public policy. The first essay provides a novel theory as to why campaign finance regulation, in the form of campaign contribution limits, may improve constituent welfare. The argument is developed in a game theoretic model of policymaking and lobbying. The model involves a three stage game played between a politician and two special interest groups. First, a policymaker can collect information or acquire expertise, which enables her to better compare the merits of alternative policy choices. Second, interest groups observe the policymaker's level of expertise and can offer political contributions in exchange for their preferred policy. Third, the policymaker chooses one of the policies. In equilibrium, expected political contributions are strictly decreasing in the policymaker's information. The analysis shows that the more information the policymaker acquires, the lower the expected payments from interest groups. A fully uninformed policymaker is unable to distinguish between policies and therefore makes her decision based only on contributions, maximizing competition between and payments from interest groups. The monetary benefits of remaining uninformed can dominate the costs associated with worse policy, and the policymaker prefers to remain fully uninformed about a range of issues, even when acquiring information is costless. The analysis also highlights a novel benefit of contribution limits, showing that they can improve policy by decreasing incentives for a policymaker to remain uninformed. The second essay studies the optimal law enforcement policy at borders and airports. At borders and airports, law enforcement targets major, planned crime such as smuggling and terrorism. Such crime tends to be planned by a strategic criminal organization that can recruit agents to attempt crime on its behalf. In this essay, we model major criminal activity as a game in which a law enforcement officer chooses the rate at which to screen different population groups, and a criminal organization (e.g. drug cartel, terrorist cell) chooses the observable characteristics of its recruits. The analysis shows that the most effective law enforcement policy imposes only moderate restrictions on the officer's ability to profile. In contrast to models of decentralized crime, requiring equal treatment never improves the effectiveness of law enforcement. The third essay examines the deterrence effects of higher pleading standards in litigation. In a recent decision, the U.S. Supreme Court increases pre-discovery pleading standards, which increase the standard of plausibility that a lawsuit must meet before proceeding to discovery and trial. In this essay, we develop a game theoretic model of litigant behavior to study the impact of higher pleading standards on choices to engage in illegal or negligent activity. The analysis shows how increasing pleading standards tends to increase illegal activity, and can increase litigation costs. These results provide a counterpoint to the Supreme Court's argument that increased plausibility requirements will decrease the costs of litigation.

Keywords

lobbying; campaign finance reform; racial profiling; law enforcement; litigation; pleading standards

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