12:00-13:00

Media Bias and Elections: Theory and Experiment

Junze Sun (University of Amsterdam)

This paper explores the impact of media bias on election outcomes and voter turnout, both theoretically and experimentally. We show that an increase in media bias affects the ex-ante election outcome non-monotonically and increases voter turnout. Moreover, we identify conditions under which the entry of an additional media will increase or decrease voter turnout, reconciling the mixed empirical evidence on this effect. We subsequently test our theoretical predictions in a controlled laboratory experiment and find that both election outcomes and vote shares are well predicted. However, voter turnout is much less responsive to media bias than predicted. Finally, we find no evidence that voters are systematically persuaded by biased media outlets.

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13:00-14:00

Common Belief in Rationality in Psychological Games

Stephan Jagau (University of Amsterdam)

Belief-dependent motivations and emotional mechanisms such as surprise, anxiety, anger, guilt and intention-based reciprocity pervade real-life human interaction. At the same time, traditional game theory has experienced huge difficulties trying to capture them adequately. Psychological game theory, initially introduced by Geanakoplos et al. (1989), has proven to be a useful modeling framework for these and many more psychological phenomena. While many behavioral models and experimental studies nowadays rely on the psychological-games framework, theoretical insight into psychological games and their fundamental properties is still very limited. In this paper, we use the epistemic approach to psychological games to systematically study common belief in rationality, also known as correlated rationalizability. We provide sufficient conditions for existence of rationalizable strategies and develop an iterative procedure that, for a given psychological game, determines all rationalizable choices. In addition, we characterize classes of psychological games that allow for a finite procedure. These are found to contain most of the games that have been studied in applications.
(Joint with Andrés Perea)