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Mathematics, 06.12.2019 07:31 sciencecreation87

Consider a two-candidate election with two candidates; a republican dedicated to austerity (a) and a democrat dedicated to expansionary spending (s, for stimulus). imagine that austerity is better for the economy when it is strong, but stimulus spending is better when the economy is weak; therefore, a voter gets 1 from the correct candidate being elected, and βˆ’1 otherwise. for simplicity, let there be two voters. call one the "informed" voter (i) and the other the "uninformed" (u). the informed voter knows the state of the economy with certainty, but the uninformed voter possesses believes that it is strong with probability .9 and weak with probability .1 and receives no private information. each voter knows their type, whether they are uninformed or informed, and may either vote or abstain. a tie is broken with a coin flip.

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