This paper introduces rational expectations voting into an agentbased model of collective choice. Our model is unique because it generates sophisticated forecasts of endogenous policy outcomes by computationally sampling the space of exogenous random variables. Together these forecasts generate a common prior, a joint distribution of all random variables as a function of the set of policy choices, which agents use to select the policy that maximizes their expected utility. We apply our simulated rational expectations methodology by using administrative data on property taxes from two U.S. cities to investigate how observed levels of (plausibly exogenous) tax-payment uncertainty affect collective choice. Specifically, we show that, for sophisticated risk-averse or loss-averse voters, higher levels of tax-payment uncertainty generate majority support for a binding constraint on collective choice.
Shedding Light on the Shadow of the Economy: Research Methods in Studies on Tax Behavior
, Review of Behavioral Economics, Volume 3, Issue 1 10.1561/105.00000047
This is the introduction to the special issue from the issue editors.
Simulations in Tax Compliance Research: What Are They Good For?
, Review of Behavioral Economics, Volume 3, Issue 1 10.1561/105.00000042
This article by Aloys Prinz also appears in this special issue.
Differentiating Views of Inheritance: The Free Association Task as a Method to Assess Social Representations of Wealth, Inherit, and Bequeath
, Review of Behavioral Economics, Volume 3, Issue 1 10.1561/105.00000044
This article by Jennifer Stark et al. also appears in this special issue.
Review of Behavioral Economics, Volume 3, Issue 1 ICT-based Strategies for Environmental Conflicts: Articles Overiew
See the other articles that are part of this special issue.