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Polarization, Political Instability and Active Learning *
Author(s) -
Ossokina Ioulia V.,
Swank Otto H.
Publication year - 2003
Publication title -
scandinavian journal of economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.725
H-Index - 64
eISSN - 1467-9442
pISSN - 0347-0520
DOI - 10.1111/1467-9442.00001
Subject(s) - salient , polarization (electrochemistry) , political instability , politics , economics , instability , affect (linguistics) , outcome (game theory) , political economy , positive economics , political science , psychology , microeconomics , law , physics , chemistry , quantum mechanics , communication
In a multiperiod setting, decision‐makers can learn about the consequences of their decisions through experimentation. We examine how polarization and political instability affect learning through experimentation. We distinguish two cases: (i) the decision to be made is not salient and does not affect the outcome of subsequent elections (exogenous elections) and (ii) the decision is salient and the election outcome depends on it (endogenous elections). It is shown that while the possibility of learning increases activism, the existence of political instability distorts learning. Furthermore, we demonstrate that, when elections are exogenous, polarization between political parties does not always decrease active learning.