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The model presented in this video combines a game theoretic approach with mechanism design to examine the influence of competition on welfare maximization by politicians. It is shown that in “pure” competition between two politicians only the allocation of favors to the electorate helps winning elections, while welfare-maximizing tools of redistribution do not improve a politician’s vote-share. As FELIX BIERBRAUER points out, one might follow that when trying to create welfare-maximizing outcomes, politics fail the same way markets do; and if the goal is to have efficient outcomes, political competition is as good or bad as a market.


Felix Bierbrauer is a Guest Researcher at the Max Planck Institute for Research on Collective Goods and is Chair of the Centre for Macroeconomic Research and Public Economics. Between 2006 and 2007, Bierbrauer taught as a Visiting Scholar at the Massachusetts Institute of Technology’s Department of Economics.

Bierbrauer’s main research revolves around economic theory, with a specific interest in the interplay between political competition and social welfare. For his paper on ‘Political Competition and Mirrleesian Income Taxation’, Bierbrauer received the 2012 Young Economist Award from the International Institute of Public Finance.


University of Cologne (Universität zu Köln)

Founded in 1388, the University of Cologne (UoC) is the second oldest German university. Its heritage goes hand in hand with a thoroughly modern outlook. The UoC is one of the leading German research universities with an increasing international reach. In 2012 the University won substantial funding in the German Excellence Initiative and is now one of eleven German Excellence Universities. The UoC has a culture which supports individual research as well as medium and large scale collaborative projects. Our flexible approach allows us to reward individual excellence, develop promising fields, build up critical mass and embrace emerging new fields. Research is conducted in our six faculties and in a number of cross-faculty research centers. We are firmly committed to the advancement of fundamental research and have particular strengths in our six competence areas: Aging and demographic change, Social and economic behavior, Quantitative modeling of complex systems, Cultures and societies in transition, Social inequalities and intercultural education and Plant sciences. (Source: University of Cologne)
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Original publication

Efficiency, Welfare, and Political Competition

Bierbrauer Felix and Boyer Pierre
Quarterly Journal of Economics
Published in 0

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