acase@tulane.edu

One of the tasks public choice theorists have attempted to accomplish is the building of a theory of large majority rule elections which is based upon rational behavior and is non-vacuous. Two voting paradoxes have generally stood in the way of the development of such a theoretical framework: (1) the instability of the pure majority rule system and (2) the large turnout of voters despite the probable lack of a rational basis for voting. The purpose of this paper is the formulation of a model of majority voting incorporating the behavior of groups in the voting process which can explain large majority rule elections despite these two paradoxes Chapter I is a review of the literature concerning these two paradoxes with particular attention to previous theoretical attempts toward resolution of each. A formulation of the cost-benefit analysis of voting using interest groups is presented in Chaper II. Constituents maximize expected utility which depends not only upon which candidate wins, but also to what degree the constituent's group voted for the winning candidate. The choice of how many votes to provide is made at the group level where the benefits to the group are compared with the costs of voting. Each group is assumed to have its own production function of votes whereby it enforces its decision upon its members. Uncertainty is introduced in the model through the random influences each group faces in enforcing its voting decision. From the group perspective there is shown to be a 'rational' basis for voting In Chapter III the model is expanded to consider probability maximizing candidates with control over public good levels. It is shown that if constituents are risk averse in public good preferences, then a unique symmetric (both candidates offering identical platforms) exists. In a two group example it is demonstrated that this equilibrium will not necessarily represent the median of voter preferences. Chapter IV analyzes the theoretical and empirical implications for future research of the results of the model / acase@tulane.edu

acase@tulane.edu

acase@tulane.edu

acase@tulane.edu

The behavior of a monopolist producing a good where quality is a choice variable has been the topic of much economic research. Many articles restrict the seller to selecting a single quality, while at the other extreme are models where the monopolist produces a continuous range of qualities among which consumers may choose. The effects of a quality standard on the monopolist's pricing behavior have been studied in the first type of model, but not in the second This dissertation fills this gap. It consists of three essays concerning quality standards in multiquality markets, and is organized as follows The first essay sets the framework for the analysis by re-examining the second class of models. Employing Mussa and Rosen's assumptions (1978) to study the behavior of a monopolist pricing a range of qualities, it generates the same results of their model, but does so with a different technique: the calculus of variations on a free end-point problem. Essay I also extends some results by generalizing the consumers' utility functions Studying the problem with the calculus of variations on a free, instead of fixed, end-point problem enables Essay II to examine the effect of a minimum acceptable quality standard on the monopolist's behavior. Introducing such a standard can alter the entire quality and concomitant price schedule offered. These changes and their implications for general welfare are studied assuming both a uniform and a more general distribution of consumers by taste While Essay II studies the effect of quality standards, it does so without providing any rationale for their existence. Essay III remedies this defect by examining a market with negative externalities. It studies both competitive and monopolistic markets and compares the general welfare effects of standards and taxes imposed to internalize the problem. For competitive markets, externality taxes are Pareto superior to standards, but one numerical example for a monopolistic market indicates that the same general conclusion does not hold in the monopoly case. This and some distributional considerations in the Appendix may therefore help to explain the prevalence of standards observed empirically / acase@tulane.edu

acase@tulane.edu

acase@tulane.edu

acase@tulane.edu

acase@tulane.edu