1. Principal-Agent Theory (we live in a representative democracy) 1, 11, 14, 12delegationtransaction costs/ conformity costsagency lossAccountability (how do we hold our elected representatives accountable?)We delegate that authority to elected representatives and we have to keep them accountable. We have institutions to keep them accountable (reduce the transaction costs).InstitutionsSelect, monitor, and sanction (reward/punish) these folks.^(elections11)^(media14)^(carrots and sticks7 or parties12)Pros/ConsElectionsParty labels allow people to make cognitive shortcutsNegativityHow have we characterized peopleLack of knowledgeMany people that don’t vote. It’s better for the nation when more people participate because we are “one body” and we are doing something together.MediaWe get a lot of information but it is tainted by different networks. Bias of the media (-)Information is put into words that people can understand so more people are informed (+). A greater % of population has access to information now.Media drives policyPartiesGood for organization. Party labels and cognitive shortcuts. Because of parties you don’t have to spend a lot of time researching different issues or candidates because you closely affiliate with preferences of the candidate and party.(+)Creating polarization (-)We have all or none/winner take all system with delegates (-).2. Political Parties 1,11,12Party in the ElectorateParty OrganizationParty in GovernmentMultiple RolesConducting Government Business (lower transaction costs)PARTY IN THE GOVERNMENT. (shaping policy)Committee system. Selecting chairs by controlling party^decreases transaction costs but increases conformity costs.Elections (lower transaction costs)PARTY IN THE ELECTORATE.^decreases transaction costsSelecting Representatives (lower transaction costs)PARTY ORGANIZATION^decreases transaction costsHowHow do these increase and decrease transaction costs?Final Exam 04/29/20131. Principal-Agent Theory (we live in a representative democracy) 1,11, 14, 12-delegation-transaction costs/ conformity costs-agency lossAccountability (how do we hold our elected representatives accountable?)-We delegate that authority to elected representatives and we have to keep them accountable. We have institutions to keep them accountable (reduce the transaction costs).Institutions-Select, monitor, and sanction (reward/punish) these folks.-^(elections11)^(media14)^(carrots and sticks7 or parties12)Pros/Cons-Elections-Party labels allow people to make cognitive shortcuts-Negativity-How have we characterized people -Lack of knowledge -Many people that don’t vote. It’s better for the nation when more people participate because we are “one body” and we are doing something together.-Media-We get a lot of information but it is tainted by different networks. Bias of the media (-)-Information is put into words that people can understand so more people are informed (+). A greater % of population has access to information now.-Media drives policy -Parties -Good for organization. Party labels and cognitive shortcuts. Becauseof parties you don’t have to spend a lot of time researching differentissues or candidates because you closely affiliate with preferences of the candidate and party.(+)-Creating polarization (-)-We have all or none/winner take all system with delegates (-).2. Political Parties 1,11,12Party in the ElectorateParty OrganizationParty in GovernmentMultiple Roles-Conducting Government Business (lower transaction costs)oPARTY IN THE GOVERNMENT. (shaping policy)oCommittee system. Selecting chairs by controlling partyo^decreases transaction costs but increases conformity costs.-Elections (lower transaction costs)oPARTY IN THE ELECTORATE. o^decreases transaction costs-Selecting Representatives (lower transaction costs)oPARTY ORGANIZATIONo^decreases transaction costsHow-How do these increase and decrease transaction
View Full Document
Unlocking...