Abstract

http://ssrn.com/abstract=932692
 
 

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Budget Processes: Theory and Experimental Evidence


Karl-Martin Ehrhart


University of Karlsruhe

Jürgen Von Hagen


University of Bonn - Institute of Economic Policy; Centre for Economic Policy Research (CEPR)

Claudia Keser


University of Goettingen (Gottingen)

Roy Gardner


Indiana University Bloomington - Department of Economics; Indiana University Purdue University Indianapolis (IUPUI) - Department of Economics

September 19, 2006

CAEPR Working Paper No. 2006-009

Abstract:     
This paper studies budget processes, both theoretically and experimentally. We compare the outcomes of bottom-up and top-down budget processes. It is often presumed that a top-down budget process leads to a smaller overall budget than a bottom-up budget process. Ferejohn and Krehbiel (1987) showed theoretically that this need not be the case. We test experimentally the theoretical predictions of their work. The evidence from these experiments lends strong support to their theory, both at the aggregate and the individual subject level.

Number of Pages in PDF File: 29

Keywords: budget processes, voting equilibrium, experimental economics

JEL Classification: H61, C92

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Date posted: September 26, 2006  

Suggested Citation

Ehrhart, Karl-Martin and von Hagen, Jürgen and Keser, Claudia and Gardner, Roy, Budget Processes: Theory and Experimental Evidence (September 19, 2006). CAEPR Working Paper No. 2006-009. Available at SSRN: http://ssrn.com/abstract=932692 or http://dx.doi.org/10.2139/ssrn.932692

Contact Information

Karl-Martin Ehrhart
University of Karlsruhe ( email )
Postbox
76128 Karlsruhe, DE 76128
Germany
Jürgen Von Hagen
University of Bonn - Institute of Economic Policy ( email )
Adenauerallee 24
D-53113 Bonn
Germany
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Claudia Keser
University of Goettingen (Gottingen) ( email )
Platz der Göttinger Sieben 3
Göttingen, 37073
Germany
Roy John Gardner (Contact Author)
Indiana University Bloomington - Department of Economics ( email )
Wylie Hall
Bloomington, IN 47405-6620
United States

Indiana University Purdue University Indianapolis (IUPUI) - Department of Economics ( email )
Bloomington, IN 47405
United States
812-855-6383 (Phone)
812-855-3736 (Fax)
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