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Trading and VotingDavid K. MustoUniversity of Pennsylvania - Finance Department Bilge YilmazUniversity of Pennsylvania - Finance Department January 16, 2001 Rodney L. White Fin. Research Working Paper No. 22-00 Abstract: The political choice between candidates with different redistribution policies plays out very differently in a complete financial market. When voters have the opportunity to trade election-contingent securities, we find that 1) wealth considerations have no effect on voting, so the interaction between candidates' redistribution policies and the distribution of wealth has no effect on who wins, 2) an election in which a candidate promises wealth redistribution results in redistribution of wealth, and the redistribution is the same regardless of who wins, and 3) if one candidate prefers some amount of redistribution and the other does not, the candidate who prefers redistribution will propose more redistribution than the amount he prefers.
Number of Pages in PDF File: 15 Date posted: March 12, 2001Suggested CitationContact Information
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