Trading and Voting

Posted: 10 Sep 2003

See all articles by David K. Musto

David K. Musto

University of Pennsylvania - Finance Department

Bilge Yilmaz

University of Pennsylvania - Finance Department

Multiple version iconThere are 2 versions of this paper

Abstract

Complete financial markets transform the political choice between candidates with different redistribution policies. If redistribution policies do not affect aggregate wealth, then financial trade implies that wealth considerations have no effect on voting and so do not affect who wins. However, an election in which one candidate would redistribute results in redistribution, and redistribution is the same whether or not he wins. Furthermore, he proposes, and if elected carries out, more redistribution than he prefers. If redistribution policies do affect aggregate wealth, then everybody expects more wealth if the candidate with the higher aggregate-wealth policy wins.

Suggested Citation

Musto, David K. and Yilmaz, Bilge, Trading and Voting. Available at SSRN: https://ssrn.com/abstract=441961

David K. Musto (Contact Author)

University of Pennsylvania - Finance Department ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104
United States

Bilge Yilmaz

University of Pennsylvania - Finance Department ( email )

The Wharton School
3620 Locust Walk
Philadelphia, PA 19104
United States
215-898-1163 (Phone)
215-898-6200 (Fax)

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