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  4. April 2015
  5. Correlation Neglect, Voting Behavior, and Information Aggregation

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Correlation Neglect, Voting Behavior, and Information Aggregation

  • Gilat Levy
  • Ronny Razin
American Economic Review
vol. 105, no. 4, April 2015
(pp. 1634–45)
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Abstract

In this paper we analyze elections when voters underestimate the correlation between their information sources ("correlation neglect"). We find that this cognitive bias can improve political outcomes. We show that the extreme beliefs which result from correlation neglect induce some voters to base their vote on information rather than on political preferences. We characterize conditions on the distribution of preferences under which this induces higher vote shares for the optimal policies and better information aggregation. (JEL D72, D83)

Citation

Levy, Gilat, and Ronny Razin. 2015. "Correlation Neglect, Voting Behavior, and Information Aggregation." American Economic Review 105 (4): 1634–45. DOI: 10.1257/aer.20140134

Additional Materials

JEL Classification

  • D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
  • D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness