A Model of Competing Narratives
American Economic Review
vol. 110,
no. 12, December 2020
(pp. 3786-3816)
Abstract
We formalize the argument that political disagreements can be traced to a "clash of narratives." Drawing on the "Bayesian Networks" literature, we represent a narrative by a causal model that maps actions into consequences, weaving a selection of other random variables into the story. Narratives generate beliefs by interpreting long-run correlations between these variables. An equilibrium is defined as a probability distribution over narrative-policy pairs that maximize a representative agent's anticipatory utility, capturing the idea that people are drawn to hopeful narratives. Our equilibrium analysis sheds light on the structure of prevailing narratives, the variables they involve, the policies they sustain, and their contribution to political polarization.Citation
Eliaz, Kfir, and Ran Spiegler. 2020. "A Model of Competing Narratives." American Economic Review, 110 (12): 3786-3816. DOI: 10.1257/aer.20191099Additional Materials
JEL Classification
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- D85 Network Formation and Analysis: Theory
- F52 National Security; Economic Nationalism