Policy convergence in a two-candidate probabilistic voting model
We propose a generalization of the probabilistic voting model in two-candidate elections. We allow the candidates have general von Neumann–Morgenstern utility functions defined over the voting outcomes. We show that the candidates will choose identical policy positions only if the electoral competition game is constant-sum, such as when both candidates are probability-of-win maximizers or vote share maximizers, or for a small set of functions that for each voter define the probability of voting for each candidate, given candidate policy positions. At the same time, a pure-strategy local Nash equilibrium (in which the candidates do not necessarily choose identical positions) exists for a large set of such functions. Hence, if the candidate payoffs are unrestricted, the “mean voter theorem” for probabilistic voting models is shown to hold only for a small set of probability of vote functions.
We study stochastic voting models where the candidates are allowed to have any smooth, strictly increasing utility functions that translate vote shares into payoffs. We find that if a strict Nash equilibrium exists in a model with an infinite number of voters, then nearby equilibria should exist for similar large, but finite, electorates. If the votes are independent random events, then equilibria will not depend on the utility functions of the candidates. Our results have implications for existing models of redistributive politics and spatial competition, as the properties of pure-strategy equilibria in such games carry over to equilibria in games with arbitrary candidate preferences. On the other hand, candidate utility functions will matter if the individual voting decisions are correlated. In the presence of aggregate uncertainty, such as changing economic conditions or political scandals, the preferences of parties and candidates with respect to shares of votes will have an effect on political competition.
The paper examines the structure, governance, and balance sheets of state-controlled banks in Russia, which accounted for over 55 percent of the total assets in the country's banking system in early 2012. The author offers a credible estimate of the size of the country's state banking sector by including banks that are indirectly owned by public organizations. Contrary to some predictions based on the theoretical literature on economic transition, he explains the relatively high profitability and efficiency of Russian state-controlled banks by pointing to their competitive position in such functions as acquisition and disposal of assets on behalf of the government. Also suggested in the paper is a different way of looking at market concentration in Russia (by consolidating the market shares of core state-controlled banks), which produces a picture of a more concentrated market than officially reported. Lastly, one of the author's interesting conclusions is that China provides a better benchmark than the formerly centrally planned economies of Central and Eastern Europe by which to assess the viability of state ownership of banks in Russia and to evaluate the country's banking sector.
The paper examines the principles for the supervision of financial conglomerates proposed by BCBS in the consultative document published in December 2011. Moreover, the article proposes a number of suggestions worked out by the authors within the HSE research team.