| Abstract: |
We show that preferences-bias towards overprovision or underprovision can
explain the asymmetric location of electoral candidates with respect to the
median voter. We analyze the determinants of preferences off-the-peak and find
that: (i) The sign of the third derivative of the policy-induced utility
function indicates whether preferences are bias towards overprovision
(positive) or underprovision (negative). (ii) The analog of Kimball's
coefficient of prudence can be used to measure the asymmetry of preferences.
(iii) Consumers’risk aversion and government corruption (in the form of
decreasing e¤ectiveness producing public good) induce voters’ preferences to
be more intense towards underprovision. |