Weekly Seminar – May 2: Salvatore Nunnari (Bocconi University), “Cognitive Skills and the Demand for Bad Policy”

Date: May 2nd, 2024 (12:30 pm – 1:30 pm)

Speaker:  Salvatore Nunnari

Paper Title: “Cognitive Skills and the Demand for Bad Policy” with Eugenio Proto (University of Glasgow) and Aldo Rustichini (University of Minnesota)

Abstract: Theories of voting behavior are based on the assumption that citizens accurately assess the comparative advantages of the available policy options. However, many policies produce outcomes through indirect or equilibrium effects, such as lifting price controls, expanding or constructing roads, implementing Pigouvian taxes, and monetizing fiscal deficits. The average citizen might not fully appreciate these equilibrium effects, leading to misjudgments about the efficacy of certain policies. Recent research by Dal Bo, Dal Bo, and Eyster (2018) demonstrates that individuals often vote against policies that, despite imposing direct costs, would resolve social dilemmas and enhance overall welfare. This raises an important research question: How do cognitive abilities influence the formation of preferences over policies? Specifically, what is the underlying mechanism? Our study proposes a simple theoretical framework and an experimental approach to explore a potential pathway and shows that greater cognitive skills and more optimistic beliefs about the cognitive skills of other citizens lead to greater demand for good policies.

Bio:

Salvatore Nunnari is Associate Professor of Economics at Bocconi University and Research Fellow at CEPR and CESifo. He earned his Ph.D. from the California Institute of Technology and has previously served as Assistant Professor at UCSD and Columbia University. At Bocconi, he is also the Co-Director of the Bocconi Experimental Laboratory for the Social Sciences and the Director of the B.Sc. in Economic and Social Sciences. His research focuses on political economy, behavioral economics, experimental economics, and microeconomic theory, and it has been published in top general interest journals such as the American Economic Review, Management Science, the American Political Science Review, and the American Journal of Political Science. Nunnari recently received a European Research Council grant for a five-year project on the “Behavioral Foundations of Populism and Polarization” and is a member of the editorial board for PSRM, the Journal of the European Political Science Association.