Paolo Roberti | Free University of Bozen
A remedy to demand for bad policies
Wednesday, November 12, 2025 h. 13:00-14:00
Sala del Consiglio
Abstract: This paper examines why voters often support inefficient or “bad” policies and proposes a mechanism to counteract this tendency. We present a theoretical model in which equilibrium underappreciation bias leads inertial voters to favor a status quo Prisoner’s Dilemma even when a Pareto superior alternative exists. The paper introduces a Priority Policy that, off the equilibrium path, rewards cooperative behavior and penalizes defection, thereby realigning incentives for biased voters. In a controlled laboratory experiment where participants choose between continuing with the bad policy and switching to the Priority Policy Game, a sizable share still favors the inefficient option; nonetheless, the Priority Policy reduces its support by 14 percentage points and raises joint earnings. The study contributes to political economy by clarifying the demand for bad policies and demonstrating how carefully designed interventions can improve collective outcomes..

