() and Jörgen Weibull
Avinash Dixit: Princeton University, Postal: Department of Economics, Princeton University, Princeton, NJ 08544-1021
Jörgen Weibull: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden
Abstract: Failures of government policies often provoke opposite reactions from citizens; some call for a reversal of the policy while others favor its continuation in stronger form. We offer an explanation of such polarization, based on a natural bimodality of preferences in political and economic contexts, and consistent with Bayesian rationality.
17 pages, First version: August 22, 2006. Revised: April 19, 2007. Earlier revisions: April 12, 2007.
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