Peter Shum - Practice JMT
The Polarizing Effect of Monopsony
Date: 10/08/2024 (Tue)
Time: 11:30am- 1:00pm
Location: Seminar will be held on-site: SS113
Organizer: Ho Pan Shum
Meeting Schedule: (Not currently open for scheduling. Please contact the seminar organizer listed above.)
All meetings will be held in the same location as the seminar unless otherwise noted.
11:30am - Seminar Presentation (11:30am to 1:00pm)
Additional Comments: In contrast to the predictions of the Median Voter Theorem, polarization of politicians has been prevalent throughout political history, and even more so in recent times. I develop a model that connects lobbying incentives and the extreme platforms of politicians. The model explains how polarization, defined as more politicians choosing extreme platforms than centrist ones, may emerge from non-polarized primitives. The model is also applied to explain the suburbanization of the manufacturing industry by the rise of monopsony power. The two applications of the model differ in the decisions of the benefactors: the lobbyist has an exogenously determined political alignment, while the monopsonist endogenously decides the factory location after observing workers’ distribution.