An Economic Theory of Learning From News

Abstract

In one of the early applications of economic theory to politics, Anthony Downs proposed that voters behaved rationally and based their voting decisions on self-interest.1 If Party A was likely to give them more of what they wanted than Party B, then they voted for A. What was unique in Downs' approach was that he recognized that it is not so easy to find out how much better a person might be if Party A won the day instead of Party B. Downs realized that the gathering of political information could be tedious; he recognized that the time and effort spent exploring the political arena could be spent on other things. Rather than reading the political columns in the newspaper or watching Sunday morning talk shows, people could put the effort into improving their economic situation directly, say, by taking a second job. Given the competing demands on citizens' time, Downs argued that it is only natural for individuals to try to obtain information with the least effort, or at the smallest cost.