An important empirical literature evaluates whether voters are rational by examining how electoral outcomes respond to events outside the control of politicians, such as natural disasters or economic shocks. The argument is that rational voters should not base electoral decisions on such events, so evidence that these events affect electoral outcomes is evidence of voter irrationality. We show that such events can affect electoral outcomes, even if voters are rational and have instrumental preferences. The reason is that these events change voters' opportunities to learn new information about incumbents. Thus, identifying voter (ir)rationality requires more than just identifying the impact of exogenous shocks on electoral fortunes. Our analysis highlights systematic ways in which electoral fortunes are expected to change in response to events outside incumbents' control. Such results can inform empirical work attempting to identify voter (ir)rationality. theoretical literature assumes voter rationality and claims to provide insight into a variety of political phenomena. 1 If actual voter behavior dramatically diverges from the assumptions in those models, then there is reason to be skeptical about that research agenda. An important empirical literature attempts to assess whether voters are indeed rational, examining the response of electoral outcomes to exogenous shocks outside the control of politicians. 2 The idea is that, with rational voters, these shocks should not affect incumbents' electoral fortunes. Although several studies find that incumbent electoral fortunes are unaffected by exogenous

Battigalli and Siniscalchi (2002) formalize the idea of forward induction reasoning as “rationality and common strong belief of rationality” (RCSBR). Here we study the behavioral implications of RCSBR across all type structures. Formally, we show that RCSBR is characterized by a solution concept we call extensive form best response sets (EFBRS's). It turns out that the EFBRS concept is equivalent to a concept already proposed in the literature, namely directed rationalizability (Battigalli and Siniscalchi 2003). We conclude by applying the EFBRS concept to games of interest.

Suppose that each player in a game is rational, each player thinks the other players are rational, and so on. Also, suppose that rationality is taken to incorporate an admissibility requirement-that is, the avoidance of weakly dominated strategies. Which strategies can be played? We provide an epistemic framework in which to address this question. Specifically, we formulate conditions of rationality and mth-order assumption of rationality (RmAR) and rationality and common assumption of rationality (RCAR). We show that (i) RCAR is characterized by a solution concept we call a "self-admissible set"; (ii) in a "complete" type structure, RmAR is characterized by the set of strategies that survive m + 1 rounds of elimination of inadmissible strategies; (iii) under certain conditions, RCAR is impossible in a complete structure.

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Elections are thought to improve voter welfare through two channels: effective accountability (i.e., providing incentives for politicians to take costly effort) and electoral selection (i.e., retaining politicians with characteristics voters value). We show that there may be a trade-off between these two channels. Higher levels of effective accountability may hinder the voters' ability to learn about the politicians. In turn, this may hinder electoral selection and be detrimental to voter welfare. This is because increasing effective accountability directly impacts how informative governance outcomes are about an incumbent's type. We show that, if politicians' effort and type are local substitutes (resp. complements) in the production of governance outcomes, an increase in effective accountability corresponds to a decrease (resp. increase) in Blackwell (1951) informativeness. We also show that effective accountability can vary even absent institutional variation. In particular, we provide necessary and sufficient conditions for there to be multiple equilibria that differ in terms of both effective accountability and electoral selection. Overall, our findings have implications for voter behavior, the efficacy of institutional reforms, and voter welfare. (JEL D72, D83)