ICES Experimental Economics Brown Bag Lecture
When Outsider Rhetoric Goes Mainstream: Political Competition and the Credibility Trap
Thursday, October 22, 2026 12:00 PM to 1:00 PM EDT
Vernon Smith Hall (formerly Metropolitan Building), Room 5075
The Interdisciplinary Center for Economic Science (ICES) presents an ICES Brown Bag Lecture featuring:
New York University
When Outsider Rhetoric Goes Mainstream: Political Competition and the Credibility Trap
Abstract
We develop a theory of institutional trust erosion in which anti-establishment rhetoric serves as a signaling device in political competition. Politicians differ in their willingness to sacrifice establishment relationships and use anti-establishment attacks to signal this privately known type. As institutional trust declines, voters place greater value on perceived independence from the establishment. Outsiders initially separate by escalating their rhetoric, but once distrust becomes sufficiently severe, insiders imitate and anti-establishment rhetoric becomes mainstream.
Mainstreaming increases the supply of anti-establishment rhetoric while diluting its informational content. Embedding this signaling equilibrium in a dynamic model of institutional trust, we show how rhetoric and distrust can reinforce one another, generating hysteresis and persistent low-trust equilibria. The model identifies when temporary trust shocks produce lasting credibility crises and when institutional reforms can restore trust.
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