a model of candidate location with endogenous valence this work gives a theoretical explanation for the increase in campaign spending and party polarization in u s politics i assume that the effectiveness of persuasive advertising and of costly valence campaigning in general positively depends on the share of nonpartisan voters a decline in the number of partisan voters in a constituency results in greater campaign spending by the candidates if the voters are risk averse the candidates who maximize their expected office rents minus the cost of campaigning will choose divergent policy platforms strategically in order to reduce the costs of subsequent campaign spending the degree of policy divergence positively depends on the share of nonpartisan voters for a broad class of voter disutility and candidate cost of valence functions

electoral competition with privately informed candidates we consider a model of elections in which two office motivated candidates receive private signals about the location of the median voter s ideal point prior to taking policy positions we show that at most one pure strategy equilibrium exists and provide a sharp characterization if one exists after receiving a signal each candidate locates at the median of the distribution of the median voter s location conditional on the other candidate receiving the same signal it follows that a candidate s position conditional on his her signal is a biased estimate of the true median with candidate positions tending to the extremes of the policy space we provide sufficient conditions for the existence of a pure strategy equilibrium essentially the pure strategy equilibrium exists if for each signal the other candidate is sufficiently likely to receive a signal in the same direction that is at least as extreme though the electoral game exhibits discontinuous payoffs for the candidates we prove that mixed strategy equilibria exist generally that equilibrium expected payoffs are continuous in the parameters of the model and that mixed strategy equilibria are upper hemicontinuous we investigate the robustness of the median voter theorem to private information pure strategy equilibria may fail to exist in models close to the downsian model but mixed strategy equilibria must and they will be close to the downsian equilibrium finally we provide bounds on the support of mixed strategy equilibria and restrictions on possible atoms of equilibrium mixed strategies

strategic extremism why republicans and democrats divide on religious values party platforms differ sharply from one another especially on issues with religious content such as abortion or gay marriage given the high return to attracting the median voter why do vote maximizing politicians take extreme positions in this paper we find that strategic extremism depends on an intensive margin where politicians want to induce their core constituents to vote or make donations and the ability to target political messages toward those core constituents our model predicts that the political relevance of religious issues is highest when around one half of the voting population attends church regularly using data from across the world and within the united states we indeed find a nonmonotonic relationship between religious extremism and religious attendance

collusion in multiproduct oligopoly games under a finite horizon applying recent results on finitely repeated games to oligopoly theory the author finds that there exists a class of finite horizon output games in which collusion can be achieved as a subgame perfect equilibrium trigger strategies prevent defection from the cooperative outcome by credibly threatening that the defector will be forced to exit the industry for the case of a multiproduct oligopoly it is shown that collusion in one market can be enforced by the threat of punishment in a second market if someone defects even though the two markets are structurally independent the firms make them strategically interdependent through their strategies copyright 1987 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

political motivations and electoral competition equilibrium analysis and experimental evidence we study both theoretically and experimentally the complete set of nash equilibria of a classical one dimensional majority rule election game with two candidates who might be interested in power as well as in ideology but not necessarily in the same way apart from obtaining the well known median voter result and the two sided policy differentiation outcome the paper uncovers the existence of two new equilibrium configurations called one sided and probabilistic policy differentiation respectively our analysis shows how these equilibrium configurations depend on the relative interests in power resp ideology and the uncertainty about voters preferences the theoretical predictions are supported by the data collected from a series of laboratory experiments as we observe convergence to the nash equilibrium values at the aggregate as well as the individual levels in all treatments and the comparative statics effects across treatments are as predicted by the theory

partisan politics and election failure with ignorant voters abstract we analyze candidate competition when some voters do not observe a candidate s policy choice voters have a personality preference when both candidates offer the same policy in equilibrium the candidate with a personality advantage may get elected with a partisan policy even though his opponent s policy is preferred by all voters the departure from the downsian prediction is most pronounced when candidates have a weak policy preference and care mostly about winning the election in that case uninformed voters choose the candidate with the preferred personality even if electing this candidate implies a lower payoff on average

spatial equilibrium with entry this paper examines spatial equilibrium in political competition when established parties choose their platforms competitively while rationally anticipating entry of a vote maximizing third party the resulting equilibrium is substantially different from the hotelling median equilibrium established parties are spatially separated and third parties will generally lose the election this provides one theoretical explanation for the stability of two party systems namely that non cooperative behavior between established parties can effectively prevent third parties from winning

collusion in finitely repeated oligopolies abstract explaining collusion in infinitely repeated oligopolies is problematic because of the backward induction argument the usual response to this has been to consider infinitely repeated games and treat these as approximations of long finite repetitions or to introduce a modicum of irrationality in firm decision making the present paper explores a third avenue which introduces some extensive form structure to the cournot game itself hence the supergame constructed in this paper is one in which the stage game is itself an extensive form game in particular the stage game is a cournot oligopoly in which firms can observe each others initial production and respond by producing more before the product is sold on the market with this structure it is possible to devise a discriminating trigger strategy which generates collusive behaviour among fully rational firms with finite lives

valence politics and equilibrium in spatial election models spatial models of two party or two candidatecompetition almost never have pure strategy nashequilibria when the issue space has more than onedimension this paper shows that the introduction ofvalence issues can create conditions where equilibriaexist even in a multidimensional setting we derivesufficient conditions for the existence of equilibria and characterize the spatial locations of twocompeting parties or candidates when such equilibriaexist the party with the advantage on the valencedimension will generally take a moderate position onthe positional issues we consider the implications ofthese results for public perceptions of the parties incumbency advantages and realigning elections

candidate quality in a downsian model with a continuous policy space abstract this paper characterizes a unique mixed strategy nash equilibrium in a one dimensional downsian model of two candidate elections with a continuous policy space where candidates are office motivated and one candidate enjoys a non policy advantage over the other candidate we show that if voters utility functions are concave and the median voter ideal point is drawn from a unimodal distribution there is a mixed strategy nash equilibrium where the advantaged candidate chooses the ideal point of the expected median voter with probability one and the disadvantaged candidate uses a mixed strategy that is symmetric around it existence conditions require the variance of the distribution to be small enough relative to the size of the advantage

equilibria in campaign spending games theory and data we present a formal game theoretic model to explain the simultaneity problem that makes it difficult to obtain unbiased estimates of the effects of both incumbent and challenger spending in u s house elections the model predicts a particular form of correlation between the expected closeness of the race and the level of spending by both candidates which implies that the simultaneity problem should not be present in close races and should be progressively more severe in the range of safe races that are empirically observed this is confirmed by comparing simple ols regression of races that are expected to be close with races that are not using house incumbent races spanning two decades

perfect nash equilibria in finite repeated game and uniqueness of nash equilibrium in the constituent game abstract it is shown that when the nash equilibrium of a particular game is unique then in a perfect nash equilibrium of the finite repetition of this game the set of actions in each of the successive plays of the game must be a nash equilibrium of the constituent game the uniqueness of the nash equilibrium in the constituent game is crucial for this implication except in the last play of the repetition

incumbency advantage and political campaign spending limits abstract this paper presents a model which captures the three main arguments for and against campaign spending limits campaign spending limits are purported to restrict the incumbent s ability to exploit his fundraising advantage in contrast to conventional wisdom a ceiling increases the incumbent s probability of victory regardless of the candidates relative fundraising abilities as long as the challenger is not more effective in campaign spending if the challenger is more effective in campaign spending ceilings have a non monotonic effect when the incumbent enjoys a mild initial voter disposition advantage a moderate ceiling decreases the incumbent s probability of victory but further restricting the limit favors the incumbent irrespective of incumbency status the marginal benefit to quality decreases with a more restrictive cap in an open seat contest a more restrictive limit improves the electoral prospects of the superior quality candidate stricter ceilings may lead to the unintended consequence of increased expected spending

imperfectly informed voters and strategic extremism we analyze a two candidate downsian model considering that voters use shortcuts e g interest group media endorsements to infer candidates policy platforms that is voters do not observe candidates exact platforms but only which candidate offers the more leftist rightist platform relative positions in equilibrium candidates behavior tends to maximum extremism but it may converge or diverge depending on how voters behave when indifferent policywise between the candidates when the tie breaking rule used by the voters is sufficiently fair candidates converge to the extreme preferred by the median voter but when it strongly favors a certain candidate each candidate specializes in a different extreme

elections with limited information a fulfilled expectations model using contemporaneous poll and endorsement data as information sources a one dimensional model of two candidate elections under asymmetric information is theoretically developed and experimentally tested candidates do not know voter utility functions and most voters are uninformed about candidate policy positions a fulfilled expectations equilibrium is defined using poll and endorsement data as information sources it is proved that with any positive fraction of informed voters any equilibrium extracts all available information all participants voters and candidates alike act as if they were fully informed for fixed candidate strategies a dynamic is given for convergence to voter equilibrium and this process is shown to imply a bandwagon effect

private polling in elections and voter welfare we study elections in which two candidates poll voters about their preferred policies before taking policy positions in the essentially unique equilibrium candidates who receive moderate signals adopt more extreme platforms than their information suggests but candidates with more extreme signals may moderate their platforms policy convergence does not maximize voters welfare although candidates platforms diverge in equilibrium they do not do so as much as voters would like we find that the electorate always prefers less correlation in candidate signals and thus private over public polling some noise in the polling technology raises voters welfare

new estimates of climate demand evidence from location choice abstract we develop and apply to census data a new method for estimating climate demand the method is useful for ranking quality of life based upon a willingness to pay criterion our two major findings are that the willingness to pay quality of life index is correlated with the hedonic approach s ranking but that the migration approach generates much larger estimates of willingness to pay for a more moderate climate this finding is relevant for evaluating the economic impact of global warming

competence and ideology we develop a dynamic repeated election model in which citizen candidates are distinguished by both their ideology and valence voters observe an incumbent s valence and policy choices but only know the challenger s party our model provides a rich set of novel results in contrast to existing predictions from static models we prove that dynamic considerations make higher valence incumbents more likely to compromise and win re election even though they compromise to more extreme policies consequently we find that the correlation between valence and extremist policies rises with office holder seniority this result may help explain previous empirical findings despite this result we establish that the whole electorate gains from improvements in the distribution of valences in contrast fixing average valence the greater dispersion in valence associated with a high valence political elite always benefits the median voter but can harm a majority of voters when voters are sufficiently risk averse we then consider interest groups igs or activists who search for candidates with better skills we derive a complete theoretical explanation for the intuitive conjectures that policies are more extreme when igs and activists have more extreme ideologies and that such extremism reduces the welfare of all voters

multiproduct activity in an experimental differentiated oligopoly in a symmetric differentiated experimental oligopoly with multiproduct firms we test the predictive power of the corresponding bertrand nash equilibria subjects are not informed on the specification of the underlying demand model in the presence of intense multiproduct activity and provided that a parallel pricing rule is imposed to multiproduct firms strategies tend to confirm the non cooperative multiproduct solution

collusion and predation under almost free entry abstract this study investigates the degree of cooperation that firms can support in the absence of significant barriers to entry a free entry subgame perfect equilibrium is defined by q n where q is the collusive output rate and n is the number of active firms such that there is no incentive for an active firm to deviate output from q and there is no incentive for a potential entrant to enter the industry it is shown that for all n 1 if the discount factor is sufficiently high there exists a free entry equilibrium in which active firms sustain a non trivial degree of cooperation cooperation is supported by active firms credibly threatening to respond to entry with a period of aggressive competition

cooperative equilibria in finite horizon noncooperative supergames abstract it is well known that cooperative outcomes can be supported by noncooperative equilibrium strategy combinations in games that are infinitely repeated however the example of the repeated prisoner s dilemma has led people to conclude that such cooperative outcomes cannot be sustained if the game is repeated finitely often in this paper it is proved that the belief about finitely repeated games is false conditions are given that allow the existence of cooperative outcomes in finitely repeated games that are supported by subgame perfect noncooperative equilibrium strategies

leniency programs for multimarket firms the effect of amnesty plus on cartel formation we examine the effect of amnesty plus on dynamic cartel formation in a multimarket setting the amnesty plus program has been adopted as part of the us corporate leniency policy in 1999 and is now vigorously advertised as one of the most compelling tools in generating successful cartel investigations amnesty plus is aimed at attracting amnesty applications by encouraging firms convicted in one market to report their collusive agreements in other markets we show that amnesty plus has two opposite effects on firms ability and incentives to collude which are both increasing in the fine reduction granted first amnesty plus can reduce the deterrence of cartel activities by making it easier for firms to sustain multimarket collusion through strategies involving self reporting after a first cartel detection second it can reduce the expected duration of cartels or delay their formation by increasing firms incentives to self report after a first cartel detection

multimarket contact and collusive behavior traditional analyses of industrial behavior typically link the exercise of market power in an industry to internalfeatures such as demand conditions concentration and barriers to entry nevertheless some economists have remained concerned that external factors such as contact across markets may also play a significant role in determining the level of competitiveness in any particular industry in this article we examine the effect of multimarket contact on the degree of cooperation that firms can sustain in settings of repeated competition we isolate conditions under which multimarket contact facilitates collusion and show that these collusive gains are achieved through modes of behavior that have been identified in previous empirical studies of multimarketfirms

elections with platform and valence competition abstract we study a game in which candidates first choose platforms and then invest in costly valences e g engage in campaign spending the marginal return to valence depends on platform polarization the closer platforms are the more valence affects the election outcome consequently candidates without policy preferences choose divergent platforms to soften valence competition moreover exogenous increases in incentives for valence accumulation lead to both increased valence and increased polarization the latter because candidates seek to avoid the costs of extra valence as a result the increase in valence is smaller than it would have been with exogenous platforms finally the model highlights the overlooked substantive importance of common modeling assumptions changing the source of uncertainty in our model from noise around the median voter s ideal point to a shock to one candidate s valence as is common in the literature leads to complete platform convergence for all parameter values

a model of candidate location when one candidate has a valence advantage that under some fairly weak assumptions for all levels of the valence advantage the advantaged candidate chooses a more moderate position than the disadvantaged candidate empirical studies of congressional elections by fiorina 1973 and ansolabehere snyder and stewart 2001 support this result d owns 1957 seminal work presents a puzzle for scholars of u s elections why do candidates not converge to the median voter one of the best explanations is that the candidates themselves have ideological preferences as calvert 1985 and wittman 1977 1983 have shown when candidates have such preferences and they are sufficiently uncertain about the preferences of the median voter then they do not converge although they may moderate their positions from their ideal point the basic version of the calvert wittman model however does not account for another basic fact of u s elections often one of the candidates has an advantage due to a nonpolicy factor such as incumbency greater campaign funds better name recognition superior charisma superior intelligence and so on stokes has dubbed such factors valence factors and he has noted their importance in u s elections stokes 1963 1992 1 in this article i extend the basic calvert wittman model by giving one candidate a valence advantage over the other i show that if the valence characteristics of the candidates are approximately equal then when a candidate s valence advantage increases this causes her to move toward the

the political legislation cycle the economic theory of legislation holds that laws even when they do not involve financial resources redistribute property rights politicians supply legislation to groups with the highest political return by the same logic politicians should supply legislation when doing so has the highest political return the dynamics of the supply of legislation should follow the pattern suggested by the political business cycle theory we develop a model of government s and voters behavior where a legislation cycle is the strategy to hold the government coalition together under certain assumptions the model predicts that the approbation of laws should be concentrated at the end of the legislature and be positively related to the fragmentation of the government coalition we test these restrictions on data about the supply of legislation by the italian parliament during legislatures from i to xiii 1948 to 2001 the empirical analysis provides strong support to the theory a legislation cycle occurs when the conditioning phenomena that the model indicates are satisfied

candidate valence evidence from consecutive presidential elections this article develops and estimates a dynamic spatial model of voting the distribution of voters policy positions and candidates valence are recovered using individual level data on voting decisions in two consecutive presidential elections the estimated model is used to provide an equilibrium interpretation of observed individual voting profiles and aggregate electoral outcomes as well as to conduct counterfactual experiments that assess the impact of candidates policy positions valence and voters information on electoral outcomes

collusive equilibria in oligopolies with finite lives abstract it is generally accepted that collusive agreements cannot be sustained in oligopolies with finite lives in this paper it is shown that provided the number of competitors is neither too small nor too large the most restrictive output i e the monopoly output can be sustained as a perfect nash equilibrium if the number of firms is too small only sequences of the nash equilibria of the constituent market game can appear as perfect nash equilibria if the number of firms is too large the power of the cartel falls sharply

candidate entry and political polarization an antimedian voter theorem we study a citizen candidate entry model with private information about ideal points we fully characterize the unique symmetric equilibrium of the entry game and show that only relatively extreme citizen types enter the electoral competition as candidates whereas more moderate types never enter it generally leads to substantial political polarization even when the electorate is not polarized and citizens understand that they vote for more extreme candidates we show that polarization increases in the costs of entry and decreases in the benefits from holding office moreover when the number of citizens goes to infinity only the very most extreme citizens with ideal points at the boundary of the policy space become candidates finally our polarization result is robust to changes in the implementation of a default policy if no citizen runs for office and to introducing directional information about candidates types that is revealed via parties

demons and repentance abstract this paper presents a new explanation for the stability of cartels for a large class of repeated cournot duopoly games with discounting strategies are constructed which have the property that cheating on the cartel is followed by repentance it is shown than these repentance strategies are subgame perfect equilibrium strategies and that in the presence of demons infrequently irrational behavior on the part of both players they lead to pareto superior expected discounted payoffs in comparison with either friedman s trigger strategies or abreu s stick and carrot strategies

the mean voter theorem necessary and sufficient conditions for convergent equilibrium formal models of elections have emphasized the convergence of party leaders towards the centre of the electoral distribution this paper attempts to resolve the apparent disparity between the formal result and the perception of political divergence by considering a model incorporating valence valence can be interpreted as the non policy basis of political judgement made by the electorate concerning the quality of political contenders the theorem presented here shows that there is a necessary condition for convergence the condition involves the difference in party valences and the electoral variance when the condition fails the low valence parties will be forced to adopt policy positions far from the electoral centre the inference appears to be substantiated by an empirical model of the israel election in 1996 copyright 2007 wiley blackwell

unidimensional downsian politics median utilitarian or what else abstract in this note we show that in the probabilistic version of the standard unidimensional downsian model with two candidates maximizing their expected pluralities there do not exist nash equilibria in pure strategies whenever the probabilistic component is arbitrarily small but not degenerate we argue that empirical research on electoral competition should pay more attention to the magnitude of partisanship in each group of voters since equilibrium predictions will be very sensitive to that specific electoral parameter

signaling character in electoral competition we study a one dimensional hotelling downs model of electoral competition with the following innovation a fraction of candidates have character and are exogenously committed to a campaign platform this is unobservable to voters character is desirable and a voter s utility is a convex combination of standard policy preferences and her assessment of a candidate s character this structure induces a signaling game between strategic candidates and voters since a policy platform affects voters utilities not only directly but also indirectly through inferences about a candidate s character the model generates a number of predictions starting with a failure of the median voter theorem jel d72 d82

policy platforms campaign spending and voter participation abstract we model electoral competition between two parties in a winner take all election parties choose strategically first their platforms and then their campaign spending under aggregate uncertainty about voters preferences we use the model to examine why campaign spending in the united states has increased at the same time that politics has become more polarized we find that a popular explanation more accurate targeting of campaign spending is not consistent while accurate targeting may lead to greater spending it also leads to less polarization we argue that a better explanation is that voters preferences have become more volatile from the point of view of parties at the moment of choosing policy positions this both raises campaign spending and increases polarization it is also consistent with the observation that voters have become less committed to the two parties

on the nature of equilibria in a downsian model with candidate valence abstract i analyze mixed strategy equilibria in a downsian model with two office motivated candidates in which one candidate is endowed with a sufficiently large valence advantage that a voter might prefer this candidate even if the voter strictly prefers the other candidate s policies there is a discrete one dimensional policy space and the preferences of the median voter are uncertain i show that there is a range of moderate policies with no gaps that are optimal for the advantaged candidate there is also a range of liberal policies with no gaps and a corresponding range of conservative policies with no gaps that are optimal actions for the disadvantaged candidate the upper and lower bounds on these ranges of policies vary in predictable ways with the size of the advantaged candidate s advantage

price discrimination or uniform pricing which colludes more abstract conventional wisdom attributes different economic outcomes of uniform pricing and price discrimination to the heterogeneity in market conditions or market participants such as differences in demand elasticity or production costs we offer a new explanation for the observed differences that relates to behavioral aspects rather than demand or supply side effects in particular in a symmetric bertrand duopoly laboratory experiment for which theory predicts no differences between the two pricing regimes we find that tacit price collusion is systematically higher under price discrimination than under uniform pricing

busy voters agenda control and the power of information t he correspondence between individual preferences and electoral outcomes is often affected by the existence of information asymmetries among electoral participants and the presence of individuals or groups who exercise some form of agenda control while the effects of agenda control in political decision making are widely recognized the effects of information asymmetries are not as well understood since information asymmetries are fundamental characteristics of most elections a deep understanding of the correspondence between individual preferences and electoral outcomes requires a serious consideration of the effects of information i develop a generalizable agenda control model that takes as given the observation that most voters are not naturally inclined to invest in political information the model allows me to provide a dynamic description of how voters and political elites can adapt to the information problems that characterize political decision making it also allows me to demonstrate the effect of these adaptations on electoral outcomes

candidate ability and platform choice abstract contrary to the median voter theorem candidates in real world elections do not always adopt moderate platforms using a modified hotelling model we show that low ability candidates may attempt to differentiate themselves from higher ability competitors by choosing less moderate platforms