Electoral competition with costly policy changes: A dynamic perspective

Hans Gersbach, Matthew Jackson, Philippe Muller and Oriol Tejada

Journal of Economic Theory, 2023, vol. 214, issue C

Abstract: We analyze two-party electoral competition with a one-dimensional policy space, costly policy changes, and random negative shocks to a party's viability over an infinite horizon. We show the existence and uniqueness of stationary Markov perfect equilibria in which parties use so-called simple strategies. Regardless of the initial policy, party choices converge in the long run to a stochastic alternation between two policies, with transitions occurring if and only if parties suffer a negative shock to their viability. Although costs of change have a moderating effect on policies, full convergence to the median voter position does not take place when parties are polarized.

Keywords: Elections; Costs of change; Political polarization; Markov perfect equilibrium (search for similar items in EconPapers)
JEL-codes: C72 C73 D72 D78 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Electoral Competition with Costly Policy Changes: A Dynamic Perspective (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:214:y:2023:i:c:s0022053123001126

DOI: 10.1016/j.jet.2023.105716

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