Policy Competition in Real-Time

Faruk Gul and Wolfgang Pesendorfer
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Faruk Gul: Princeton University
Wolfgang Pesendorfer: Princeton University

Working Papers from Princeton University. Economics Department.

Abstract: We formulate a dynamic model of party competition with a one-dimensional policy space. Policy choices at different times are linked because parties cannot change their policies abruptly, instead, policy adjustment happens gradually. Parties are uncertain of the median’s policy preferences at the time they choose their policies. Our results relate the steady state equilibrium of the dynamic game to parties’ beliefs about voter preferences. In particular, we show that for symmetric games, the steady-state outcome is the local equilibrium of the corresponding static Wittman game.

Keywords: Policy Competition; Party Competition; Policy (search for similar items in EconPapers)
JEL-codes: O29 (search for similar items in EconPapers)
Date: 2016-02
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Persistent link: https://EconPapers.repec.org/RePEc:pri:econom:2016-7

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