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Policy Reversals and Electoral Competition with Privately Informed Parties

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  • César Martinelli
  • Akihiko Matsui

Abstract

We develop a spatial model of competition between two policy‐motivated parties. The parties know which policies are desirable for voters, while voters do not. The announced positions of the parties serve as signals to the voters concerning the parties’ private information. In all separating equilibria, when the left‐wing party attains power, the policies it implements are to the right of the policies implemented by the right‐wing party when it attains power. Intuitively, when right‐wing policies become more attractive, the left party moves toward the right in order to be assured of winning, while the right‐wing party stays put in a radical stance.

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  • César Martinelli & Akihiko Matsui, 2002. "Policy Reversals and Electoral Competition with Privately Informed Parties," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(1), pages 39-61, January.
    • Handle: RePEc:bla:jpbect:v:4:y:2002:i:1:p:39-61
    DOI: 10.1111/1467-9779.00087
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    2. Müller, Wieland & Spiegel, Yossi & Yehezkel, Yaron, 2009. "Oligopoly limit-pricing in the lab," Games and Economic Behavior, Elsevier, vol. 66(1), pages 373-393, May.
    3. Archishman Chakraborty & Parikshit Ghosh & Jaideep Roy, 2020. "Expert-Captured Democracies," American Economic Review, American Economic Association, vol. 110(6), pages 1713-1751, June.
    4. Bernhardt, Dan & Duggan, John & Squintani, Francesco, 2007. "Electoral competition with privately-informed candidates," Games and Economic Behavior, Elsevier, vol. 58(1), pages 1-29, January.
    5. Amal Sanyal & Kunal Sengupta, 2005. "Reputation, Cheap Talk and Delegation," Game Theory and Information 0501001, University Library of Munich, Germany.
    6. Hillary Ekisa Nambanga & Jianpei Li, 2021. "Threat of Entry, Complete Information and Pricing," International Journal of Science and Business, IJSAB International, vol. 5(5), pages 161-182.
    7. Kunal Sengupta & Amal Sanyal, 2004. "Delegation in a Cheap-Talk Game: A Voting Example," Econometric Society 2004 Far Eastern Meetings 471, Econometric Society.
    8. Hillary Ekisa Nambanga, 2020. "Limit Pricing under Complete Information: A Theoretical Analysis of Mobile network Operators," International Journal of Science and Business, IJSAB International, vol. 4(12), pages 115-122.

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