Downsian Model with Asymmetric Information: Possibility of Policy Divergence
AbstractThis paper presents a model of Downsian political competition in which voters are imperfectly informed about economic fundamentals. In this setting, partiesfchoices of platforms influence votersf behavior not only through votersf preferences over policies, but also through formation of their expectation on the unknown fundamentals. We show that there exist pure-strategy equilibria in this political game with asymmetric information at which the two partiesf policies diverge with positive probability. This result is in contrast with the well-known median voter theorem in the classical model of Downsian competition. We also study refinement of equilibria, and identify the perfect equilibria (Selten, 1975) and the strictly perfect equilibria (Okada, 1981). The Nash equilibria with the strongest asymmetry in the partiesf strategies are proved to be strictly perfect.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Institute of Economic Research, Hitotsubashi University in its series Global COE Hi-Stat Discussion Paper Series with number gd08-029.
Date of creation: Feb 2009
Date of revision:
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-02-22 (All new papers)
- NEP-CDM-2009-02-22 (Collective Decision-Making)
- NEP-POL-2009-02-22 (Positive Political Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John Duggan, 2003.
"Electoral Competition with Privately Informed Candidates,"
Theory workshop papers
505798000000000029, UCLA Department of Economics.
- 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.
- Banks, Jeffrey S., 1990. "A model of electoral competition with incomplete information," Journal of Economic Theory, Elsevier, vol. 50(2), pages 309-325, April.
- Navin Kartik & R. Preston McAfee, 2007. "Signaling Character in Electoral Competition," American Economic Review, American Economic Association, vol. 97(3), pages 852-870, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tatsuji Makino).
If references are entirely missing, you can add them using this form.