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Policy Reversals and Electoral Competition with Privately Informed Parties

  • Martinelli, Cesar
  • Matsui, Akihiko

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. Copyright 2002 by Blackwell Publishing Inc.

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Article provided by Association for Public Economic Theory in its journal Journal of Public Economic Theory.

Volume (Year): 4 (2002)
Issue (Month): 1 ()
Pages: 39-61

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Handle: RePEc:bla:jpbect:v:4:y:2002:i:1:p:39-61
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  1. Gibbons, Robert, 1988. "Learning in Equilibrium Models of Arbitration," American Economic Review, American Economic Association, vol. 78(5), pages 896-912, December.
  2. Timothy Feddersen & Wolfgang Pesendorfer, 1994. "Voting Behavior and Information Aggregation in Elections with Private Information," Discussion Papers 1117, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  3. Roger B. Myerson, 1994. "Extended Poisson Games and the Condorcet Jury Theorem," Discussion Papers 1103, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  4. Kyle Bagwell & Garey Ramey, 1991. "Oligopoly Limit Pricing," RAND Journal of Economics, The RAND Corporation, vol. 22(2), pages 155-172, Summer.
  5. Cukierman, A. & Tommasi, M., 1997. "When does it take a Nixon to go to China?," Discussion Paper 1997-91, Tilburg University, Center for Economic Research.
  6. Harrington, Joseph E, Jr, 1993. "Economic Policy, Economic Performance, and Elections," American Economic Review, American Economic Association, vol. 83(1), pages 27-42, March.
  7. Schultz, Christian, 1996. "Polarization and Inefficient Policies," Review of Economic Studies, Wiley Blackwell, vol. 63(2), pages 331-44, April.
  8. Rodrik, Dani, 1993. "The Positive Economics of Policy Reform," American Economic Review, American Economic Association, vol. 83(2), pages 356-61, May.
  9. Banks, Jeffrey S., 1990. "A model of electoral competition with incomplete information," Journal of Economic Theory, Elsevier, vol. 50(2), pages 309-325, April.
  10. Roemer, J.E., 1992. "The Emergence of Party Ideology when Voter Are Uncertain about How the Economy Works," Papers 396, California Davis - Institute of Governmental Affairs.
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