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Bandwagon, underdog, and political competition: The uni-dimensional case

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  • Woojin Lee

    () (University of Massachusetts Amherst)

Abstract

The present paper studies the Hotelling-Downs and Wittman-Roemer models of two-party competition when voter conformism is present and the policy space is uni-dimensional. We consider two types of voter conformism, bandwagon and underdog, and study their effects on the political equilibrium of the two models. Even if voter conformism is present, the Hotelling- Downs parties propose an identical policy at the equilibrium, which is equal to a strict Condorcet winner. Thus voter conformism, both bandwagon and underdog, has no effect on the Hotelling- Downs political equilibrium. In the Wittman-Roemer model, parties propose differentiated equilibrium policies, and the extent of such policy differentiation depends on the degree of voter conformism. In general, the stronger the bandwagon effect is, the more differentiated the equilibrium policies are. The opposite holds when the underdog effect is present; an increasing underdog effect mitigates the policy differentiation of the two parties, although the effect is not large. We also find multiple Wittman-Roemer equilibria when the bandwagon effect is sufficiently strong. JEL Categories: D3, D7, H2

Suggested Citation

  • Woojin Lee, 2008. "Bandwagon, underdog, and political competition: The uni-dimensional case," UMASS Amherst Economics Working Papers 2008-07, University of Massachusetts Amherst, Department of Economics, revised Apr 2008.
  • Handle: RePEc:ums:papers:2008-07
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    File URL: http://www.umass.edu/economics/publications/2008-07.pdf
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    References listed on IDEAS

    as
    1. Ignacio OrtuÓo-OrtÎn, 1997. "A spatial model of political competition and proportional representation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 14(3), pages 427-438.
    2. John E. Roemer, 1999. "The Democratic Political Economy of Progressive Income Taxation," Econometrica, Econometric Society, vol. 67(1), pages 1-20, January.
    3. Assar Lindbeck & Jörgen Weibull, 1987. "Balanced-budget redistribution as the outcome of political competition," Public Choice, Springer, vol. 52(3), pages 273-297, January.
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    5. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
    6. repec:cup:apsrev:v:87:y:1993:i:01:p:34-47_09 is not listed on IDEAS
    7. Bikhchandani, Sushil & Hirshleifer, David & Welch, Ivo, 1992. "A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 992-1026, October.
    8. Caplin, Andrew & Nalebuff, Barry, 1997. "Competition among Institutions," Journal of Economic Theory, Elsevier, vol. 72(2), pages 306-342, February.
    9. John E. Roemer, 1997. "Political-economic equilibrium when parties represent constituents: The unidimensional case," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 14(4), pages 479-502.
    10. Ignacio Ortuño Ortín & John E. Roemer, 2000. "Endogenous Party Formation And The Effect Of Income Distribution On Policy," Working Papers. Serie AD 2000-06, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
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    More about this item

    Keywords

    bandwagon effect; underdog effect; Hotelling-Downs model; Wittman- Roemer model;

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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