Premium
Hotelling–Downs Competition with Free Entry When Voters Have an Option to Contest
Author(s) -
DZIUBIŃSKI MARCIN
Publication year - 2013
Publication title -
journal of public economic theory
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.809
H-Index - 32
eISSN - 1467-9779
pISSN - 1097-3923
DOI - 10.1111/jpet.12034
Subject(s) - contest , candidacy , competition (biology) , economics , nash equilibrium , microeconomics , strategy , free riding , set (abstract data type) , mathematical economics , free entry , game theory , political science , law , politics , incentive , computer science , ecology , programming language , biology
Osborne shows that for almost all distributions of voters’ preferences, a pure strategy Nash equilibrium does not exist in the classical Hotelling–Downs model of electoral competition with free entry. We show that equilibrium is generically possible if in addition one allows voters an option to announce their candidacy to compete side‐by‐side with office‐seeking players. The model studied in this paper renders Osborne and the celebrated citizen‐candidate model à la Osborne and Slivinski as two extreme cases. We characterize the equilibrium set with two central questions: (i) can there be equilibria where only voters contest? and (ii) are equilibria with contesting office‐seeking players possible? We also show that in our general setting, extremists are typically voter‐candidates so that in every two‐party contest, office‐seeking politicians stay out of competition.