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Publication date

2023-12-01

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cc-by-nc (c) Gersbach et al., 2023
Please use this identifier to cite or link to this item: https://hdl.handle.net/2445/213102

Electoral Competition with Costly Policy Changes: A Dynamic Perspective

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https://doi.org/10.1016/j.jet.2023.105716

Abstract

We analyze two-party electoral competition with a one-dimensional policy space, costly policy changes, and random negative shocks to a party's viability over an infinite horizon. We show the existence and uniqueness of stationary Markov perfect equilibria in which parties use so-called simple strategies. Regardless of the initial policy, party choices converge in the long run to a stochastic alternation between two policies, with transitions occurring if and only if parties suffer a negative shock to their viability. Although costs of change have a moderating effect on policies, full convergence to the median voter position does not take place when parties are polarized.

Subject

Partits polítics, Bipartidisme, Eleccions

Subject (English)

Political parties, Two-party systems, Elections

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Articles publicats en revistes (Matemàtica Econòmica, Financera i Actuarial)

Citation

GERSBACH, Hans, et al. Electoral Competition with Costly Policy Changes: A Dynamic Perspective. Journal of Economic Theory. 2023. Vol. 214. ISSN 0022-0531. [consulted: 9 of June of 2026]. Available at: https://hdl.handle.net/2445/213102

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