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A Reputational Theory of Two-Party Competition

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  • Kalandrakis, Tasos

Abstract

I study a dynamic game of two-party competition in which party preferences are private information, exhibit serial correlation, and change with higher probability following defeat in elections. Assuming partisans care sufficiently about office, extreme policies are pursued with positive probability by the government when (a) both parties have a reputation for being extreme that exceeds a fixed level, and (b) elections are close in that both parties have similar reputations. Two qualitatively different equilibrium dynamics are possible depending on the speed with which the latent preferences of parties in government shift between moderation and extremism relative to the opposition. One dynamic produces regular government turnover and extreme policies along the path of play, whereas the other involves a strong incumbency advantage and moderate policies.

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  • Kalandrakis, Tasos, 2009. "A Reputational Theory of Two-Party Competition," Quarterly Journal of Political Science, now publishers, vol. 4(4), pages 343-378, December.
    • Handle: RePEc:now:jlqjps:100.00008047
    DOI: 10.1561/100.00008047
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    Cited by:

    1. Delgado-Vega, Álvaro, 2024. "Persistence in power of long-lived parties," European Economic Review, Elsevier, vol. 163(C).
    2. Tasos Kalandrakis & Arthur Spirling, 2012. "Radical Moderation: Recapturing Power in Two‐Party Parliamentary Systems," American Journal of Political Science, John Wiley & Sons, vol. 56(2), pages 413-432, April.
    3. Vincent Anesi, 2018. "Dynamic Legislative Policy Making under Adverse Selection," Discussion Papers 2018-08, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    4. César Martinelli & John Duggan, 2014. "The Political Economy of Dynamic Elections: A Survey and Some New Results," Working Papers 1403, Centro de Investigacion Economica, ITAM.
    5. Eguia, Jon X. & Giovannoni, Francesco, 2019. "Tactical Extremism," American Political Science Review, Cambridge University Press, vol. 113(1), pages 282-286, February.
    6. Forand, Jean Guillaume, 2014. "Two-party competition with persistent policies," Journal of Economic Theory, Elsevier, vol. 152(C), pages 64-91.
    7. Nunnari, Salvatore & Zápal, Jan, 2017. "Dynamic Elections and Ideological Polarization," Political Analysis, Cambridge University Press, vol. 25(4), pages 505-534, October.

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