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Two-candidate competition with endogenous valence: a differential game approach

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  • Köppl Turyna, Monika

Abstract

We propose a differential game approach to analyze two--candidate competition in a la Hotelling game with candidates simultaneously choosing locations and investment in valence. We find a Markov perfect equilibrium in which candidates choose divergent locations. Divergence from the median is increasing if the parameter measuring the importance of policy relative to valence is decreasing and if valence depreciates slowly. The results are generalizable to a version of the game with probabilistic voting, that is with a stochastic state equation.

Suggested Citation

  • Köppl Turyna, Monika, 2014. "Two-candidate competition with endogenous valence: a differential game approach," MPRA Paper 64203, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:64203
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    File URL: https://mpra.ub.uni-muenchen.de/64203/1/MPRA_paper_64203.pdf
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    References listed on IDEAS

    as
    1. Caputo,Michael R., 2005. "Foundations of Dynamic Economic Analysis," Cambridge Books, Cambridge University Press, number 9780521842723, September.
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    4. Köppl-Turyna, Monika, 2014. "Campaign finance regulations and policy convergence: The role of interest groups and valence," European Journal of Political Economy, Elsevier, vol. 33(C), pages 1-19.
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    7. Ansolabehere, Stephen & Snyder, James M, Jr, 2000. "Valence Politics and Equilibrium in Spatial Election Models," Public Choice, Springer, vol. 103(3-4), pages 327-336, June.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    differential game; two--candidate competition; valence;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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