The Central Influencer Theorem: Spatial Voting Contests with Endogenous Coalition Formation

We analyze a spatial voting contest without the “one person, one vote” restriction. Players exert continuous influence effort and incurs cost accordingly. They can be heterogeneous in terms of position, disutility function, and cost function. In equilibrium, two groups endogenously emerge: players in one group try to implement more leftist policy, while those in the other group more rightist one. Since the larger group suffers more severe free-riding problem, the equilibrium policy does not converge to the center if the larger group does not have a cost advantage. We demonstrate how the location of the center (i.e., the steady-state point) depends the convexities of the utility and cost functions. We extend the model to a dynamic setting.