Conferences at Department of Economics, University of Toronto, Canadian Economic Theory Conference 2013

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A Model of Two-Party Representative Democracy: Endogenous Party Formation

Hideo Konishi*, Katsuya Kobayashi

Last modified: 2013-04-15

Abstract


This paper proposes a model of two-party representative democracy on a single-dimensional political space, in which voters choose their parties in order to influence the party representative choices. After two candidates are selected as the median of each party's support group, Nature determines the candidates' competence levels. Based on the candidates' political positions and competence levels, voters vote for the preferable candidate without being tied to their party choice. We show that there exists a nontrivial equilibrium under some conditions, and also that dependent on voter distribution over their political positions, the equilibrium party line and the ex ante probabilities of the two-party candidates winning are biased. In particular, we show that if a party has a strong subgroup with extreme positions, then the party tends to alienate its moderate subgroup, and its probability of winning the final election is reduced.

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