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Abstract: We study the implications of economies of party size in a model of party formation. We show that when the policy space is one-dimensional, candidates form at most two parties. This result does not depend on the magnitude of the economies of party size or sensitively on the nature of the individuals' preferences. It does depend on our assumptions that the policy space is one-dimensional and that uncertainty is absent; we study how modifications of these assumptions affect our conclusions.
Keywords: Political parties, party formation, economies of party size
JEL Classification: D70; D72