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Political Competition and Political Extremism

Paper Session

Friday, Jan. 3, 2020 8:00 AM - 10:00 AM (PDT)

Marriott Marquis, Carlsbad
Hosted By: Econometric Society
  • Chair: Edoardo Grillo, Carlo Alberto College

The Optimal Length of Political Terms

Hans Gersbach
,
ETH Zurich
Matthew O. Jackson
,
Stanford University
Oriol Tejada
,
ETH Zurich

Abstract

We analyze the optimal length of political terms (i.e., the inverse of the optimal frequency with which regular elections should be held) in an infinite-horizon model in which candidates of two polarized parties compete for office and the median voter shifts over time. In each period of a term, office-holders determine policy and experience persistent random shocks to their valence, which affect citizens heterogeneously. Policy changes are costly for citizens and politicians. The optimal term length then balances the frequency of costly policy changes when parties change office and with the incumbent's average valence during tenure. We find that the optimal term length increases with party polarization and the degree to which the median voter cares about valence, as well as with the frequency and the size of swings in the electorate. In contrast, the optimal term length decreases when candidates for office undergo less scrutiny or when parties care more about future outcomes. Finally, with small (large) swings in the electorate and small (large) checks and balances, the optimal term length also decreases if the extent of check and balances is further reduced (increased).

The Politics of News Personalization

Lin Hu
,
Australian National University
Anqi Li
,
Washington University-St. Louis

Abstract

We study how news personalization affects policy polarization. In a two-candidate electoral competition model, an attention-maximizing infomediary aggregates information about candidate valence into news, whereas voters decide whether to consume news, trading off the expected utility gain from improved expressive voting against the attention cost. Broadcast news attracts a broad audience by offering a symmetric signal. Personalized news serves extreme voters with skewed signals featuring own-party bias and occasional big surprise. Rational news aggregation yields policy polarization even if candidates are office-motivated. Personalization makes extreme voters the disciplining entity for equilibrium polarization and increases polarization through occasional big surprise.

Radicalism in Mass Movements: Asymmetric Information and Agenda Escalation

Heng Chen
,
University of Hong Kong
Wing Suen
,
University of Hong Kong

Abstract

Asymmetric information and diverse preferences for reform create an agency problem between opposition leaders and followers. Dissatisfied citizens are unsure how bad the current situation is and can infer it from the leader’s re- form agenda. They understand that the leader has incentive to exaggerate and mislead them. Therefore, the leader has to radicalize the agenda as a way of signaling the necessity of change. Radicalism is costly as it reduces the chances of success, but is necessary for maintaining credibility. Radicalism also discour- ages moderate citizens from joining the leadership, thus further radicalizing the leadership group and their agenda.

Dynamic Campaign Spending

Avidit Acharya
,
Stanford University
Edoardo Grillo
,
Carlo Alberto College
Takuo Sugaya
,
Stanford University
Eray Turkel
,
Stanford University

Abstract

We build a model of electoral campaigning in which two office-motivated candidates allocate a budget over time to affect their relative popularity, which evolves as a (mean-reverting) stochastic process. We show that in equilibrium the ratio of spending by each candidate equals the ratio of their available budgets in every period. This result holds under general conditions concerning the impact of candidates' spending on the popularity process. We characterize the path of spending over time as a function of the parameters of the popularity process. We then use this relationship to recover estimates of the decay rate in the popularity process for U.S. elections from 2000-2014 and find substantial weekly decay rates well above 50%, consistent with the estimates obtained through different approaches by the literature on political advertising.

Demagogues and the Fragility of Democracy

Dan Bernhardt
,
University of Illinois
Stefan Krasa
,
University of Illinois
Mehdi Shadmehr
,
University of Chicago

Abstract

We investigate the susceptibility of Democracy to demagogues, studying tensions between far-sighted representatives who guard the long-run interests of voters, and office-seeking demagogues who cater to voters' short-run desires. Parties propose how to allocate resources between consumption and investment. Voters base electoral choices on current period utilities derived from policies and valence shocks. With log utility, investments converge to zero when depreciation goes to one, even though, absent demagogues, the economy would grow forever. For higher relative risk aversions, the economy always faces a risk of death spirals, in which once capital drops too low, it inevitably falls toward zero.
JEL Classifications
  • D7 - Analysis of Collective Decision-Making