Strategic dissent in the Hotelling-Downs model with sequential entry and private information

Abstract

We analyze the Hotelling-Downs model of winner-take-all elections with sequential entry where ? ? 2 ‘office-seeking’ candidates with privately known qualities choose entry decisions and commit to policy platforms on entering. Voters receive informative public signals about the quality of each contestant once all platforms are announced. We first characterize two-party equilibria when the order of entry is exogenously given. In these equilibria, entry can occur in any ‘round’ with positive probability: highquality candidates signal their type through showing ideological dissent with the voters while low-quality ones randomize between (mis)-signaling quality through dissent and staying out. Interestingly, while informative public signals can keep low-quality candidates out of competition up to a certain degree, electoral competition improves the voter’s information about candidate types beyond what the signals can reveal. However this endogenous mechanism of strategic information transmission leads to political polarization. We then endogenize the order of entry to show that high quality candidates either enter early or late while all low quality candidates either stay out or enter late. Moreover, while extremism continues to signal quality, there must be a gradual moderation in ideology although information revelation is non-monotonic in time with full revelation for early and late entrants and only partial revelation for intermediate entrants.