Strategic candidacy for political compromise in party politics

Abstract

We study political competition among parties with policy-motivated candidates and demonstrate two-party competition where one of them has no chance of winning in the general election. If there are multiple candidates in a party, then the party can nominate the representative contingent on who are the rivals in the general election. Given that the winning party takes such a strategy, the opponent party is willing to run even with no chance of winning the general election since policy compromises can be induced from the winning party. We further demonstrate that introducing primary elections into the nomination process may induce more ideological polarization or more moderation.