TITLE:
Flexibility and Political Biases in Elections with Retrospective Voting
AUTHORS:
Robert C. Schmidt
KEYWORDS:
Electoral Competition, Commitment, Campaign Promises, Punishment, Dynamic Game
JOURNAL NAME:
Theoretical Economics Letters,
Vol.8 No.10,
June
19,
2018
ABSTRACT: This paper characterizes the optimal degree of
flexibility in a dynamic model where two candidates compete in elections
repeatedly. Giving the winner of an election some flexibility to depart from an
earlier campaign promise is crucial due to new information that can arrive
after the election. However, too much flexibility implies that candidates follow
primarily their own biases. It is shown that first-best policies can be
implemented for any realization of the state in all periods, in spite of
candidates’ known biases. This is achieved via retrospective voting, by
adjusting the probability of reelecting the incumbent to her implemented
policy.