Working Paper: CEPR ID: DP14289
Authors: Ben Lockwood; James Rockey
Abstract: This paper studies the effect of voter loss-aversion in preferences over both candidate policy platforms and candidate valence on electoral competition. Loss-aversion over platforms leads to both platform rigidity and reduced platform polarisation, whereasloss-aversion over valence results in increased polarization and also the possibility of asymmetric equilibria with a self-fulfilling (dis)-advantage for the incumbent. The results are robust to a stochastic link between platforms and outcomes; they hold approximatelyfor a small amount of noise. A testable implication of loss-aversion over platforms is that incumbents adjust less than challengers to shifts in voter preferences. We find some empirical support for this using data for elections to the US House of Representatives.
Keywords: electoral competition; loss aversion; incumbency advantage; platform rigidity
JEL Codes: D72; D81
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| loss aversion over policy platforms (D72) | platform rigidity (D43) |
| loss aversion over policy platforms (D72) | reduced responsiveness to changes in the political landscape (D72) |
| loss aversion over valence (G41) | increased polarization between party platforms (D72) |
| loss aversion over valence (G41) | asymmetric equilibria (D51) |
| incumbents adjust less than challengers to shifts in voter preferences (D72) | incumbents' platforms shift by a smaller magnitude than challengers (D72) |