Hiding information in electoral competition

In: Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Forschungsschwerpunkt Marktprozeß und Unternehmensentwicklung, Abteilung Wettbewerbsfähigkeit und industrieller Wandel, Band 00-06

Abstract

"We model a two-candidate electoral competition in which there is uncertainty about a policy-relevant state of the world. The candidates receive private signals about the true state, which are imperfectly correlated. We study whether the candidates are able to credibly communicate their information to voters through their choice of policy platforms. Our results show that the fact that private information is dispersed between the candidates creates a strong incentive for them to bias their messages toward the electorate's prior. Information transmission becomes more difficult, the more the information is dispersed between the candidates and the stronger is the electorate's prior. Indeed, as more prior information becomes available, welfare can decrease." (author's abstract)