The Hotelling-Downs Model with Runoff Voting
38 Pages Posted: 4 Sep 2010 Last revised: 6 Sep 2010
Date Written: September 2, 2010
We consider the Hotelling-Downs model with n ≥ 2 office seeking candidates and runoff voting. We show that Nash equilibria in pure strategies always exist and that there are typically multiple equilibria, both convergent (all candidates are located at the median) and divergent (candidates locate at distinct positions), though only divergent equilibria are robust to free entry. Moreover, two-policy equilibria exist under any distribution of voters' ideal policies, while equilibria with more than two policies exist generically but under restrictive conditions that we characterize. In this sense, our analysis suggests that two-policy equilibria are the most prominent outcomes.
Keywords: Downs, Free Entry, Runoff System, Equilibrium
JEL Classification: D01, D03, D70
Suggested Citation: Suggested Citation