Population Uncertainty and Duverger's Law

Abstract

We show that the waste vote argument in Palfrey (1989) has to be complemented by strategic candidacy to fully explain Duverger's law. Using distributional strategies, we completely characterize the set of limit Bayesian voting equilibria in the presence of population uncertainty. The waste vote argument is in full force to induce the Duvergerian outcomes when one candidate has the least expected vote share in equilibrium. When more than two candidates equally trail in equilibrium vote shares, extreme aversion drives some non-centrist candidate to strategically withdraw from the election. Thus, strategic candidacy restores the Duvergerian two-party equilibrium in case when the waste vote argument fails to work.

Keywords: Duverger's law, population uncertainty, Poisson game, strategic voting, plurality rule, citizen-candidate, extreme aversion

JEL Classification: D72