Responsive parties and political winner’s curse

<p dir="ltr">Party polarization is increasing in various countries such as the U.S. This study explores the relationship between elite preference polarization and party polarization in policy platforms. We develop an electoral competition model with a decisive voter and two parties, where each party’s ideal policy is a weighted average of the decisive voter’s ideal policy and the party’s ideology. The larger weight on the voter’s ideal policy means that each party is more responsive to the voter, which reduces preference polarization between the parties. We show that greater party responsiveness to voters intensifies policy polarization when the voter’s ideal policy is sufficiently volatile. One key effect is what we term <i>the political winner’s curse</i>: <i>conditional</i> on the party’s winning the election, the winning party infers that the voter’s ideal policy is closer to its ideology more than initially expected. Therefore, less preference polarization among elites may cause greater party polarization.</p>