Endogenous Party Platforms: “stochastic” Membership

We analyze existence of divergent equilibria in a model of endogenous party platforms with stochastic membership. The parties proposals depend on their membership, while the membership depends both on the proposals of the parties and the unobserved idiosyncratic preferences of citizens over parties. It is shown that when citizens view the parties as similar, apart from their policy proposals (i.e., the party platform is a good predictor of individual membership decision), the divergent equilibria exist. We analyze the relationship between parties policy proposals and the unobserved idiosyncratic characteristics of parties and we obtain conclusions different from the ones provided in existing literature.