Rational Parties and Retrospective Voters

Many elections specialists take seriously V.O.Key’s hypothesis (1966) that much voting is retrospective: citizens reward good performance by becoming more likely to vote for the incumbent and punish bad performance by becoming less likely. Earlier (Bendor, Siegel, and Kumar 2005) we formalized Key’s verbal theory. Our model shows that people endogenously develop partisan voting tendencies, even if they lack explicit ideologies. However, that paper depicts parties as passive payoff-generating mechanisms. Here we make parties active, rational players with conventional goals: they either are pure office-seekers or have the usual mix of goals (office and policy preferences). The parties’ optimal strategies reflect the incentives produced by retrospective voting. These incentives are powerful: for a wide range of parameter values they induce parties to select policies that differ not only from the median of the distribution of voter ∗Professor, Graduate School of Business, 518 Memorial Way, Stanford University Stanford, CA 94305; E-mail: bendor [email protected]; Phone: 650-723-4480. †Professor, Graduate School of Business, 518 Memorial Way, Stanford University Stanford, CA 94305; E-mail: [email protected]; Phone: 650-725-9220. ‡Assistant Professor, Department of Political Science, Florida State University, Tallahassee, FL 323062230; E-mail: [email protected]; Phone: 850-645-0083.