Polarization and Campaign Spending in Elections
We develop a Downsian model of electoral competition in which candidates with both policy and office-motivations use a mixture of platforms and campaign spending to gain the median voter's support. The unique equilibrium involves randomizing over both platforms and spending, and exhibits the following properties – (i) ex-ante uncertainty in platforms, spending, and the election winner, (ii) platform divergence, (iii) inefficiency in spending and outcomes, (iv) polarization, and (v) voter extremism. We also show that platform polarization and campaign spending move in tandem, since spending is used by candidates to gain support for extreme platforms. Factors that contribute to both phenomena include the candidates' desire for extreme platforms, and their ability to translate campaign spending into support for them. The latter insight generates new hypotheses about the potential causes of both rising polarization and spending.