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The Incumbency Effects of Signalling

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Economica / NEW SERIES

Published online on

Abstract

Much literature on political behaviour treats politicians as motivated by re‐election, choosing actions to signal their types to voters. We identify a novel implication of incumbent signalling. Because incumbents only care about clearing a re‐election hurdle, signals will tend to cluster just above the threshold needed for re‐election. This generates a skew distribution of signals leading to an incumbency advantage in the probability of election. We also solve for the optimal threshold when voters have the ability to commit.