The Incumbency Effects of Signalling
Published online on November 11, 2013
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.