Strategic Challengers and the Incumbency Advantage

Abstract

The existing formal studies on the incumbency advantage do not take strategicchoices of electoral challengers into account. We develop a dynamic model ofinfinitely repeated electoral competition that incorporates strategic challengers andshows the endogenous emergence of the incumbency advantage. Politicianscharacteristics are of two dimensions, policy and quality. We assume that policypreferences are heterogeneous among players but everyone prefers to elect a highquality candidate. Candidates types which are defined by policy preference andquality are private information but by observing the incumbents policy choicevoters know the incumbents type while nothing is revealed about a challenger.With a strategic challenger we find an equilibrium in which only high qualitychallengers campaign to distinguish themselves from low quality challengers andwin the election. However, we still find a strong incumbency advantage accruingfrom voters ignorance about the challengers policy preference relative to theirknowledge of the incumbent.