Uncertainty and the Formal Theory of Political Campaigns

Many empirical investigations indicate that information is scarce and therefore costly to holders and seekers of public office. Indeed, some studies suggest that imperfect information may account for important aspects of the behavior of politicians. Nevertheless, there is as yet no theoretical investigation of political decision making that illustrates the impact of costly information or behavior. In this paper the authors develop a model of electoral competition in which the candidates are only imperfectly aware of public preferences over issues and in which they may have the opportunity to increase the amount of information they hold at some cost. It turns out that the absence of perfect information profoundly affects the strategic structure of candidate competition. If information is costless, two-party electoral contests are naturally modeled as symmetric two-person zero-sum games. However, if candidates have distinct beliefs about voter behavior, the natural game-theoretic representation becomes a non-zero-sum game. This article is concerned mostly with analyzing the consequences of this transformation.