Election Day

Election day is upon us, and politics is in the air. Many see today as the end of a season of nasty, negative ads. Many voters, too, may be forgiven for thinking that all politicians are essentially the same.

There's a reason for this, which was laid out by Anthony Downs (who, incidentially, has a web site with provocative thoughts) in his 1957 book An Economic Theory of Democracy. The idea is this:

You may have seen a game theory model in which two lemonade stands are set up on a crowded beach, one at the far right-hand end as you face the water, and the other at the far left-hand end. Beachgoers don't like to walk very far for their lemonade, so they go to whichever stand is closest. One day the owner of the left-hand stand realizes he can move a little bit to his right and pick up a few more customers, since the customers to his left will still patronize him, and he'll win over a few of the customers who currently are about the same distance from each stand. Of course, the owner of the right-hand stand sees this, and realizes that the same logic applies to her. To make a long story short, they both end up right smack in the middle of the beach.

Now think of the length of the beach as being the political spectrum. Some people are very conservative -- say they're beachgoers on the right-hand side of the beach. Others are very liberal -- say they're the ones on the left. The Democratic candidate (i.e., the lemonade stand on the left) realizes that if he moves a bit to the right on some issues, he can pick up some moderate voters in the middle. The Republican candidate (on the right) realizes that she can only woo those voters by moving a bit to the left. As long as both feel secure that their bases will be with them, they'll both end up in what Downs called a "race to the center," thus rendering themselves more or less indistinguishable to the electorate!

Of course, since 1957, many more economic theories of political phenomena have been put forth. One place to start looking into some fun data is at Keith Poole and Howard Rosenthal's webpage Voteview. They have some theories about why the U.S. is becoming more politically polarized.

1. Why do you think the U.S. is becoming more politically polarized? Try to explain your answer with a simple economic model, like the one using the lemonade stand.