Citizen-candidates,lobbies, and strategic campaigning

We study a spatial model of political competition in which potential candidates need a fixed amount of money from lobbies to enter an election. We show that the set of pure strategy Nash equilibria in which lobbies finance candidates whose policies they prefer among the set of entrants coincides with the set of Nash equilibria with weakly less than two entering candidates. Fixing lobbies’ preferences, if the total amount of money held by lobbies is finite, there exists some minimal distance between the two candidates’ positions. This minimal distance is a bound for all such Nash equilibria and is independent of the distribution of voters’ preferences. I would like to thank John Duggan, Al Slivinski, and William Thomson for useful comments and suggestions. Dan Kovenock and two anonymous referees also provided detailed comments and pointed out several errors. All errors are my own.