Electoral Rules, Strategic Entry and Polarization: Duverger's Law in Theory and the Lab​

It is a stylized fact that there are more candidates and, in particular, more candidates advancing distinct policy platforms, in elections held under proportional representation (PR) than in those held under plurality or majority rules. This observation is even used by proponents of the electoral system reform as a case in favor of PR. However, to date, we still lack a formal argument and do not know what are the mechanisms explaining this relationship: are the candidates more polarized because of the number of candidates or because of the nature of the electoral system? To address this question, we propose a new model where entry and location decisions are strategic choices made by candidates who compete under different electoral rules. We then test this model with the help of a lab experiment in which we simulate candidate entry and choice of platform in PR and plurality elections. The treatments randomly assign to participants are: the electoral system (PR and plurality), and the number of entering candidates (2, 3, or endogenously decided by participants). Our results in the lab strongly confirm the theoretical predictions of the model. This paper is co-authored with Kostas Matakos (King's College), Orestis Troumpounis (Lancaster), and Dimitrios Xefteris (Cyprus).