Lockwood, Ben and Le, Minh and Rockey, James Charles, “Dynamic Electoral Competition with Voter Loss-Aversion and Imperfect Recall”. Journal of Public Economics, April 2024, 232(105072). Available at


This paper explores the implications of voter loss-aversion and imperfect recall for the dynamicsof electoral competition in a simple Downsian model of repeated elections. We first establish a benchmark result: when the voters’ reference point is forward-looking, there are a continuum of rational expectations equilibria (REE). When voters are backward-looking i.e. the reference point is last period’s recalled policy, interesting dynamics only emerge when voters have imperfect recall about that policy. Then, the interplay between the median voter’s reference point and political parties’ choice of platforms generates a dynamic process of polarization (or de-polarization). Under the assumption that parties are risk-neutral, platforms monotonically converge over time to a long-run equilibrium, which is always a REE. When parties are risk-averse, dynamic incentives also come into play, and generally lead to more policy moderation, resulting in equilibria that are more moderate than the most moderate REE.