Confirmation bias and signaling in Downsian elections

How do voters’ behavioural biases affect political outcomes? We study this question in a model of Downsian electoral competition in which office-motivated candidates have private information about the benefits of policies, and voters may infer candidates’ information from their electoral platforms. If voters are Bayesian, candidates have strategic incentives to ‘anti-pander’ – they choose platforms that are more extreme than is justified by their private beliefs. However, anti-pandering incentives are ameliorated if voters’ inferences are subject to confirmation bias. Voter confirmation bias can thus counteract distortions due to the strategic interaction between candidates, potentially leading to welfare improvements. Indeed, we show that all observers, whether biased or Bayesian, would like the representative voter in our model to exhibit more confirmation bias than they do themselves.