Signaling Valence by Positive and Negative Campaigns

This paper aims at analyzing both positive and negative politicalcampaigns which affect voters’ perception about candidate valence. Considerthe situation where candidates know valences each other but the voters cannotobserve one candidate’s valence. We characterize perfect Bayesian equilibria,which depend on the cost of positive campaign for the candidate and the cost ofnegative campaign against the opponent. The cost may be interpreted as the campaignbudget constraint or the risk from backfire. We show that there always exista pooling equilibrium and, for a wide range of parameters, a separating equilibrium.If positive campaign costs sufficiently less by the candidate with highervalence, the high valence candidate conducts positive campaign whereas the lowvalence candidate does not. More important, if negative campaign against thehigh valence opponent is sufficiently costly or risky due to backfire, the incumbentconducts negative campaign against a low valence challenger but notagainst a high valence one. We also show that, the smaller the valence differenceis between two candidates, the larger the platform divergence becomes on theequilibrium.