Term Limits and Bargaining Power in Electoral Competition†

Research output: Contribution to journalArticlepeer-review


I study a dynamic model of electoral competition between candidates with heterogeneous valence. When the candidates’ and voters’ policy preferences differ, the winner extracts rents, limited only by the voters’ threat of electing the weaker candidate. This threat becomes more costly to the voters when the relevant time horizon is longer. Thus, term limits can increase the voters’ bargaining power and their welfare. Term limits are even more important for curbing rent extraction if entry is strategic, as in that case strong incumbents face weaker competition. The paper also compares the welfare properties of seniority caps and stochastic term limits.

Original languageEnglish (US)
Pages (from-to)1-34
Number of pages34
JournalAmerican Economic Journal: Microeconomics
Issue number3
StatePublished - 2022

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)


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