On Leadership: Coordination and Endogenous Information Acquisition under Internal Disunity

We propose a quadratic pay-o Keynesian "beauty-contest" model to analyze leadership and activism within political parties. We allow for endogenous information acquisition as well as heterogeneity with respect to the optimal policy positions that leaders advocate. Party leaders send signals to party activists given a certain inherent noise and may choose to bias the signal. Party activists choose how to divide their attention and which policy position to advocate based on the signals they receive. A special feature of our model is that we consider ane instead of linear strategies for party activists. The model is analyzed for perfectly informed and fully naive activists as well as an intermediate case. Furthermore we allow for costless and costly signal biasing by leaders. We nd that for perfectly informed and fully naive activists the information acquisition/weighting process is independent from the biases added by leaders. Attention is paid only to the best communicators, regardless of bias. With perfect information biases are perfectly ltered out, and thus leaders are indierent between any bias. With full naivety, biases are fully absorbed and the unique equilibrium is a faction dictatorship, independent of the extremity of the dictators' position. With costly biasing the extreme equilibria dissapear and only leaders that share an optimal policy position with the activists consitute an equilibrium. In the case in which naive and informed activists are mixed the biasing process is no longer independent of the information acquisition/weighting process. The unique equilibrium remains one of dictatorship.