Loss Aversion in Politics

Abstract

AbstractWe study loss aversion in elections by investigating a median voter model (full convergence in a two‐candidate election) and a model of partial divergence of policy proposals. First, we show a status quo bias, an endowment effect, and a moderating effect of policies. Second, we show the occurrence of “long‐term cycles” in policies with self‐supporting movements to the right or the left. Finally, we prove that younger societies should be more prone to change and less affected by the status quo bias than older ones.