The problem of polarization

This paper offers a unified political economy explanation of political extremism and moderation regarding income redistribution. Unlike the standard spatial voting model, the explanation herein recognizes that extremists are distinguished not only by their political positions, but also by the intensity with which they hold them. The paper uses an extension of Aumann and Kurz’s (Econometrica 45(5):1137–1161, 1977) bargaining model to endogenize moderation and extremism in the context of democratic voting. The extension shows that low-income voters tend to be bolder in their redistributive demands and high-income voters tend to be more tenacious in defending them. These hypotheses are evaluated empirically using the Political Action Panel Study.