Intra-party decision making, party formation, and moderation in multiparty systems

We establish coalitional stable party structures of a party formation game in an elected assembly. Farsighted political players can commit to form parties and to vote on policies according to the party position which is determined by intra-party majority rule. Parties may form governments and block proposals by a randomly selected member of the government. If the government recognition rule allows for the formation of multiparty governments, the median parliamentarian either realizes her ideal point or a policy lottery which she strictly prefers to the status quo. This outcome is enforced by the threat of forming a moderating centre party.

► We model the formation of stable party structures with policy motivated politicians.
► We examine the effects of intra-party majority rule in a multiparty government.
► In all stable party structures, the median improves over the status quo.
► This result is supported by the option of forming a moderating centre party.