Hotelling's model has been used to describe differentiation in the political "market." Suppose that 100 voters are evenly distributed between the extreme left and the extreme right on the political spectrum, and that all voters vote, and they always vote for the candidate closest to them on this spectrum. The numbers on this spectrum represent the number of voters lying to the left of the number. So, at the midpoint, fifty voters lie to the left and fifty to the right.
If Candidate Y is running against Candidate Z:
A. Both candidates will have an incentive to move toward each other's position.
B. Candidate Y will have an incentive to move to the left, and Candidate Z will have an incentive to move to the right.
C. Both candidates will have an incentive to move to the left.
D. Neither candidate has any incentive to move.
Answer: A
Economics
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