Shino Takayama,  School of Economics Discussion Paper No. 525 July 2014, School of Economics, The University of Queensland.

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This paper proposes a two-party spatial model of policy and valence issues for office-seeking candidates who face a two-stage electoral process with strategic voters. We study how the difference in valences among candidates affects the equilibrium outcomes when voters are strategic and candidates consider their winning chances in general and primary elections. Our results indicate that compared with the case of just maximizing her party median voters expected payoff, a forward-looking challenger chooses a more moderate policy so that she can appeal to the general population, and that the winning probability in the general election for the winning candidate in the primary election increases because of the more moderate policy promise that she chooses. The model is analytically tractable, and provides a vehicle for answering normative questions about holding primary elections. Finally, we provide empirical predictions on primaries and the roles of valences in elections.