A Bargaining Theory of the “Edwards’ Effect” in the 2007-8 Democratic Presidential Primary

2008’s Democratic Presidential Primary will go down as one of the most competitive races in recent history. Two candidates, Senators Barack Obama (Illinois) and Hillary Clinton (New York), fought a see-saw battle to obtain enough delegates/vote-shares for the Democratic nomination. Although the race eventually dwelled down to these two players, for a while it was a dynamic three-player-race with Senator John Edwards (North Carolina) in the fold. During that time, many people were puzzled by Edwards’ insisting on staying in the race even when he had no foreseeable chance of becoming the party’s eventual nominee. In this honors thesis, I construct a theoretical model to explain Edwards’ reason for staying in the race. My model found that if Edwards attains a certain amount of vote-shares, depending on the external circumstances, he could have pushed the election into a backroom negotiation phase. In this phase, he would have become the most pivotal player as his relatively low amount of vote-shares would ironically turn him into the player with the greatest negotiating power. This could have allowed him to come out of the backroom negotiation with a final prize value that would have exceeded the efforts he inputted. My paper coins this as “The Edwards Effect” and explores the ramifications and conditions for its existence.