  In this paper, we investigate the interactions among oligarchs, political
parties, and voters using an agent-based modeling approach. We introduce the
OLIGO model, which is based on the spatial model of democracy, where voters
have positions in a policy space and vote for the party that appears closest to
them, and parties move in policy space to seek more votes. We extend the
existing literature on agent-based models of political economy in the following
manner: (1) by introducing a new class of agents- oligarchs - that represent
leaders of firms in a common industry who lobby for beneficial subsidies
through campaign donations; and (2) by investigating the effects of ideological
preferences of the oligarchs on legislative action. We test hypotheses from the
literature in political economics on the behavior of oligarchs and political
parties as they interact, under conditions of imperfect information and bounded
rationality. Our key results indicate that (1) oligarchs tend to donate less to
political campaigns when the parties are more resistant to changing their
policies, or when voters are more informed; and (2) if Oligarchs donate to
parties based on a combination of ideological and profit motivations, Oligarchs
will tend to donate at a lower equilibrium level, due to the influence of lost
profits. We validate these outcomes via comparisons to real world polling data
on changes in party support over time.
