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Despite limited electoral and governmental reward, third parties commonly contest elections under single-member-district plurality (SMD-p) electoral rules. Even under the strong party duopoly of the United States, third parties continually contest local, state, and national elections. In this paper, we relax the assumption that third party candidates are motivated solely by the rewards of office and examine the incentives for them to contest elections under variations in electoral volatility and competition. We propose a curvilinear (U-shaped) relationship between electoral competition and third party participation. When electoral competition is either very low or very high we expect the number of third party candidates to be high, due to increased opportunity to draw attention to policy issues or affect the election outcome. We expect a positive relationship between electoral volatility and third party candidacies, since high volatility signals a de-aligned electorate. We test our claims using district-level data in Canada, the United Kingdom, and the United States from 1980-2000. The results of negative binomial regressions indicate that third parties are more likely to contest elections when electoral uncertainty is high. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]