Don't get confused between the two: market and an election. In a market, you can buy what you want to buy, so the more choices the better. You can pick and choose.
In an election, you cannot get the candidate you pick to occupy the seat. It has to be decided together with the other voters and the candidate with the most supporters will win the contest. In a highly contest, a much hated minority can emerge as the winner. A good example is the last PE.
Your argument holds no water. None of the political parties want a multi-cornered fight if they are serious in wanting to win unless they have a very special attraction to a small group of hardcore supporters who will stay with them, no matter how many the number of corners there are. In other words, they can win only with a minority win with others all diluted by the multi-cornered distribution. But I must say, this works in contradiction to the majority wishes of the people and is therefore not a democratic election.