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Strategic Spending in Voting Competitions with Social Networks

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  • Carlos Lever Guzmán
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    Abstract

    This paper proposes a model of voting competitions (political campaigns and strategic lobbying) where voters are influenced by the opinion of their neighbors on a social network. In the unique pure strategy nash equilibrium, resources are targeted toward individuals with an influential position in the network. This finding contrasts with previous theories of strategic spending which predict that parties (or lobbies) should spend more on individuals who have a higher probability of being pivotal for the vote. The paper then tests the model using data on campaign contributions by interests groups in the US. House of Representatives. The estimations show that both network influence and pivotality are significant predictors of campaign contributions.

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    File URL: http://www.banxico.org.mx/publicaciones-y-discursos/publicaciones/documentos-de-investigacion/banxico/%7BF4447369-7102-0A6D-891F-F34AB07D2981%7D.pdf
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    Bibliographic Info

    Paper provided by Banco de México in its series Working Papers with number 2010-16.

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    Date of creation: Dec 2010
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    Handle: RePEc:bdm:wpaper:2010-16

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    Related research

    Keywords: Network games; strategic spending; Colonel Blotto games; counteractive lobbying; Bonacich centrality;

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    1. Snyder, James M, 1989. "Election Goals and the Allocation of Campaign Resources," Econometrica, Econometric Society, vol. 57(3), pages 637-60, May.
    2. Andrea Galeotti & Andrea Mattozzi, 2011. ""Personal Influence": Social Context and Political Competition," American Economic Journal: Microeconomics, American Economic Association, vol. 3(1), pages 307-27, February.
    3. Skaperdas, Stergios, 1996. "Contest Success Functions," Economic Theory, Springer, vol. 7(2), pages 283-90, February.
    4. Brian Roberson, 2006. "The Colonel Blotto game," Economic Theory, Springer, vol. 29(1), pages 1-24, September.
    5. Daron Acemoglu & Kostas Bimpikis & Asuman Ozdaglar, 2010. "Dynamics of Information Exchange in Endogenous Social Networks," NBER Working Papers 16410, National Bureau of Economic Research, Inc.
    6. Ballester, Coralio & Calvó-Armengol, Antoni & Zenou, Yves, 2005. "Who’s Who in Networks. Wanted: The Key Player," CEPR Discussion Papers 5329, C.E.P.R. Discussion Papers.
    7. Yann Bramoullé & Rachel Kranton & Martin D'Amours, 2010. "Strategic Interaction and Networks," Cahiers de recherche 1018, CIRPEE.
    8. Hirshleifer, Jack, 1991. "The Technology of Conflict as an Economic Activity," American Economic Review, American Economic Association, vol. 81(2), pages 130-34, May.
    9. Acemoglu, Daron & Ozdaglar, Asuman & ParandehGheibi, Ali, 2010. "Spread of (mis)information in social networks," Games and Economic Behavior, Elsevier, vol. 70(2), pages 194-227, November.
    10. Ron Siegel, 2009. "All-Pay Contests," Econometrica, Econometric Society, vol. 77(1), pages 71-92, 01.
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