Campaign Spending with Office-Seeking Politicians, Rational Voters, and Multiple Lobbies
I introduce a microfounded model of campaign finance with office-seeking politicians, a continuum of voters, and a large number of heterogeneous lobbies. Lobbies make contributions to politicians according to a common agency framework. Politicians use contributions to finance their electoral expenditures. Voters are not fooled by electoral expenditures: they are influenced in a way that is consistent with the equilibrium behavior of lobbies and politicians. The model is used to: (i) determine the relation between campaign spending and political deadweight; (ii) show the informational value of lobbies' contributions; (iii) evaluate the welfare implications of restricting campaign spending; and (iv) interpret the empirical finding that campaign expenditures have a very low effect on election outcome. One can say that this model makes the best case in favor of campaign contributions. Nevertheless, under reasonable parameter values, a ban on campaign contributions is welfare-improving.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gary Jacobson, 1985. "Money and votes reconsidered: congressional elections, 1972–1982," Public Choice, Springer, vol. 47(1), pages 7-62, January.
- Steven D. Levitt, 1995. "Policy Watch: Congressional Campaign Finance Reform," Journal of Economic Perspectives, American Economic Association, vol. 9(1), pages 183-193, Winter.
- In-Koo Cho & David M. Kreps, 1997.
"Signaling Games and Stable Equilibria,"
Levine's Working Paper Archive
896, David K. Levine.
- Dixit, Avinash & Grossman, Gene M. & Helpman, Elhanan, 1997.
"Common Agency and Coordination: General Theory and Application to Government Policy Making,"
3450061, Harvard University Department of Economics.
- Dixit, Avinash & Grossman, Gene M & Helpman, Elhanan, 1997. "Common Agency and Coordination: General Theory and Application to Government Policy Making," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 752-69, August.
- Gene M. Grossman & Elhanan Helpman, 1996. "Electoral Competition and Special Interest Politics," Review of Economic Studies, Oxford University Press, vol. 63(2), pages 265-286.
- Grossman, Gene & Helpman, Elhanan, 1996.
"Competing for Endorsements,"
CEPR Discussion Papers
1546, C.E.P.R. Discussion Papers.
- Grossman, G.M. & Helpman, E., 1998. "Competing for Endorsements," Papers 09-98, Tel Aviv.
- Grossman, G-M & Helpman, E, 1996. "Competing for Endorsements," Papers 182, Princeton, Woodrow Wilson School - Public and International Affairs.
- Gene M. Grossman & Elhanan Helpman, 1996. "Competing for Endorsements," Harvard Institute of Economic Research Working Papers 1784, Harvard - Institute of Economic Research.
- Kihlstrom, Richard E & Riordan, Michael H, 1984. "Advertising as a Signal," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 427-50, June.
- V. Crawford & J. Sobel, 2010.
"Strategic Information Transmission,"
Levine's Working Paper Archive
544, David K. Levine.
- Prat, Andrea, 1999.
"Campaign Advertising and Voter Welfare,"
CEPR Discussion Papers
2152, C.E.P.R. Discussion Papers.
- Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, June.
- Palda, Filip & Palda, Kristian, 1998.
" The Impact of Campaign Expenditures on Political Competition in the French Legislative Elections of 1993,"
Springer, vol. 94(1-2), pages 157-74, January.
- Filip Palda & Kristian Palda, 1998. "The impact of campaign expenditures on political competition in the French legislative elections of 1993," Public Choice, Springer, vol. 94(1), pages 157-174, January.
- Davis, Otto A & DeGroot, Morris H & Hinich, Melvin J, 1972. "Social Preference Orderings and Majority Rule," Econometrica, Econometric Society, vol. 40(1), pages 147-57, January.
- Milgrom, Paul & Roberts, John, 1986.
"Price and Advertising Signals of Product Quality,"
Journal of Political Economy,
University of Chicago Press, vol. 94(4), pages 796-821, August.
- Konishi, Hideo & Le Breton, Michel & Weber, Shlomo, 1999.
"On Coalition-Proof Nash Equilibria in Common Agency Games,"
Journal of Economic Theory,
Elsevier, vol. 85(1), pages 122-139, March.
- KONISHI, Hideo & LE BRETON, Michel & WEBER, Shlomo, . "On coalition-proof Nash equilibria in common agency games," CORE Discussion Papers RP 1383, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Landers, Renee M & Rebitzer, James B & Taylor, Lowell J, 1996. "Rat Race Redux: Adverse Selection in the Determination of Work Hours in Law Firms," American Economic Review, American Economic Association, vol. 86(3), pages 329-48, June.
- Potters, J.J.M. & Sloof, R. & van Winden, F.A.A.M., 1997.
"Campaign Expenditures, Contributions and Direct Endorsements : The Strategic Use of Information and Money to Influence Voter Behavior,"
1997-27, Tilburg University, Center for Economic Research.
- Potters, Jan & Sloof, Randolph & van Winden, Frans, 1997. "Campaign expenditures, contributions and direct endorsements: The strategic use of information and money to influence voter behavior," European Journal of Political Economy, Elsevier, vol. 13(1), pages 1-31, February.
- Potters, J.J.M. & Sloof, R. & van Winden, F.A.A.M., 1997. "Campaign expenditures, contributions and direct endorsements. The strategic use of information and money to influence voter behaviour," Other publications TiSEM 347b9f99-149a-4ab3-966f-f, Tilburg University, School of Economics and Management.
- David Austen-Smith, 1987. "Interest groups, campaign contributions, and probabilistic voting," Public Choice, Springer, vol. 54(2), pages 123-139, January.
- Rebecca Morton & Charles Cameron, 1992. "Elections And The Theory Of Campaign Contributions: A Survey And Critical Analysis," Economics and Politics, Wiley Blackwell, vol. 4(1), pages 79-108, 03.
- Morten Bennedsen & Sven Feldmann, 1998. "Persuasion Through the Purse: How Political Contributions Crowd Out Information," Working Papers 9801, Harris School of Public Policy Studies, University of Chicago.
- George Akerlof, 1976. "The Economics of Caste and of the Rat Race and Other Woeful Tales," The Quarterly Journal of Economics, Oxford University Press, vol. 90(4), pages 599-617.
- B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 101(1), pages 1-31.
- Austen-Smith, David, 1994. "Strategic Transmission of Costly Information," Econometrica, Econometric Society, vol. 62(4), pages 955-63, July.
- Levitt, Steven D, 1994. "Using Repeat Challengers to Estimate the Effect of Campaign Spending on Election Outcomes in the U.S. House," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 777-98, August.
When requesting a correction, please mention this item's handle: RePEc:eee:jetheo:v:103:y:2002:i:1:p:162-189. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.