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Campaign Spending Limits and Political Advertising

Author

Listed:
  • David Soberman

    () (INSEAD, 77305 Fontainebleau Cedex, France)

  • Loïc Sadoulet

    () (INSEAD, 77305 Fontainebleau Cedex, France)

Abstract

Traditionally, research on political campaigns has focused on the positioning of parties and not on how parties communicate with the electorate. We construct a model where two parties fund both the "creative" and "media" elements of political advertising and examine how campaign budgets affect advertising strategies in the context of a political campaign. Our key finding is that tight campaign limits stimulate aggressive advertising on the part of competing parties, while generous budgets often lead to parties acting defensively. The analysis also provides an explanation for the increasingly partisan campaigns that the Republicans and Democrats have taken in recent elections. When there is significant polarization amongst noncommitted voters and campaign spending limits are higher, we find that parties "retrench" toward traditional constituencies.

Suggested Citation

  • David Soberman & Loïc Sadoulet, 2007. "Campaign Spending Limits and Political Advertising," Management Science, INFORMS, vol. 53(10), pages 1521-1532, October.
  • Handle: RePEc:inm:ormnsc:v:53:y:2007:i:10:p:1521-1532
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    File URL: http://dx.doi.org/10.1287/mnsc.1070.0717
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Brett R. Gordon & Wesley R. Hartmann, 2013. "Advertising Effects in Presidential Elections," Marketing Science, INFORMS, vol. 32(1), pages 19-35, June.
    2. Mitchell J. Lovett & Ron Shachar, 2011. "The Seeds of Negativity: Knowledge and Money," Marketing Science, INFORMS, vol. 30(3), pages 430-446, 05-06.
    3. Pastine, Ivan & Pastine, Tuvana, 2012. "Incumbency advantage and political campaign spending limits," Journal of Public Economics, Elsevier, vol. 96(1), pages 20-32.
    4. Brett Gordon & Mitchell Lovett & Ron Shachar & Kevin Arceneaux & Sridhar Moorthy & Michael Peress & Akshay Rao & Subrata Sen & David Soberman & Oleg Urminsky, 2012. "Marketing and politics: Models, behavior, and policy implications," Marketing Letters, Springer, vol. 23(2), pages 391-403, June.
    5. Klingelhöfer, Jan, 2011. "Lexicographic Voting," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48701, Verein für Socialpolitik / German Economic Association.

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