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Strategic Spending in Voting Competitions with Social Networks

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  • Lever Guzmán Carlos

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.

Suggested Citation

  • Lever Guzmán Carlos, 2010. "Strategic Spending in Voting Competitions with Social Networks," Working Papers 2010-16, Banco de México.
    • Handle: RePEc:bdm:wpaper:2010-16
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    File URL: https://www.banxico.org.mx/publications-and-press/banco-de-mexico-working-papers/%7BAFBE20D4-B67F-7B0E-0916-31EBC3EE0392%7D.pdf
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    References listed on IDEAS

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    Cited by:

    1. Marco Battaglini & Eleonora Patacchini, 2018. "Influencing Connected Legislators," Journal of Political Economy, University of Chicago Press, vol. 126(6), pages 2277-2322.

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    More about this item

    JEL classification:

    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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