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Strategic Spending in Voting Competitions with Social Networks

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  • Carlos Lever Guzmán

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

  • Carlos Lever Guzmán, 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: http://www.banxico.org.mx/publicaciones-y-discursos/publicaciones/documentos-de-investigacion/banxico/%7BF4447369-7102-0A6D-891F-F34AB07D2981%7D.pdf
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    References listed on IDEAS

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    1. Yann Bramoull? & Rachel Kranton & Martin D'Amours, 2014. "Strategic Interaction and Networks," American Economic Review, American Economic Association, vol. 104(3), pages 898-930, March.
    2. Ron Siegel, 2009. "All-Pay Contests," Econometrica, Econometric Society, vol. 77(1), pages 71-92, January.
    3. Stergios Skaperdas, 1996. "Contest success functions (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 7(2), pages 283-290.
    4. Acemoglu, Daron & Bimpikis, Kostas & Ozdaglar, Asuman, 2014. "Dynamics of information exchange in endogenous social networks," Theoretical Economics, Econometric Society, vol. 9(1), January.
    5. Snyder, James M, 1989. "Election Goals and the Allocation of Campaign Resources," Econometrica, Econometric Society, vol. 57(3), pages 637-660, May.
    6. Coralio Ballester & Antoni Calvó-Armengol & Yves Zenou, 2006. "Who's Who in Networks. Wanted: The Key Player," Econometrica, Econometric Society, vol. 74(5), pages 1403-1417, September.
    7. 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.
    8. Fowler, James H., 2006. "Connecting the Congress: A Study of Cosponsorship Networks," Political Analysis, Cambridge University Press, vol. 14(04), pages 456-487, September.
    9. Hirshleifer, Jack, 1991. "The Technology of Conflict as an Economic Activity," American Economic Review, American Economic Association, vol. 81(2), pages 130-134, May.
    10. repec:cup:apsrev:v:93:y:1999:i:02:p:299-309_21 is not listed on IDEAS
    11. Brian Roberson, 2006. "The Colonel Blotto game," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 29(1), pages 1-24, September.
    12. Andrea Galeotti & Andrea Mattozzi, 2011. ""Personal Influence": Social Context and Political Competition," American Economic Journal: Microeconomics, American Economic Association, vol. 3(1), pages 307-327, February.
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    Cited by:

    1. Marco Battaglini & Eleonora Patacchini, 2016. "Influencing Connected Legislators," NBER Working Papers 22739, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

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

    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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