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Political Market Structure

Author

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  • James E. Anderson
  • Thomas J. Prusa

Abstract

Many political markets are essentially uncontested, in the sense that one candidate raises little (or no) money and consequently has little chance of election. This presents a puzzle in the presence of apparently low barriers to entry. Using a variant of Baron (1989) we provide a theory encompassing both contested and uncontested markets. The essential addition is the presence of fixed costs of campaigning. We show that these may be quite small and yet constitute decisive barriers to entry.

Suggested Citation

  • James E. Anderson & Thomas J. Prusa, 2001. "Political Market Structure," NBER Working Papers 8371, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:8371
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    References listed on IDEAS

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    1. Kevin Grier & Michael Munger, 1986. "The impact of legislator attributes on interest-group campaign contributions," Journal of Labor Research, Springer, vol. 7(4), pages 349-361, September.
    2. Grier, Kevin B & Munger, Michael C, 1991. "Committee Assignments, Constituent Preferences, and Campaign Contributions," Economic Inquiry, Western Economic Association International, vol. 29(1), pages 24-43, January.
    3. Jeffrey Milyo, 1997. "The economics of political campaign finance: FECA and the puzzle of the not very greedy grandfathers," Public Choice, Springer, vol. 93(3), pages 245-270, December.
    4. Milyo Jeffrey & Primo David & Groseclose Timothy, 2000. "Corporate PAC Campaign Contributions in Perspective," Business and Politics, De Gruyter, vol. 2(1), pages 1-15, April.
    5. Stephen D. Levitt, 1998. "Are PACs Trying to Influence Politicians or Voters?," Economics and Politics, Wiley Blackwell, vol. 10(1), pages 19-35, March.
    6. Snyder, James M, Jr, 1992. "Long-Term Investing in Politicians; or, Give Early, Give Often," Journal of Law and Economics, University of Chicago Press, vol. 35(1), pages 15-43, April.
    7. repec:cup:apsrev:v:84:y:1990:i:03:p:797-820_19 is not listed on IDEAS
    8. James M. Snyder, 1991. "On Buying Legislatures," Economics and Politics, Wiley Blackwell, vol. 3(2), pages 93-109, July.
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    Cited by:

    1. James Anderson & Maurizio Zanardi, 2009. "Political pressure deflection," Public Choice, Springer, vol. 141(1), pages 129-150, October.
    2. L. Lambertini, 2001. "Dynamic Analysis of an Electoral Campaign," Working Papers 415, Dipartimento Scienze Economiche, Universita' di Bologna.

    More about this item

    JEL classification:

    • L0 - Industrial Organization - - General

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