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Campaign Advertising and Voter Welfare

Prat,A.
Abstract
This paper investigates the role of campaign advertising and the opportunity of legal restrictions on it. An electoral race is modeled as a signalling game with three classes of players: a continuum of voters, two candidates, and one interest group. The group has non-verifiable insider information on the candidates' valence and, on the basis of this information, offers a contribution to each candidate in exchange for a favorable policy position. Candidates spend the contributions they receive on non-directly informative advertising. This paper shows that: (1) A separating equilibrium exists in which the group contributes to a candidate only if the insider information about that candidate is positive; (2) Although voters are fully rational, a ban on campaign advertising can be welfare-improving; and (3) Split contributions may arise in equilibrium (and should be prohibited).
Description
Pagination: 39
Date
1997
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Publisher
Microeconomics
Collections
Tilburg University Research Output Collection
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118.pdf
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Keywords
Elections, campaign contributions, advertising, voter welfare, split contributions, D72 - Political Processes: Rent-Seeking, Lobbying, Elections, Legislatures, and Voting Behavior, D82 - Asymmetric and Private Information ; Mechanism Design, M37 - Advertising
Citation
Prat, A 1997 'Campaign Advertising and Voter Welfare' CentER Discussion Paper, vol. 1997-118, Microeconomics, Tilburg.
URI
https://hdl.handle.net/20.500.14602/26438
License
info:eu-repo/semantics/restrictedAccess
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