Decisiveness of contributors' perceptions in elections

• Published in: Economic theory Vol. 49; no. 3; pp. 571 - 590
• Main Authors: Morton, Rebecca B., Myerson, Roger B.
• Format: Journal Article
• Language: English
• Published: Berlin/Heidelberg Springer 01.04.2012; Springer-Verlag; Springer Nature B.V
• Subjects: Advertisements; Advertising; Advertising campaigns; Analysis; Campaign contributions; Campaign expenditures; Campaign finance; Campaigns; Candidates; Competition; Economic policy; Economic theory; Economic Theory/Quantitative Economics/Mathematical Methods; Economics; Economics and Finance; Electioneering; Elections; Electoral campaign financing; Environmental policy; Equilibrium; Expenditures; Game Theory; Median voter; Median voter model; Microeconomics; Money; Negative campaigning; Perception; Perceptions; Political advertising; Political campaigns; Political candidates; Political communication; Political economy; Preferences; Public Finance; Public policy; Social and Behav. Sciences; Spending; Statistical median; Studies; Symposium; Uncertainty; Voters; Voting; Voting behaviour; Voting paradox; Policy divergence; Electoral equilibria; D78; Campaign spending; D72; D71
• ISSN: 0938-2259; 1432-0479
• DOI: 10.1007/s00199-011-0605-y

We consider a model of two-candidate elections with a one-dimensional policy space. Spending on campaign advertisements can directly influence voters' preferences, and contributors give the money for campaign spending in exchange for promised services if the candidate wins. We find that the winner of the election depends crucially on the contributors' beliefs about who is likely to win and the contribution market tends toward nonsymmetric equilibria in which one of the two candidates has no chance of winning. If the voters are only weakly influenced by advertising or if permissible campaign spending is small, then the candidates choose policies close to the median voter's ideal point, but the contributors still determine the winner. Uncertainty about the Condorcet winning point (or its nonexistence) can change these results and generate equilibria in which both candidates have substantial probabilities of winning.