Advertising and Voter Data in Asymmetric Political Contests

Priyanka Sharma and Liad Wagman

Information Economics and Policy, 2020, vol. 52, issue C

Abstract: We study a political contest where two candidates advertise on a platform to persuade voters to vote in their favor. Voters a priori favor one of the candidates. The extent of a candidate’s favorability can be ascertained by a data intermediary who can decide to sell this information to one, both or neither of the candidates. We contrast the intermediary’s incentives for selling information with the platform’s incentives for maximizing candidates’ advertising expenditures, and show that the two are always at conflict. Our findings suggest that tensions may exist between social-media platforms, which often generate data that an intermediary may collect, and an intermediary whose data sale choice can lower the platform’s profit from advertisements. We characterize conditions under which the intermediary can influence the outcome of the contest.

Keywords: Platform; Intermediary; Information asymmetry; Asymmetric contest (search for similar items in EconPapers)
JEL-codes: D72 D80 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:52:y:2020:i:c:s0167624519300022

DOI: 10.1016/j.infoecopol.2020.100864

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