The War of Information

Faruk Gul and Wolfgang Pesendorfer ()

The Review of Economic Studies, 2012, vol. 79, issue 2, 707-734

Abstract: We analyse political contests (campaigns) between two parties with opposing interests. Parties provide costly information to voters who choose a policy. The information flow is continuous and stops when both parties quit. Parties' actions are strategic substitutes: increasing one party's cost makes that party provide more and its opponent provide less information. For voters, parties' actions are complements and hence raising the advantaged party's cost may be beneficial. Asymmetric information adds a signalling component resulting in a belief threshold at which the informed party's decision to continue campaigning offsets other unfavourable information. Copyright 2012, Oxford University Press.

Date: 2012
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