Campaign Advertising and Voter Welfare

Andrea Prat

No 2152, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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).

Keywords: Advertising; Campaign Contributions; Elections; Split Contributions; Voter Welfare (search for similar items in EconPapers)
JEL-codes: D72 D82 M37 (search for similar items in EconPapers)
Date: 1999-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Journal Article: Campaign Advertising and Voter Welfare (2002)
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