Campaign Finance Levels as Coordinating Signals in Three-Way, Experimental Elections

48 Pages Posted: 16 Nov 1998

Multiple version iconThere are 2 versions of this paper

Date Written: July 1998

Abstract

If (often costly) election campaigns are simply advertising, they do not increase social welfare directly. Given this, should we limit campaign expenditures? We propose that costly campaigns can inform voters about the strength of candidates. This may increase welfare indirectly by helping voters avoid coordination failures. In laboratory elections, we study campaign finance levels as coordinating signals and compare them with our earlier work on polls. Both coordinate majority voters effectively, allowing them to stop Condorcet losers from winning. Finance levels were rational in that the total benefits of coordination exceeded the costs. Further, benefits of typical incremental contributions exceeded costs ex-post, while the next typical increment's benefits would not have.

JEL Classification: C7, C92, D72

Suggested Citation

Rietz, Thomas A. and Myerson, Roger B. and Weber, Robert J., Campaign Finance Levels as Coordinating Signals in Three-Way, Experimental Elections (July 1998). Available at SSRN: https://ssrn.com/abstract=138624 or http://dx.doi.org/10.2139/ssrn.138624

Thomas A. Rietz (Contact Author)

University of Iowa - Henry B. Tippie College of Business ( email )

C108 PBB, Suite S244
Iowa City, IA 52242-1994
United States
319-335-0856 (Phone)
319-335-3690 (Fax)

HOME PAGE: http://tippie.uiowa.edu/people/profile/profile.aspx?id=195021

Roger B. Myerson

University of Chicago - Department of Economics ( email )

1126 East 59th Street
Chicago, IL 60637
United States

Robert J. Weber

Northwestern University - Department of Managerial Economics and Decision Sciences (MEDS) ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

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