Download this Paper Open PDF in Browser

The Vicious Cycle: Fundraising and Perceived Viability in Us Presidential Primaries

41 Pages Posted: 7 May 2009  

Cameron A. Shelton

Claremont McKenna College - Robert Day School of Economics and Finance

James J Feigenbaum

Harvard University, Department of Economics, Students

Date Written: April 17, 2009

Abstract

Since at least Aldrich (1980a), a dynamic positive feedback loop between fundraising and electoral success has been hypothesized. Existing work on both directions of this feedback remains inconclusive and is often explicitly cross-sectional, ignoring the dynamic aspect of the hypothesis. Pairing high frequency FEC data on contributions and expenditures with Iowa Electronic Markets data on perceived probability of victory, we examine the bidirectional feedback between contributions and viability in a series of analyses. We find positive feedback in both directions during a successful insurgent-candidates’ breakout from obscurity. This suggests the existence of multiple steady states. The implications for the efficiency of the primary process, and hence the system of public choice, are stark: if positive feedback exists, then high quality candidates might languish in obscurity while lesser, initially prominent candidates remain better known and better funded.

Keywords: Campaign finance, presidential primaries, Iowa Electronic Markets, positive feedback loop

JEL Classification: P16, H0, Z0

Suggested Citation

Shelton, Cameron A. and Feigenbaum, James J, The Vicious Cycle: Fundraising and Perceived Viability in Us Presidential Primaries (April 17, 2009). Robert Day School of Economics and Finance Research Paper No. 2009-08. Available at SSRN: https://ssrn.com/abstract=1400864 or http://dx.doi.org/10.2139/ssrn.1400864

Cameron A. Shelton

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

500 E. Ninth St.
Claremont, CA 91711-6420
United States

James J Feigenbaum (Contact Author)

Harvard University, Department of Economics, Students ( email )

Cambridge, MA
United States

Paper statistics

Downloads
112
Rank
207,235
Abstract Views
1,370