Rational Coercion: Citizens United and a Modern Day Prisoner's Dilemma

Abstract

This paper proposes neither a critique nor a review of the 2010 Supreme Court decision in Citizens United v. Federal Election Commission. Rather, this paper acknowledges that the Supreme Court has spoken on the issue of corporate First Amendment rights in the context of independent expenditures and asks the question: What happens next? While there are undoubtedly First Amendment and election law implications from the case, there are also important consequences for corporate law and for citizen shareholders. Instead of debating the merits of the case, this article asks if a corporation spends to influence political messages, what is the effect on shareholders? In answering that question, this article describes the “rational coercion” created in the prisoner’s dilemma and applies it to the issue of corporate political expenditures in an attempt to identify the effects of the Citizens United decision.

Keywords: Citizens United, corporate law, corporate governance, corporate political expenditures, campaign finance, shareholders, Prisoner's Dilemma, First Amendment, political advertising, elections, campaigns, political contributions, campaign contributions, corporations

JEL Classification: K00, K22, K30, Z00