Pricing Political Rallies

8 Pages Posted: 19 Jun 2017

See all articles by Caleb Fuller

Caleb Fuller

Grove City College - Economics

David Lucas

Syracuse University

Date Written: June 2017

Abstract

Why are political rallies free to attend? Fundraising is a central campaign activity and a perennial correlate of political victory. We argue that politicians set a zero price for rallies in order to reap a non‐pecuniary benefit: political support. An ‘allocation by waiting’ scheme selects those attendees with a lower opportunity cost of time relative to a standard ‘allocation by price’ scheme. Transactions costs mitigate Coasean bargaining by removing the secondary market, thereby altering the composition of the average rally crowd. This mechanism allows politicians to facilitate exchange with ‘general interests’: citizens who do not engage in rent seeking due to collective action costs but still stand to gain from redistributive policies.

Keywords: political economy, political rallies, price theory

Suggested Citation

Fuller, Caleb and Lucas, David, Pricing Political Rallies (June 2017). Economic Affairs, Vol. 37, Issue 2, pp. 271-278, 2017, Available at SSRN: https://ssrn.com/abstract=2988083 or http://dx.doi.org/10.1111/ecaf.12230

Caleb Fuller (Contact Author)

Grove City College - Economics ( email )

Grove City, PA
United States

David Lucas

Syracuse University ( email )

721 University Ave
Syracuse, NY 13244-2130
United States

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