Prat, Andrea (1999) Campaign advertising and voter welfare. 2152. Centre for Economic Policy Research, London, UK.Full text not available from this repository.
This paper investigates the role of campaign advertising and the opportunity of legal restrictions on it. An electoral race is modelled 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 favourable 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).
|Item Type:||Monograph (Discussion Paper)|
|Additional Information:||© 1999 Andrea Prat|
|Library of Congress subject classification:||H Social Sciences > HB Economic Theory
J Political Science > JA Political science (General)
|Journal of Economic Literature Classification System:||D - Microeconomics > D7 - Analysis of Collective Decision-Making > D72 - Economic Models of Political Processes: Rent-Seeking, Elections, Legislatures, and Voting Behavior
M - Business Administration and Business Economics; Marketing; Accounting > M3 - Marketing and Advertising > M37 - Advertising
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D82 - Asymmetric and Private Information
|Sets:||Collections > Economists Online
Departments > Economics
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
|Date Deposited:||02 Jun 2008 09:16|
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