Journal Article

Campaign Advertising and Voter Welfare

Andrea Prat

in The Review of Economic Studies

Published on behalf of Review of Economic Studies Ltd

Volume 69, issue 4, pages 999-1017
Published in print October 2002 | ISSN: 0034-6527
Published online October 2002 | e-ISSN: 1467-937X | DOI: http://dx.doi.org/10.1111/1467-937X.00234
Campaign Advertising and Voter Welfare

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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: many voters, two candidates, and one interest group. The group has non-verifiable insider information on the candidates' quality 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, if they arise too often, they are detrimental to voters).

Journal Article.  0 words. 

Subjects: Economics

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