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Advertising and Voter Data in Asymmetric Political Contests

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  • Sharma, Priyanka
  • Wagman, Liad

Abstract

We study a political contest where two candidates advertise on a platform to persuade voters to vote in their favor. Voters a priori favor one of the candidates. The extent of a candidate’s favorability can be ascertained by a data intermediary who can decide to sell this information to one, both or neither of the candidates. We contrast the intermediary’s incentives for selling information with the platform’s incentives for maximizing candidates’ advertising expenditures, and show that the two are always at conflict. Our findings suggest that tensions may exist between social-media platforms, which often generate data that an intermediary may collect, and an intermediary whose data sale choice can lower the platform’s profit from advertisements. We characterize conditions under which the intermediary can influence the outcome of the contest.

Suggested Citation

  • Sharma, Priyanka & Wagman, Liad, 2020. "Advertising and Voter Data in Asymmetric Political Contests," Information Economics and Policy, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:iepoli:v:52:y:2020:i:c:s0167624519300022
    DOI: 10.1016/j.infoecopol.2020.100864
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    More about this item

    Keywords

    Platform; Intermediary; Information asymmetry; Asymmetric contest;
    All these keywords.

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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