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Electoral Contests with Dynamic Campaign Contributions

Author

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  • Andrea Mattozzi
  • Fabio Michelucci

Abstract

We study a two-period dynamic principal agent model in which two agents with different unobservable abilities compete in a contest for a single prize. A risk-neutral principal can affect the outcome of the contest by dividing a given budget between agents in each period and her net payoff depends on the rela- tive share of the budget given to the winner of the contest. We analyze two settings that differ by the presence/absence of moral hazard. The results we derive are consistent with stylized facts regarding the dynamics of US campaign contributions.

Suggested Citation

  • Andrea Mattozzi & Fabio Michelucci, 2017. "Electoral Contests with Dynamic Campaign Contributions," CERGE-EI Working Papers wp599, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    • Handle: RePEc:cer:papers:wp599
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    File URL: http://www.cerge-ei.cz/pdf/wp/Wp599.pdf
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    References listed on IDEAS

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    1. Johannes Hörner & Larry Samuelson, 2013. "Incentives for experimenting agents," RAND Journal of Economics, RAND Corporation, vol. 44(4), pages 632-663, December.
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    8. David Austen-Smith, 1987. "Interest groups, campaign contributions, and probabilistic voting," Public Choice, Springer, vol. 54(2), pages 123-139, January.
    9. Marina Halac & Navin Kartik & Qingmin Liu, 2017. "Contests for Experimentation," Journal of Political Economy, University of Chicago Press, vol. 125(5), pages 1523-1569.
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    Cited by:

    1. Avidit Acharya & Takuo Sugaya & Eray Turkel, 2022. "Electoral Campaigns as Dynamic Contests," "Marco Fanno" Working Papers 0293, Dipartimento di Scienze Economiche "Marco Fanno".
    2. Avidit Acharya & Edoardo Grillo & Takuo Sugaya & Eray Turkel, 2019. "Dynamic Campaign Spending," Carlo Alberto Notebooks 601, Collegio Carlo Alberto.

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    More about this item

    Keywords

    dynamic games; contests; experimentation; lobbies; campaign contributions;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

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