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Political Market Structure

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  • James E. Anderson
  • Thomas J. Prusa

Abstract

Many political markets are essentially uncontested, in the sense that one candidate raises little (or no) money and consequently has little chance of election. This presents a puzzle in the presence of apparently low barriers to entry. Using a variant of Baron (1989) we provide a theory encompassing both contested and uncontested markets. The essential addition is the presence of fixed costs of campaigning. We show that these may be quite small and yet constitute decisive barriers to entry.

Suggested Citation

  • James E. Anderson & Thomas J. Prusa, 2001. "Political Market Structure," NBER Working Papers 8371, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:8371
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    References listed on IDEAS

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    1. Kevin Grier & Michael Munger, 1986. "The impact of legislator attributes on interest-group campaign contributions," Journal of Labor Research, Springer, vol. 7(4), pages 349-361, September.
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    4. Snyder, James M, Jr, 1992. "Long-Term Investing in Politicians; or, Give Early, Give Often," Journal of Law and Economics, University of Chicago Press, vol. 35(1), pages 15-43, April.
    5. Hall, Richard L. & Wayman, Frank W., 1990. "Buying Time: Moneyed Interests and the Mobilization of Bias in Congressional Committees," American Political Science Review, Cambridge University Press, vol. 84(3), pages 797-820, September.
    6. James M. Snyder, 1991. "On Buying Legislatures," Economics and Politics, Wiley Blackwell, vol. 3(2), pages 93-109, July.
    7. Wright, John R., 1990. "Contributions, Lobbying, and Committee Voting in the U.S. House of Representatives," American Political Science Review, Cambridge University Press, vol. 84(2), pages 417-438, June.
    8. Milyo, Jeffrey, 1997. "The Economics of Political Campaign Finance: FECA and the Puzzle of the Not Very Greedy Grandfathers," Public Choice, Springer, vol. 93(3-4), pages 245-270, December.
    9. Stephen D. Levitt, 1998. "Are PACs Trying to Influence Politicians or Voters?," Economics and Politics, Wiley Blackwell, vol. 10(1), pages 19-35, March.
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    Cited by:

    1. James Anderson & Maurizio Zanardi, 2009. "Political pressure deflection," Public Choice, Springer, vol. 141(1), pages 129-150, October.
    2. Luca Lambertini, 2014. "Dynamic Analysis of an Electoral Campaign," Dynamic Modeling and Econometrics in Economics and Finance, in: Josef Haunschmied & Vladimir M. Veliov & Stefan Wrzaczek (ed.), Dynamic Games in Economics, edition 127, pages 187-204, Springer.

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    JEL classification:

    • L0 - Industrial Organization - - General

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