Quantitative Marketing and Economics

, Volume 14, Issue 1, pp 1–40

Advertising competition in presidential elections

Article

DOI: 10.1007/s11129-016-9165-6

Cite this article as:
Gordon, B.R. & Hartmann, W.R. Quant Mark Econ (2016) 14: 1. doi:10.1007/s11129-016-9165-6

Abstract

Presidential candidates purchase advertising based on each state’s potential to tip the election. The structure of the Electoral College concentrates spending in battleground states, such that a majority of voters are ignored. We estimate an equilibrium model of multimarket advertising competition between candidates that allows for endogenously determined budgets. In a Direct Vote counterfactual, we find advertising would be spread more evenly across states, but total spending levels can either decrease or increase depending on the contestability of the popular vote. Spending would increase by 13 % in the extremely narrow 2000 election, but would decrease by 54 % in 2004. These results suggest that the Electoral College greatly increases advertising spending in typical elections.

Keywords

AdvertisingPoliticsEmpirical gamePresidential electionElectoral collegeDirect voteResource allocationContest

JEL Classification

D72L10M37

Copyright information

© Springer Science+Business Media New York 2016

Authors and Affiliations

  1. 1.Kellogg School of ManagementNorthwestern UniversityEvanstonUSA
  2. 2.Graduate School of BusinessStanford UniversityStanfordUSA