Quantitative Marketing and Economics

, Volume 14, Issue 1, pp 1–40 | Cite as

Advertising competition in presidential elections

Article

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

Advertising Politics Empirical game Presidential election Electoral college Direct vote Resource allocation Contest 

JEL Classification

D72 L10 M37 

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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

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