“Personal Influence”: Social Context and Political Competition

This paper studies the effect of social learning on political outcomes in a model of informative campaign advertising. Voters' communication network affects parties' incentives to disclose political information, voters' learning about candidates running for office, and polarization of the electoral outcome. In richer communication networks, parties disclose less political information and voters are more likely to possess erroneous beliefs about the characteristics of the candidates. In turn, a richer communication network among voters may lead to political polarization. These results are reinforced when interpersonal communication occurs more frequently among ideologically homogeneous individuals and parties can target political advertising.(JEL D72, D85, M37, Z13)