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Campaign Finance Levels as Coordinating Signals in Three‐way, Experimental Elections
Author(s) -
Reitz T.,
Myerson R.,
Weber R.
Publication year - 1998
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/1468-0343.00044
Subject(s) - welfare , campaign finance , work (physics) , social benefits , social welfare , condorcet method , limit (mathematics) , economics , microeconomics , business , finance , public economics , voting , political science , engineering , mechanical engineering , mathematical analysis , materials science , mathematics , tailings , politics , law , market economy , metallurgy
If (often costly) election campaigns are simply advertising, they do not increase social welfare directly. Given this, should we limit campaign expenditures? We propose that costly campaigns can inform voters about the strength of candidates. This may increase welfare indirectly by helping voters avoid coordination failures. In laboratory elections, we study campaign finance levels as coordinating signals and compare them with our earlier work on polls. Both coordinate majority voters effectively, allowing them to stop Condorcet losers from winning. Finance levels were rational in that the total benefits of coordination exceeded the costs. Further, benefits of typical incremental contributions exceeded costs ex‐post, while the next typical increment's benefits would not have.