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Equilibria in Campaign Spending Games: Theory and Data

Erikson, Robert S. and Palfrey, Thomas R. (1997) Equilibria in Campaign Spending Games: Theory and Data. Social Science Working Paper, 1006. California Institute of Technology , Pasadena, CA. (Unpublished)

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This paper presents a formal game-theoretic model to explain the simultaneity problem that has made it difficult to obtain unbiased estimates of the effects of both incumbent and challenger spending in U.S. House elections. The model predicts a particular form of correlation between the expected closeness of the race and the level of spending by both candidates, which implies that the simultaneity problem should not be present in close races, and should be progressively more severe in range of safe races that are empirically observed. This is confirmed by comparing simple OLS regression of races that are expected to be close with races that are expected not to be close, using House incumbent races spanning two decades. The theory also implies that inclusion of a variable controlling for total spending should successfully produce reliable estimates using OLS. This is confirmed.

Item Type:Report or Paper (Working Paper)
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URLURL TypeDescription ItemPublished Version
Palfrey, Thomas R.0000-0003-0769-8109
Alternate Title:Equilibrium Effects in Campaign Spending Games: Theory and Data
Additional Information:The authors gratefully acknowledge the financial support of the National Science Foundation, Grant #'s SES-9224787 and SES-9223868. We thank Jonathan Katz and D. Roderick Kiewiet for helpful comments. Published as Erikson, R.S., & Palfrey, T.R. (2000). Equilibria in campaign spending games: Theory and data. American Political Science Review, 94(3), 595-609.
Group:Social Science Working Papers
Funding AgencyGrant Number
Subject Keywords:campaign spending; game theory; elections; incumbency
Series Name:Social Science Working Paper
Issue or Number:1006
Classification Code:JEL: C51, C72, D72
Record Number:CaltechAUTHORS:20170814-154504840
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80385
Deposited By: Jacquelyn Bussone
Deposited On:14 Aug 2017 22:56
Last Modified:22 Nov 2019 09:58

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