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The Spending Game: Money, Votes, and Incumbency in Congressional Elections

Erikson, Robert S. and Palfrey, Thomas R. (1993) The Spending Game: Money, Votes, and Incumbency in Congressional Elections. Social Science Working Paper, 851. California Institute of Technology , Pasadena, CA. (Unpublished)

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This paper takes a game-theoretic approach to the analysis of the spending-votes relationship in Congressional elections to reinvestigate the surprisingly weak effects of incumbent spending measured in previous studies. Rather than focusing narrowly on the impact of spending on electoral outcomes, we attempt to take account of the reciprocal effect of (anticipated) closeness on spending using several statistical approaches. We also offer improvements in the specification and measurement of the vote equation, by using a better measure of district party strength adjusted for year-effects, and by including a variable that measures the heat of the campaign in terms of total spending by the incumbents and challengers. The latter measure partially corrects for the simultaneously determined (and highly positively correlated) levels of incumbent and challenger spending. A more rigorous multiequation simultaneous equations model, identified by uncorrelated errors, provides even more leverage for sorting out the effects of incumbent and challenger spending on votes. That analysis indicates (in a complete turnaround from findings reported elsewhere) that incumbent spending effects are highly significant and of a magnitude that is, if anything, greater than challenger spending effects. The paper concludes by using a game theoretic model to estimate the effect of anticipated closeness on spending and to estimate differences in campaign financing costs between incumbents and challengers.

Item Type:Report or Paper (Working Paper)
Palfrey, Thomas R.0000-0003-0769-8109
Alternate Title:Campaign Spending & Incumbency: An Alternative Simultaneous Equations Approach
Additional Information:This Working Paper replaces Working Paper 806 ("The Puzzle of Incumbent Spending in Congressional Elections"). Published: In the Journal of Politics, V. 60, #2, 1998, pp. 355-373. Titled “Campaign spending & incumbency: An alternative simultaneous equations approach”
Group:Social Science Working Papers
Subject Keywords:Elections. Incumbency, Campaign Spending, Congress, Game theory, Methodology
Series Name:Social Science Working Paper
Issue or Number:851
Classification Code:JEL: 026, 212, 213
Record Number:CaltechAUTHORS:20170824-153709478
Persistent URL:
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80776
Deposited By: Jacquelyn Bussone
Deposited On:28 Aug 2017 23:50
Last Modified:22 Nov 2019 09:58

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