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Equilibria in Campaign Spending Games: Theory and Data

Published online by Cambridge University Press:  01 September 2000

Robert S. Erikson
Columbia University
Thomas R. Palfrey
California Institute of Technology


We present a formal game-theoretic model to explain the simultaneity problem that makes 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 the 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 not, using House incumbent races spanning two decades.

Copyright © American Political Science Association 2000

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