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Barcelona GSE Working Paper No. 623

Title: Negative Advertising and Political Competition
Authors: Amit Gandhi, Daniela Iorio, Carly Urban
Date: 23-09-2010
Keywords: Political Advertising, Primaries, Duopoly
JEL Codes: H0
Abstract:
Why is negative advertising such a prominent feature of competition in the political market? We propose an explanation that is based on the \fewness" of competitors in a political race. The typical election in the United States is a two-candidate race. In such duopoly contests, there is a simple economic rationale for "going negative" relative to non- duopoly contests: when the number of competitors is greater than two, engaging in negative ads creates positive externalities for opponents that are not the object of the attack. In contrast, positive ads benefit only the advertiser. To empirically investigate the hypothesis that the number of competitors can explain the volume of negative advertising in an election, we focus on US non-presidential primary contests in 2004, where the nature of primaries provides us with a cross section of independent races and large variation in the number of entrants. Our estimation employs novel data from the Wisconsin Advertising Project, which contains information on all political advertisements aired in the top 100 media markets in 2004 races. We find that duopolies are twice as likely to air a negative ad when compared to non-duopolies, and that doubling the number of competitors drives the rate of negative advertising in an election close to zero. These results are robust to the inclusion of a variety of controls and instruments for entrants in the race.
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