Equilibria in Campaign Spending Games: Theory and Data

@article{Erikson2000EquilibriaIC,
  title={Equilibria in Campaign Spending Games: Theory and Data},
  author={Robert S. Erikson and Thomas R. Palfrey},
  journal={American Political Science Review},
  year={2000},
  volume={94},
  pages={595 - 609}
}
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… 
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