@article{4cf4faf038c54929acedd9eb1123beb6,
title = "The war of information",
abstract = "We analyse political contests (campaigns) between two parties with opposing interests. Parties provide costly information to voters who choose a policy. The information flow is continuous and stops when both parties quit. Parties' actions are strategic substitutes: increasing one party's cost makes that party provide more and its opponent provide less information. For voters, parties' actions are complements and hence raising the advantaged party's cost may be beneficial. Asymmetric information adds a signalling component resulting in a belief threshold at which the informed party's decision to continue campaigning offsets other unfavourable information.",
keywords = "Campaign spending, Political competition",
author = "Faruk Gul and Wolfgang Pesendorfer",
note = "Funding Information: Finally,supposeG0(−z)<1−ez−z∗forsomez<z∗.IfG(−x)=G(−z)whenever−x>−z,lety=−∞, otherwiselety=−min{−x|G0(−x)>G0(−z)}.Then,ify=z,lety∗<ybeanypointofincreaseofG0suchthat G0(y∗)<1−ez−z∗(TherightcontinuityofG0andthefactthaty=zensuressuchazexists.)Otherwise,lety∗=y and note that y∗ < z. The optimality of G0 implies that Gy∗ is also optimal for Party 0. Hence, by the fact above, we haveUz0(G0,L0α)=Uz0(Gy∗,L0α)=Wz(y∗,Xi,log(1−G(−z))≤Wz(y∗,X0,−z+z∗)=Wz∗(y∗−z+z∗,X0)<0 contradictingtheoptimalityofGy∗.Hence,G0(−z)=1−ez−z∗forallz<z∗asdesired. ‖ Acknowledgments. Financial support from the National Science Foundation (SES-0550540) is gratefully acknowledged. We thank three anonymous referees and the editor for numerous helpful suggestions and comments. John Kim and Brian So provided excellent research assistance.",
year = "2012",
month = apr,
doi = "10.1093/restud/rds017",
language = "English (US)",
volume = "79",
pages = "707--734",
journal = "Review of Economic Studies",
issn = "0034-6527",
publisher = "Oxford University Press",
number = "2",
}