1. Selling Favors in the Lab: Experiments on Campaign Finance Reform Daniel Houser Thomas Stratmann George Mason University October, 2005

2. Purpose Use experiments with human subjects to investigate the political-economic implications of various campaign finance policies. Characterize how voter decisions are affected by advertising in different campaign finance regimes. Shed light on validity of various campaign finance models, particularly Coate (2004).

3. Experiment Design Incorporates the salient features of Coate (2004) Power hungry candidates of high or low quality, candidates always want to be elected. Only swing voters included, and they don’t know candidate quality. Ads are truthful and costly. Ads can be financed by special interests or the public. Electing a candidate who advertised using special interest money is costly to voters.

4. Screen Candidates See During Campaign

5. Screen Voters See During Campaign

6. Voting Screen

7. Data We report data from eight sessions, each including 24-26 unique subjects. Each session included between 8 and 15 campaigns with two unique, randomly selected candidates for each campaign. Total of 2,509 observations on 194 subjects. We draw inferences using panel data procedures that account for both session and individual effects.

8. Voting Equation Probability that a randomly selected voter will vote for the R candidate is:

9. Results

17. Conclusion Voters are sophisticated: they “update” (respond to advertising) differently in different campaign finance environments, and in a way that is consistent with theory. The results inform efficient design of campaign finance policy.