Primaries and the New Hampshire Effect∗

Candidates for U.S. presidential elections are determined through sequential elections in single states, the primaries. We develop a model in which candidates can influence their winning probability in electoral districts by spending money on campaigning. The equilibrium replicates several stylized facts very well: Campaigning is very intensive in the first district. The outcome of the first election then creates an asymmetry in the candidates’ incentives to campaign in the next district, which endogenously increases the equilibrium probability that the first winner wins in further districts (which in turn makes victory in the first district essential). A consequence of this strategic “New Hampshire Effect” is that the probability that the winner of the first election wins the nomination is considerably larger than if strategic effects were ignored. On the normative side, our model offers a possible explanation for the sequential organization: It leads (in expectation) to a lower level of advertising expenditures than simultaneous elections (which is important for the party if the winner is to keep resources for the presidential campaign). Moreover, if one of the candidates is the more effective campaigner, sequential elections also perform better with regard to the selection of the best candidate.