Going It Alone? An Empirical Study of Coalition Formation in Elections∗

This paper studies electoral coalition formation and quantifies its impact on election outcomes. I estimate a model of electoral competition in which: (i) parties can form coalitions to coordinate their candidate nominations, and (ii) parties invest in campaign activities in support of their candidates. The model is estimated using data from the 2012 Mexican Chamber of Deputies election, which offers district-level variation in coalition formation. A comparison of election outcomes under counterfactual coalitional scenarios uncovers equilibrium savings in campaign expenditures from coalition formation, as well as significant electoral gains benefitting weaker partners. ∗Preliminary and incomplete. First version: October, 2015. This paper is based on the first chapter of my Ph.D. dissertation at the California Institute of Technology. Previous versions circulated under the title “Coalition Formation, Campaign Spending, and Election Outcomes: Evidence from Mexico.” I am grateful to Federico Echenique, Matt Shum, and Erik Snowberg for their guidance and encouragement. I also thank Stéphane Bonhomme, Ben Gillen, Alex Hirsch, Jonathan Katz, Jean-Laurent Rosenthal, and seminar participants at Caltech, Stanford GSB, and the University of Rochester for valuable comments and discussion. Staff at INE and INEGI were very helpful in obtaining the data. †Email: [email protected].