Campaign spending in elections with micro‐targeting and ideologically biased voters

We study interactions between campaign spending and ideology in an election where two parties compete over an electorate with ideologically biased voters. The parties target voters with costly persuasive effort, which, together with ideology, defines the party each voter votes for. In equilibrium, the joint distribution of party expenditures reaches a maximum for a specific value of the ideological bias, which identifies the focus of the campaign, that is, the group most heavily targeted by the campaign. This focus shifts from swing voters to the strongest partisans of the party with the smaller budget, as the gap between party budgets increases.