Office-seeking politicians, interest groups and split contributions in a campaign finance model

The present paper investigates an extended version of Prat's campaign finance models. In this model, interest groups make contributions to politicians to influence policy decisions. Voters are assumed to judge candidates on two aspects: policy promises and nonpolicy personal qualities referred to as valence. There are two types of voters. Among these, uninformed voters only observe campaign contributions that take the role of a signaling medium. We solve the equilibrium of the game between politicians and interest groups. We then specify conditions under which a separating equilibrium exists and study the effect of split contributions on the welfare of the median voter.