Communication costs, information acquisition, and voting decisions in proxy contests

This article synthesizes some recent progress in the theoriesof corporate control and political lobbying to model the proxycampaign as a political campaign. The model yields a numberof testable implications, only some of which have been examinedin the literature. For example, if the loss from voting fora 'bad' dissident exceeds the gain from voting for a 'good'dissident, the model predicts that as communication costs fall,the number of proxy fights increases, announcement day returnsdecrease, and the fraction of dissident wins first increasesand then decreases.