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Fundraising Strategy in the Republican Presidential Primary

The current field of Republican Presidential Primary candidates is a fairly large field comprised of nine individuals.  While every one of these candidates is not believed to have a viable chance of winning the nomination, a clear front runner has yet to be identified.  As in any political race, the ability to consistently raise significant amounts of donations is necessary for a candidate to have any chance of winning.

Political candidates must always balance where the highest payoff for their time is as their time is one of the most precious commodities.  A key place here is how much time they should spend in fundraising mode versus campaign mode.  This decision choice is easily comparable to what we learned in Chapter 6 on games.  The candidate must determine how to get the highest overall payoff by balancing the time spent on each activity.

However, what is more interesting to examine is how candidates maximize their time spent fundraising.  The two main strategies are to target wealthy donors who will contribute the maximum allowed by law or to target a much larger number of smaller donors.  However, the holy grail of political fundraising is receiving a commitment from a “bundler” who is a wealthy individual who pledges to raise funds in the magnitude of hundreds of thousands or millions of dollars.  The current Republican candidates are currently fighting to gain the support of the limited number of Republican bundlers.  Game theory tells the candidates that the greatest payoff is to go after the bundlers.

The second part of this interaction which is interesting to examine is the strategy off the bundlers.  With such a large number of candidates in the field and no clear front runner, donors and bundlers must consider the payoffs from donating/working for each of the candidates OR waiting and not working or donating to any.  In past months, many prominent members of the Republican party have chosen the wait and see approach.  It seems they examined the potential payoffs and determined the investing their time and money in any single candidate had a lower payoff than waiting.  Presently, as the race has progressed, these payoffs have changed and more Republican bundlers have committed to specific candidates, thus indicating that their highest payoff will come from their support starting now for that specific person.

http://www.reuters.com/article/2011/09/21/us-usa-campaign-fundraising-idUSTRE78K58220110921

http://www.huffingtonpost.com/2011/07/22/gop-candidates-money-from-bundlers_n_907367.html

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