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Brexit: A comparison of dynamic voting games with irreversible options

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  • Moldovanu, Benny
  • Rosar, Frank

Abstract

A large polarized electorate decides repeatedly between a reversible alternative (REMAIN) and an irreversible alternative (LEAVE) in an environment where the aggregate short-term effects of the decision vary from period to period. Decisions by simple majority or by a too low supermajority may perform poorly under circumstances where it is socially optimal to never LEAVE, as they can exhibit equilibria where LEAVE is chosen quickly. In general, a too low supermajority rule can have much higher welfare costs than a too high supermajority rule. If REMAIN also becomes permanent when it wins by a large enough margin, and if a new vote is triggered otherwise, particularly poor performances of the simple majority rule are avoided. The large asymmetry in potential welfare costs disappears, and the majority requirement becomes a relatively less important instrument.

Suggested Citation

  • Moldovanu, Benny & Rosar, Frank, 2021. "Brexit: A comparison of dynamic voting games with irreversible options," Games and Economic Behavior, Elsevier, vol. 130(C), pages 85-108.
    • Handle: RePEc:eee:gamebe:v:130:y:2021:i:c:p:85-108
    DOI: 10.1016/j.geb.2021.07.011
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    References listed on IDEAS

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    Cited by:

    1. Anindya Bhattacharya & Debapriya Sen, 2022. "On mechanism design with expressive preferences: an aspect of the social choice of Brexit," Papers 2208.09851, arXiv.org.

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    More about this item

    Keywords

    Dynamic voting; Irreversible option; Option value; Supermajority rules; Voting by two-sided supermajority;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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