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Vote trading with and without party leaders

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  • Casella, Alessandra
  • Palfrey, Thomas
  • Turban, Sébastien

Abstract

Two groups of voters of known sizes disagree over a single binary decision to be taken by simple majority. Individuals have different, privately observed intensities of preferences and before voting can buy or sell votes among themselves for money. We study, theoretically and experimentally, the implication of such trading for outcomes and welfare when trades are coordinated by the two group leaders and when they take place anonymously in a competitive market. The theory has strong predictions. In both cases, trading falls short of full efficiency, but for opposite reasons: with group leaders, the minority wins too rarely; with market trades, the minority wins too often. As a result, with group leaders, vote trading improves over no-trade; with market trades, vote trading can be welfare reducing. The theoretical predictions are strongly supported by the experimental data.

Suggested Citation

  • Casella, Alessandra & Palfrey, Thomas & Turban, Sébastien, 2014. "Vote trading with and without party leaders," Journal of Public Economics, Elsevier, vol. 112(C), pages 115-128.
    • Handle: RePEc:eee:pubeco:v:112:y:2014:i:c:p:115-128
    DOI: 10.1016/j.jpubeco.2014.01.001
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    Cited by:

    1. Casella, Alessandra & Turban, Sébastien, 2014. "Democracy undone. Systematic minority advantage in competitive vote markets," Games and Economic Behavior, Elsevier, vol. 88(C), pages 47-70.
    2. Matter, Ulrich & Roberti, Paolo & Slotwinski, Michaela, 2019. "Vote buying in the US Congress," ZEW Discussion Papers 19-052, ZEW - Leibniz Centre for European Economic Research.
    3. Alessandra Casella & Antonin Macé, 2021. "Does Vote Trading Improve Welfare?," Annual Review of Economics, Annual Reviews, vol. 13(1), pages 57-86, August.
    4. Chakravarty, Surajeet & Kaplan, Todd R. & Myles, Gareth, 2018. "When costly voting is beneficial," Journal of Public Economics, Elsevier, vol. 167(C), pages 33-42.
    5. Omar A. Guerrero & Ulrich Matter, 2016. "Revealing the Anatomy of Vote Trading," Papers 1611.01381, arXiv.org.
    6. Xefteris, Dimitrios & Ziros, Nicholas, 2018. "Strategic vote trading under complete information," Journal of Mathematical Economics, Elsevier, vol. 78(C), pages 52-58.
    7. Nikolas Tsakas & Dimitrios Xefteris & Nicholas Ziros, 2021. "Vote Trading in Power-Sharing Systems: A Laboratory Investigation," The Economic Journal, Royal Economic Society, vol. 131(636), pages 1849-1882.
    8. Dimitrios Xefteris & Nicholas Ziros, 2017. "Strategic Vote Trading in Power Sharing Systems," American Economic Journal: Microeconomics, American Economic Association, vol. 9(2), pages 76-94, May.
    9. Goeree, Jacob K. & Zhang, Jingjing, 2017. "One man, one bid," Games and Economic Behavior, Elsevier, vol. 101(C), pages 151-171.
    10. Guerrero, Omar & Matter, Ulrich, 2021. "Quantifying Vote Trading Through Network Reciprocity," Economics Working Paper Series 2106, University of St. Gallen, School of Economics and Political Science.
    11. Casella, Alessandra & Macé, Antonin, 2020. "Does Vote Trading Improve Welfare?," CEPR Discussion Papers 15201, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    Vote trading; Majority voting; Committees; Experiments;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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