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Individually Rational Dynamic Vote Trading

Author

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  • PARKASH CHANDER

    (Department of Economics, University of Pittsburgh, Pittsburgh, PA, USA)

Abstract

In this paper, we characterize dynamic trading in a voting model. We show that a dynamic trading process, called the Pivot algorithm, may converge from an initial vote allocation to an allocation which (though Pareto optimal) is not individually rational even in the weakest sense. Then, we propose an intuitive dynamic process which, unlike the Pivot algorithm, always converges from any initial vote allocation to an individually rational Pareto optimal allocation, is Condorcet consistent, and avoids unnecessary vote trading (i.e. trading that does not change the outcome). From a policy perspective, our analysis implies that a vote trade may be permitted only if no voter has objection to the trade. Without such a policy, myopic voters may participate in vote trades that are either unnecessary or eventually make them worse-off.

Suggested Citation

  • Parkash Chander, 2024. "Individually Rational Dynamic Vote Trading," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 69(04), pages 1559-1570, June.
    • Handle: RePEc:wsi:serxxx:v:69:y:2024:i:04:n:s0217590824450103
    DOI: 10.1142/S0217590824450103
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    More about this item

    Keywords

    Externalities; individual rationality; dynamic vote trading; Pivot algorithm; Condorcet consistent;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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