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Competitive Equilibrium in Markets for Votes

Casella, Alexandra and Llorente-Saguer, Aniol and Palfrey, Thomas R. (2010) Competitive Equilibrium in Markets for Votes. Social Science Working Paper, 1331. California Institute of Technology , Pasadena, CA. http://resolver.caltech.edu/CaltechAUTHORS:20100924-163224980

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Abstract

We develop a competitive equilibrium theory of a market for votes. Before voting on a binary issue, individuals may buy and sell their votes with each other. We definne ex ante vote-trading equilibrium, identify weak sufficient conditions for existence, and construct one such equilibrium. We show that this equilibrium must always result in dictatorship and the market generates welfare losses, relative to simple majority voting, if the committee is large enough. We test the theoretical implications by implementing a competitive vote market in the laboratory using a continuous open-book multi-unit double auction.


Item Type:Report or Paper (Working Paper)
Group:Social Science Working Papers
Funders:
Funding AgencyGrant Number
NSFSES- 0617820
NSFSES-0617934
NSFSES-0962802
Gordon and Betty Moore FoundationUNSPECIFIED
Social Science Experimental Laboratory at CaltechUNSPECIFIED
Subject Keywords:Voting, Markets, Vote Trading, Experiments, Competitive Equilibrium
Classification Code:JEL Classi…cation: C72, C92, D70, P16
Record Number:CaltechAUTHORS:20100924-163224980
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20100924-163224980
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:20147
Collection:CaltechAUTHORS
Deposited By: Shirley Johnson
Deposited On:27 Sep 2010 18:20
Last Modified:26 Dec 2012 12:27

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