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Competitive Equilibrium in Markets for Votes

Casella, Alessandra and Llorente-Saguer, Aniol and Palfrey, Thomas R. (2012) Competitive Equilibrium in Markets for Votes. Journal of Political Economy, 120 (4). pp. 593-658. ISSN 0022-3808. doi:10.1086/667988.

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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 define the concept of ex ante vote-trading equilibrium and show by construction that an equilibrium exists. The equilibrium we characterize always results in dictatorship if there is any trade, and the market for votes generates welfare losses, relative to simple majority voting, if the committee is large enough or the distribution of values is not very skewed. We test the theoretical implications in the laboratory using a continuous open-book multiunit double auction.

Item Type:Article
Related URLs:
URLURL TypeDescription ItemSSWP 1331
Palfrey, Thomas R.0000-0003-0769-8109
Additional Information:© 2012 University of Chicago Press. Formerly SSWP 1331.
Issue or Number:4
Record Number:CaltechAUTHORS:20130116-093012236
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Official Citation:Competitive Equilibrium in Markets for Votes Alessandra Casella, Aniol Llorente-Saguer, and Thomas R. Palfrey Journal of Political Economy , Vol. 120, No. 4 (August 2012), pp. 593-658 Published by: The University of Chicago Press Article DOI: 10.1086/667988 Article Stable URL:
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:36418
Deposited By: Ruth Sustaita
Deposited On:16 Jan 2013 17:56
Last Modified:09 Nov 2021 23:22

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