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Democracy undone. Systematic minority advantage in competitive vote markets

Casella, Alessandra and Turban, Sébastien (2014) Democracy undone. Systematic minority advantage in competitive vote markets. Games and Economic Behavior, 88 . pp. 47-70. ISSN 0899-8256.

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We study the competitive equilibrium of a market for votes where the choice is binary and it is known that a majority of the voters supports one of the two alternatives. Voters can trade votes for a numeraire before making a decision via majority rule. We identify a sufficient condition guaranteeing the existence of an ex ante equilibrium. In equilibrium, only the most intense voter on each side demands votes, and each demands enough votes to alone control a majority. The equilibrium strongly resembles an all-pay auction for decision power: it makes clear that votes are only a medium for the allocation of power. The probability of a minority victory is always higher than efficient and converges rapidly to one-half as the electorate increases, for any minority size. The numerical advantage of the majority becomes irrelevant: democracy is undone by the market.

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Additional Information:© 2014 Elsevier Inc. Received 15 October 2013; Available online 7 August 2014. We thank Peter Buisseret, Navin Kartik, Aniol Llorente-Saguer, Tom Palfrey, and participants to seminars at the University of Chicago, LSE, NYU, Warwick, Yale, and the University of Bologna for their comments; Antoine Arnoud for his help on Theorem 3, and Georgy Egorov for an illuminating discussion of Lemma 1. Casella thanks the National Science Foundation for its support (SES-0617934), Paris–Jourdan Sciences Economiques for its hospitality, and the Straus Institute at the NYU Law School for the support and hospitality provided through its fellows program.
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Subject Keywords:Voting; Majority voting; Markets for votes; Vote trading; Competitive equilibrium
Classification Code:JEL: C62; C72; D70; D72; P16
Record Number:CaltechAUTHORS:20150129-094838191
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Official Citation:Alessandra Casella, Sébastien Turban, Democracy undone. Systematic minority advantage in competitive vote markets, Games and Economic Behavior, Volume 88, November 2014, Pages 47-70, ISSN 0899-8256, (
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:54228
Deposited By: Tony Diaz
Deposited On:29 Jan 2015 21:13
Last Modified:19 Nov 2020 18:25

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