Democracy undone. Systematic minority advantage in competitive vote markets
- Creators
- Casella, Alessandra
- Turban, Sébastien
Abstract
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.
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.Attached Files
Accepted Version - main_votemarkets.april13.2014_0.pdf
Files
Name | Size | Download all |
---|---|---|
md5:78add468e85f7fea71652d820e53b7c2
|
491.2 kB | Preview Download |
Additional details
- Eprint ID
- 54228
- Resolver ID
- CaltechAUTHORS:20150129-094838191
- SES-0617934
- NSF
- Created
-
2015-01-29Created from EPrint's datestamp field
- Updated
-
2023-06-01Created from EPrint's last_modified field