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Published April 2014 | Supplemental Material
Journal Article Open

Vote trading with and without party leaders

Abstract

Two groups of voters of known sizes disagree over a single binary decision to be taken by simple majority. Individuals have different, privately observed intensities of preferences and before voting can buy or sell votes among themselves for money. We study, theoretically and experimentally, the implication of such trading for outcomes and welfare when trades are coordinated by the two group leaders and when they take place anonymously in a competitive market. The theory has strong predictions. In both cases, trading falls short of full efficiency, but for opposite reasons: with group leaders, the minority wins too rarely; with market trades, the minority wins too often. As a result, with group leaders, vote trading improves over no-trade; with market trades, vote trading can be welfare reducing. The theoretical predictions are strongly supported by the experimental data.

Additional Information

© 2014 Elsevier B.V. Received 12 January 2013; Received in revised form 12 January 2014; Accepted 14 January 2014; Available online 5 February 2014. For helpful comments, we thank participants at the ESA 2011 meeting in Tucson and at seminars at Caltech, NYU, the Paris School of Economics, and Ecole Polytechnique, three referees, and the co-Editor. We thank Kyle Gerry for careful research assistance. We gratefully acknowledge financial support from the National Science Foundation (SES-0617820, SES-0617934, and SES-0962802), the Gordon and Betty Moore Foundation, the Center for Experimental Social Science at NYU, the Social Science Experimental Laboratory at Caltech, and the Straus Institute at NYU Law School. Casella thanks the Straus Institute and the Paris School of Economics for their hospitality, and the Alliance Program.

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