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Mean versus median voting in multi-dimensional budget allocation problems. A laboratory experiment

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  • Puppe, Clemens
  • Rollmann, Jana

Abstract

We experimentally compare two natural mechanisms for the collective choice of an allocation of a fixed budget to a number of divisible public projects: the mean rule that implements the average of all individual proposals, and a suitably normalized median rule. Theoretical results predict extreme voting behavior in equilibrium under the mean rule and frequently sincere voting under the normalized median rule. Our findings confirm equilibrium behavior under the mean rule in situations in which the equilibrium strategies are easily identifiable. The empirical results for the normalized median rule are multifaceted. While we also find that many individuals play best responses, remarkably these are rarely sincere. Nevertheless, we find that the normalized median rule enjoys significantly better welfare properties than the mean rule.

Suggested Citation

  • Puppe, Clemens & Rollmann, Jana, 2021. "Mean versus median voting in multi-dimensional budget allocation problems. A laboratory experiment," Games and Economic Behavior, Elsevier, vol. 130(C), pages 309-330.
    • Handle: RePEc:eee:gamebe:v:130:y:2021:i:c:p:309-330
    DOI: 10.1016/j.geb.2021.08.008
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    References listed on IDEAS

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    Cited by:

    1. Louis, Philippos & Núñez, Matías & Xefteris, Dimitrios, 2023. "Trimming extreme reports in preference aggregation," Games and Economic Behavior, Elsevier, vol. 137(C), pages 116-151.
    2. Puppe, Clemens & Rollmann, Jana, 2022. "Participation in voting over budget allocations: A field experiment," Working Paper Series in Economics 155, Karlsruhe Institute of Technology (KIT), Department of Economics and Management.

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    More about this item

    Keywords

    Voting behavior; Budget allocation; Mean rule; Normalized median rule;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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