Minority Voting and Long-term Decisions
AbstractIn this paper we propose minority voting as a scheme that can partially protect individuals from the risk of repeated exploitation. We consider a committee that meets twice to decide about projects where the first-period project may have a long-lasting impact. In the first period a simple open majority voting scheme takes place. Voting splits the committee into three groups: voting winners, voting losers, and absentees. Under minority voting only voting losers keep the voting right in the second period. We show that as soon as absolute risk aversion exceeds a threshold value minority voting is superior to repeated application of the simple majority rule.
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Bibliographic InfoPaper provided by CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich in its series CER-ETH Economics working paper series with number 07/70.
Length: 53 pages
Date of creation: Jul 2007
Date of revision:
voting; minority; durable decision; risk aversion; tyranny of majority rules;
Other versions of this item:
- D7 - Microeconomics - - Analysis of Collective Decision-Making
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-08-08 (All new papers)
- NEP-CDM-2007-08-08 (Collective Decision-Making)
- NEP-POL-2007-08-08 (Positive Political Economics)
- NEP-PPM-2007-08-08 (Project, Program & Portfolio Management)
- NEP-UPT-2007-08-08 (Utility Models & Prospect Theory)
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