Approximate implementation of Relative Utilitarianism via Groves-Clarke pivotal voting with virtual money
Abstract`Relative Utilitarianism' (RU) is a version of classical utilitarianism, where each person's utility function is rescaled to range from zero to one. As a voting system, RU is vulnerable to preference exaggeration by strategic voters. The Groves-Clarke Pivotal Mechanism elicits truthful revelation of preferences by requiring each voter to `bid' a sum of real money to cast a pivotal vote. However, this neglects wealth effects and gives disproportionate power to rich voters. We propose a variant of the Pivotal Mechanism using fixed allotments of notional `voting money'; this `Voting Money Pivotal Mechanism' (VMPM) is politically egalitarian and immune to wealth effects. In the large-population limit, the only admissible (i.e. weakly undominated) voting strategies in the VMPM are approximately truthful revelations of preferences; thus the VMPM yields an arbitrarily close approximation of RU.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 627.
Date of creation: 30 Oct 2006
Date of revision:
Relative Utilitarianism; Groves-Clarke; pivotal mechanism; demand-revealing mechanism; voting dollars; point voting;
Find related papers by JEL classification:
- D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-11-12 (All new papers)
- NEP-CDM-2006-11-12 (Collective Decision-Making)
- NEP-POL-2006-11-12 (Positive Political Economics)
- NEP-UPT-2006-11-12 (Utility Models & Prospect Theory)
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