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Risk Aversion, Over-Confidence and Private Information as Determinants of Majority Thresholds

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  • Giuseppe Attanasi, Luca Corazzini, Nikolaos Georgantzis, Francesco Passarelli.

Abstract

We present and experimentally test a theoretical model of majority threshold determination as a function of voters' risk preferences. The experimental results confirm the theoretical prediction of a positive correlation between a voter's risk aversion and the corresponding preferred majority threshold. Furthermore, the experimental results show that a voter's optimal majority threshold negatively relates to the voter's confidence about how others will vote. Moreover, in a treatment in which individuals receive a private signal about others' voting behavior, the private signal tends to replace confidence.

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File URL: ftp://ftp.unibocconi.it/pub/RePEc/slp/papers/islawp34.pdf
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Bibliographic Info

Paper provided by ISLA, Centre for research on Latin American Studies and Transition Economies, Universita' Bocconi, Milano, Italy in its series ISLA Working Papers with number 34.

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Length: 31 pages
Date of creation: Oct 2009
Date of revision:
Handle: RePEc:slp:islawp:islawp34

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Keywords: majority threshold; risk aversion; (over-)confidence; laboratory experiment.;

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  1. Uriel Procaccia & Uzi Segal, 2001. "Super Majoritarianism and the Endowment Effect," Boston College Working Papers in Economics 510, Boston College Department of Economics, revised 18 Mar 2002.
  2. Casella, Alessandra & Palfrey, Thomas R & Riezman, Raymond, 2005. "Minorities and Storable Votes," CEPR Discussion Papers 5278, C.E.P.R. Discussion Papers.
  3. Alessandra Casella & Andrew Gelman & Thomas R. Palfrey, 2003. "An experimental study of storable votes," Discussion Papers 0304-01, Columbia University, Department of Economics.
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  5. Rafael Hortala-Vallve, 2007. "Qualitative Voting," Economics Series Working Papers 320, University of Oxford, Department of Economics.
  6. Giuseppe Attanasi & Luca CORAZZINI & Francesco PASSARELLI, 2009. "Voting as a Lottery," LERNA Working Papers 09.27.303, LERNA, University of Toulouse.
    • Giuseppe Attanasi, Luca Corazzini, Francesco Passarelli, 2007. "Voting as a Lottery," ISLA Working Papers 28, ISLA, Centre for research on Latin American Studies and Transition Economies, Universita' Bocconi, Milano, Italy.
    • Attanasi, Giuseppe & Corazzini, Luca & Passarelli, Francesco, 2010. "Voting as a Lottery," TSE Working Papers 09-116, Toulouse School of Economics (TSE), revised Nov 2010.
  7. Harrington, Joseph E, Jr, 1990. " The Role of Risk Preferences in Bargaining When Acceptance of a Proposal Requires Less than Unanimous Approval," Journal of Risk and Uncertainty, Springer, vol. 3(2), pages 135-54, June.
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  13. Brozynski, Torsten & Menkhoff, Lukas & Schmidt, Ulrich, 2004. "The Impact of Experience on Risk Taking, Overconfidence, and Herding of Fund Managers: Complementary Survey Evidence," Hannover Economic Papers (HEP) dp-292, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
  14. Buchanan, James M & Faith, Roger L, 1980. "Subjective Elements in Rawlsian Contractual Agreement on Distributional Rules," Economic Inquiry, Western Economic Association International, vol. 18(1), pages 23-38, January.
  15. André Blais & Marc André Bodet, 2006. "How Do Voters Form Expectations about the Parties' Chances of Winning the Election?," Social Science Quarterly, Southwestern Social Science Association, vol. 87(3), pages 477-493.
  16. Olof Johansson-Stenman & Fredrik Carlsson & Dinky Daruvala, 2002. "Measuring Future Grandparents" Preferences for Equality and Relative Standing," Economic Journal, Royal Economic Society, vol. 112(479), pages 362-383, April.
  17. Enriqueta Aragonés & Andrew Postlewaite, 1999. "Ambiguity in election games," Economics Working Papers 364, Department of Economics and Business, Universitat Pompeu Fabra.
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