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

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

Abstract

We study, both theoretically and experimentally, the relation between preferred majority thresholds and behavioral traits such as the degree of risk aversion and the subjective confidence on others preferences over the alternative to vote. The main theoretical findings are supported by experimental data. The majority threshold chosen by a subject is positively and significantly correlated with her degree of risk aversion while it is negatively and significantly associated to her confidence on others’ votes. Moreover, in a treatment in which each subject can privately observe the distribution of preferences over a sub-group of participants, we find that the quality of information crowds-out subject's confidence.

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Paper provided by Toulouse School of Economics (TSE) in its series TSE Working Papers with number 09-088.

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Date of creation: Apr 2010
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Handle: RePEc:tse:wpaper:22195

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

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  1. Alessandra Casella & Andrew Gelman & Thomas R. Palfrey, 2003. "An experimental study of storable votes," Discussion Papers 0304-01, Columbia University, Department of Economics.
  2. Casella, Alessandra & Palfrey, Thomas R. & Riezman, Raymond, 2006. "Minorities and storable votes," Working Papers 1261, California Institute of Technology, Division of the Humanities and Social Sciences.
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  12. 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.
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  14. 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.
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