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Minority voting and long-term decisions

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  • Fahrenberger, Theresa
  • Gersbach, Hans

Abstract

In 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 including a first-period project that may have 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 retain their voting rights 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.

Suggested Citation

  • Fahrenberger, Theresa & Gersbach, Hans, 2010. "Minority voting and long-term decisions," Games and Economic Behavior, Elsevier, vol. 69(2), pages 329-345, July.
  • Handle: RePEc:eee:gamebe:v:69:y:2010:i:2:p:329-345
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    Cited by:

    1. Balistreri, Edward J. & Hillberry, Russell H. & Rutherford, Thomas F., 2011. "Structural estimation and solution of international trade models with heterogeneous firms," Journal of International Economics, Elsevier, pages 95-108.
    2. Edward J. Balistreri & Russell H. Hillberry & Thomas F. Rutherford, 2008. "Structural Estimation and Solution of International Trade Models with Heterogeneous Firms," CER-ETH Economics working paper series 08/89, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    3. Potrafke, Niklas, 2013. "Minority positions in the German Council of Economic Experts: A political economic analysis," European Journal of Political Economy, Elsevier, pages 180-187.
    4. Gersbach, Hans, 2017. "Flexible Majority Rules in democracyville: A guided tour," Mathematical Social Sciences, Elsevier, pages 37-43.
    5. Bretschger, Lucas, 2010. "Taxes, mobile capital, and economic dynamics in a globalizing world," Journal of Macroeconomics, Elsevier, vol. 32(2), pages 594-605, June.
    6. Balistreri, Edward J. & Hillberry, Russell H. & Rutherford, Thomas F., 2011. "Structural estimation and solution of international trade models with heterogeneous firms," Journal of International Economics, Elsevier, pages 95-108.
    7. Gersbach, Hans, 2009. "Minority voting and public project provision," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 3, pages 1-40.
    8. Fahrenberger, Theresa C. & Gersbach, Hans, 2012. "Preferences for harmony and minority voting," Mathematical Social Sciences, Elsevier, pages 1-13.
    9. Alberini, Anna & Towe, Charles, 2015. "Information v. energy efficiency incentives: Evidence from residential electricity consumption in Maryland," Energy Economics, Elsevier, vol. 52(S1), pages 30-40.

    More about this item

    Keywords

    Voting Minority Durable decision Risk aversion Tyranny of majority rules;

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making

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