Majority rule with dollar voting
Consider a majority game in which each player's voting strength is equal to the player's payoff. In this game, wealth is the only source of power, and any coalition with more than half the wealth can take everything. Only extreme concentrations of wealth, in which one player owns everything or two players each own half the total wealth are undominated, and thus constitute the core. However, the stable set (von Neumann-Morgenstern solution) is significantly larger. Allocations in which one player has half the wealth, or which divide the total wealth equally among a number of players equal to a power of two, constitute the unique stable set. The stable set thus provides a formal model of an endogenous balance of power.
Volume (Year): 6 (2001)
Issue (Month): 3 ()
|Contact details of provider:|| Web page: http://link.springer.de/link/service/journals/10058/index.htm |
|Order Information:||Web: http://link.springer.de/orders.htm|
When requesting a correction, please mention this item's handle: RePEc:spr:reecde:v:6:y:2001:i:3:p:343-352. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn)or (Christopher F Baum)
If references are entirely missing, you can add them using this form.