IDEAS home Printed from
   My bibliography  Save this paper

Turnout and Power Sharing


  • Herrera, Helios; Morelli, Massimo


Differences in electoral rules and/or legislative, executive or legal institutions across countries induce different mappings from election outcomes to distributions of power. We explore how these different mappings affect voters’ participation in a democracy. Assuming heterogeneity in the cost of voting, the effect of such institutional differences on turnout depends on the distribution of voters’ preferences for the parties: when the two parties have similar support, turnout is higher in a winner-take-all system than in a power sharing system; the result is reversed when one side has a larger base. Moreover, the winner-take-all system has higher welfare if and only if the support is uneven. We compare the ‘size effect’ and the ‘underdog compensation effect’ under different systems. All systems induce an underdog compensation which is partial. Namely, unlike other costly voting models, the side with the larger support almost surely wins the majority of the votes. The results obtained in the rational voter model, characterized by the voter free-riding problem, continue to hold in other models of turnout such as ethical voter models and voter mobilization models.

Suggested Citation

  • Herrera, Helios; Morelli, Massimo, 2010. "Turnout and Power Sharing," Economics Working Papers ECO2010/12, European University Institute.
  • Handle: RePEc:eui:euiwps:eco2010/12

    Download full text from publisher

    File URL:
    File Function: main text
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Grossman, Sanford J & Hart, Oliver D, 1979. "A Theory of Competitive Equilibrium in Stock Market Economies," Econometrica, Econometric Society, vol. 47(2), pages 293-329, March.
    2. Egbert Dierker & Hildegard Dierker & Birgit Grodal, 2002. "Nonexistence of Constrained Efficient Equilibria When Markets are Incomplete," Econometrica, Econometric Society, vol. 70(3), pages 1245-1251, May.
    3. Jacques Drèze & Enrico Minelli & Mario Tirelli, 2008. "Production and financial policies under asymmetric information," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 35(2), pages 217-231, May.
    4. Francisco Covas & Wouter J. Den Haan, 2012. "The Role of Debt and Equity Finance Over the Business Cycle," Economic Journal, Royal Economic Society, vol. 122(565), pages 1262-1286, December.
    5. Mark Gertler & Simon Gilchrist, 1994. "Monetary Policy, Business Cycles, and the Behavior of Small Manufacturing Firms," The Quarterly Journal of Economics, Oxford University Press, vol. 109(2), pages 309-340.
    6. Michael Magill & Martine Quinzii, "undated". "Incentives And Risk Sharing In A Stock Market Equilibrium," Department of Economics 96-12, California Davis - Department of Economics.
    7. Alberto Bisin & Piero Gottardi & Adriano A. Rampini, 2008. "Managerial Hedging and Portfolio Monitoring," Journal of the European Economic Association, MIT Press, vol. 6(1), pages 158-209, March.
    8. Pradeep Dubey & John Geanakoplos & Martin Shubik, 2005. "Default and Punishment in General Equilibrium," Econometrica, Econometric Society, vol. 73(1), pages 1-37, January.
    9. Allen, Franklin & Gale, Douglas, 1991. "Arbitrage, Short Sales, and Financial Innovation," Econometrica, Econometric Society, vol. 59(4), pages 1041-1068, July.
    10. Edward Simpson Prescott & Robert M. Townsend, 2006. "Firms as Clubs in Walrasian Markets with Private Information," Journal of Political Economy, University of Chicago Press, vol. 114(4), pages 644-671, August.
    11. Choe, Hyuk & Masulis, Ronald W. & Nanda, Vikram, 1993. "Common stock offerings across the business cycle : Theory and evidence," Journal of Empirical Finance, Elsevier, vol. 1(1), pages 3-31, June.
    12. William R. Zame, 2007. "Incentives, Contracts, and Markets: A General Equilibrium Theory of Firms," Econometrica, Econometric Society, vol. 75(5), pages 1453-1500, September.
    13. Jacques H. Drèze & Oussama Lachiri & Enrico Minelli, 2007. "Shareholder-efficient production plans in a multi-period economy," Documents de travail du Centre d'Economie de la Sorbonne b07065, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    14. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    15. Kihlstrom, Richard E. & Matthews, Steven A., 1990. "Managerial incentives in an entrepreneurial stock market model," Journal of Financial Intermediation, Elsevier, vol. 1(1), pages 57-79, March.
    16. Franklin Allen, Douglas Gale, 1988. "Optimal Security Design," Review of Financial Studies, Society for Financial Studies, vol. 1(3), pages 229-263.
    17. Hart, Oliver D, 1979. "On Shareholder Unanimity in Large Stock Market Economies," Econometrica, Econometric Society, vol. 47(5), pages 1057-1083, September.
    18. Alberto Bisin & Piero Gottardi, 2006. "Efficient Competitive Equilibria with Adverse Selection," Journal of Political Economy, University of Chicago Press, vol. 114(3), pages 485-516, June.
    19. Mich Tvede & Hervé Crés, 2005. "Voting in assemblies of shareholders and incomplete markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(4), pages 887-906, November.
    20. Makowski, Louis, 1980. "A characterization of perfectly competitive economies with production," Journal of Economic Theory, Elsevier, vol. 22(2), pages 208-221, April.
    21. Prescott, Edward C & Townsend, Robert M, 1984. "Pareto Optima and Competitive Equilibria with Adverse Selection and Moral Hazard," Econometrica, Econometric Society, vol. 52(1), pages 21-45, January.
    22. Pesendorfer Wolfgang, 1995. "Financial Innovation in a General Equilibrium Model," Journal of Economic Theory, Elsevier, vol. 65(1), pages 79-116, February.
    23. Makowski, Louis & Ostroy, Joseph M., 1987. "Vickrey-Clarke-Groves mechanisms and perfect competition," Journal of Economic Theory, Elsevier, vol. 42(2), pages 244-261, August.
    24. Viral V. Acharya & Alberto Bisin, 2009. "Managerial hedging, equity ownership, and firm value," RAND Journal of Economics, RAND Corporation, vol. 40(1), pages 47-77.
    25. Kashyap, Anil K & Stein, Jeremy C & Wilcox, David W, 1993. "Monetary Policy and Credit Conditions: Evidence from the Composition of External Finance," American Economic Review, American Economic Association, vol. 83(1), pages 78-98, March.
    26. Oussama Lachiri & Jean-Marc Bonnisseau, 2004. "Dreze's Criterion In A Multi-Period Economy With Stock Markets," Royal Economic Society Annual Conference 2004 88, Royal Economic Society.
    27. Gertler, Mark & Gilchrist, Simon, 1993. " The Role of Credit Market Imperfections in the Monetary Transmission Mechanism: Arguments and Evidence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(1), pages 43-64.
    28. John Geanakoplos, 2004. "Liquidity, Default and Crashes: Endogenous Contracts in General Equilibrium," Econometric Society 2004 North American Summer Meetings 633, Econometric Society.
    29. Hart, Oliver D., 1980. "Perfect competition and optimal product differentiation," Journal of Economic Theory, Elsevier, vol. 22(2), pages 279-312, April.
    30. Jonathan Heathcote & Kjetil Storesletten & Giovanni L. Violante, 2014. "Consumption and Labor Supply with Partial Insurance: An Analytical Framework," American Economic Review, American Economic Association, vol. 104(7), pages 2075-2126, July.
    31. Bisin, Alberto & Gottardi, Piero, 1999. "Competitive Equilibria with Asymmetric Information," Journal of Economic Theory, Elsevier, vol. 87(1), pages 1-48, July.
    32. Levy, Amnon & Hennessy, Christopher, 2007. "Why does capital structure choice vary with macroeconomic conditions?," Journal of Monetary Economics, Elsevier, vol. 54(6), pages 1545-1564, September.
    33. Kelsey, David & Milne, Frank, 1996. "The existence of equilibrium in incomplete markets and the objective function of the firm," Journal of Mathematical Economics, Elsevier, vol. 25(2), pages 229-245.
    34. Makowski, Louis, 1983. "Competition and Unanimity Revisited," American Economic Review, American Economic Association, vol. 73(3), pages 329-339, June.
    35. Korajczyk, Robert A. & Levy, Amnon, 2003. "Capital structure choice: macroeconomic conditions and financial constraints," Journal of Financial Economics, Elsevier, vol. 68(1), pages 75-109, April.
    36. Magill, Michael & Quinzii, Martine, 2002. "Capital market equilibrium with moral hazard," Journal of Mathematical Economics, Elsevier, vol. 38(1-2), pages 149-190, September.
    37. Peter M. DeMarzo, 1993. "Majority Voting and Corporate Control: The Rule of the Dominant Shareholder," Review of Economic Studies, Oxford University Press, vol. 60(3), pages 713-734.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Hoffman, Mitchell & León, Gianmarco & Lombardi, María, 2017. "Compulsory voting, turnout, and government spending: Evidence from Austria," Journal of Public Economics, Elsevier, vol. 145(C), pages 103-115.
    2. Jean Forand & Vikram Maheshri, 2015. "A dynamic Duverger’s law," Public Choice, Springer, vol. 165(3), pages 285-306, December.
    3. Konstantinos Matakos & Orestis Troumpounis & Dimitrios Xefteris, 2014. "Turnout and polarization under alternative electoral systems," Working Papers 77401404, Lancaster University Management School, Economics Department.
    4. Godefroy, Raphael & Henry, Emeric, 2016. "Voter turnout and fiscal policy," European Economic Review, Elsevier, vol. 89(C), pages 389-406.
    5. Aaron Kamm & Arthur Schram, 2013. "A Simultaneous Analysis of Turnout and Voting under Proportional Representation: Theory and Experiments," Tinbergen Institute Discussion Papers 13-192/I, Tinbergen Institute.
    6. Dimitrios Xefteris & Nicholas Ziros, 2017. "Strategic vote trading under complete information," University of Cyprus Working Papers in Economics 03-2017, University of Cyprus Department of Economics.
    7. Dimitrios Xefteris & Nicholas Ziros, 2017. "Strategic Vote Trading in Power Sharing Systems," American Economic Journal: Microeconomics, American Economic Association, vol. 9(2), pages 76-94, May.
    8. François Maniquet & Massimo Morelli, 2015. "Approval quorums dominate participation quorums," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(1), pages 1-27, June.
    9. Carlos Sanz, 2016. "The effect of electoral systems on voter turnout: evidence from a natural experiment," Working Papers 1623, Banco de España;Working Papers Homepage.
    10. repec:kap:pubcho:v:172:y:2017:i:3:d:10.1007_s11127-017-0457-5 is not listed on IDEAS
    11. Alejandro Saporiti, 2014. "Power sharing and electoral equilibrium," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 55(3), pages 705-729, April.
    12. Faravelli, Marco & Man, Priscilla & Walsh, Randall, 2015. "Mandate and paternalism: A theory of large elections," Games and Economic Behavior, Elsevier, vol. 93(C), pages 1-23.
    13. Marco Faravelli & Priscilla Man & Bang Dinh Nguyen, 2016. "Welfare comparison of electoral systems under power sharing," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(2), pages 413-429, August.
    14. Vijay Krishna & John Morgan, 2011. "Overcoming Ideological Bias in Elections," Journal of Political Economy, University of Chicago Press, vol. 119(2), pages 183-211.
    15. Cesar Martinelli & Thomas R. Palfrey, 2017. "Communication and Information in Games of Collective Decision: A Survey of Experimental Results," Working Papers 1065, George Mason University, Interdisciplinary Center for Economic Science.
    16. Grüner, Hans Peter & Tröger, Thomas, 2018. "Linear voting rules," Working Papers 18-01, University of Mannheim, Department of Economics.
    17. Melis Kartal, 2015. "Laboratory elections with endogenous turnout: proportional representation versus majoritarian rule," Experimental Economics, Springer;Economic Science Association, vol. 18(3), pages 366-384, September.
    18. repec:eee:ecolet:v:160:y:2017:i:c:p:64-66 is not listed on IDEAS
    19. repec:kap:pubcho:v:172:y:2017:i:3:d:10.1007_s11127-017-0459-3 is not listed on IDEAS
    20. Helios Herrera & Massimo Morelli & Salvatore Nunnari, 2014. "Turnout Across Democracies," NBER Working Papers 20451, National Bureau of Economic Research, Inc.

    More about this item


    Proportional Influence; Winner-Take-All; Underdog Compensation;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eui:euiwps:eco2010/12. 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: (Julia Valerio). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.