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Does Vote Trading Improve Welfare?

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  • Alessandra Casella
  • Antonin Macé

Abstract

Voters have strong incentives to increase their influence by trading votes, a practice indeed believed to be common. But is vote trading welfare-improving or welfare-decreasing? We review the theoretical literature and, when available, its related experimental tests. We begin with the analysis of logrolling – the exchange of votes for votes, considering both explicit vote exchanges and implicit vote trades engineered by bundling issues in a single bill. We then focus on vote markets, where votes can be traded against a numeraire. We cover competitive markets, strategic market games, decentralized bargaining, and more centralized mechanisms, such as quadratic voting, where votes can be bought at a quadratic cost. We conclude with procedures allowing voters to shift votes across decisions – to trade votes with oneself only – such as storable votes or a modified form of quadratic voting. We find that vote trading and vote markets are typically inefficient; more encouraging results are obtained by allowing voters to allocate votes across decisions.

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  • Alessandra Casella & Antonin Macé, 2020. "Does Vote Trading Improve Welfare?," NBER Working Papers 27743, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:27743
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    Cited by:

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    2. Dimitrios Xefteris & Nicholas Ziros, 2024. "The “invisible hand” of vote markets," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 62(1), pages 153-165, February.
    3. Hayrullah Dindar & Jean Lainé, 2022. "Compromise in combinatorial vote," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 59(1), pages 175-206, July.
    4. Correa-Lopera, Guadalupe, 2024. "Implementing direct democracy via representation," Mathematical Social Sciences, Elsevier, vol. 129(C), pages 85-92.
    5. Ali Lazrak & Jianfeng Zhang, 2023. "Democratic Policy Decisions with Decentralized Promises Contingent on Vote Outcome," Papers 2304.08008, arXiv.org, revised Nov 2024.
    6. Schönenberger, Felix, 2024. "Out of Office, Out of Step? Re-election Concners and Ideological Shirking in Lame Duck Sessions of the U.S. House of Representatives," MPRA Paper 120159, University Library of Munich, Germany.
    7. Matthew I. Jones, 2024. "Equilibria and Group Welfare in Vote Trading Systems," Papers 2406.09536, arXiv.org.
    8. Hans Gersbach, 2022. "New Forms of Democracy," CESifo Working Paper Series 10134, CESifo.

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    More about this item

    JEL classification:

    • D6 - Microeconomics - - Welfare Economics
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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