IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/27743.html
   My bibliography  Save this paper

Does Vote Trading Improve Welfare?

Author

Listed:
  • 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.

Suggested Citation

  • 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
    Note: POL
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w27743.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Myerson, Roger B., 1993. "Incentives to Cultivate Favored Minorities Under Alternative Electoral Systems," American Political Science Review, Cambridge University Press, vol. 87(4), pages 856-869, December.
    2. Riker, William H. & Brams, Steven J., 1973. "The Paradox of Vote Trading," American Political Science Review, Cambridge University Press, vol. 67(4), pages 1235-1247, December.
    3. Casella, Alessandra & Laslier, Jean-François & Macé, Antonin, 2017. "Democracy for Polarized Committees: The Tale of Blotto's Lieutenants," Games and Economic Behavior, Elsevier, vol. 106(C), pages 239-259.
    4. Casella, Alessandra & Turban, Sébastien, 2014. "Democracy undone. Systematic minority advantage in competitive vote markets," Games and Economic Behavior, Elsevier, vol. 88(C), pages 47-70.
    5. , & , J. & ,, 2011. "Von Neumann-Morgenstern farsightedly stable sets in two-sided matching," Theoretical Economics, Econometric Society, vol. 6(3), September.
    6. Urs Fischbacher & Simeon Schudy, 2014. "Reciprocity and resistance to comprehensive reform," Public Choice, Springer, vol. 160(3), pages 411-428, September.
    7. Dutta, Bhaskar & Vohra, Rajiv, 2017. "Rational expectations and farsighted stability," Theoretical Economics, Econometric Society, vol. 12(3), September.
    8. Urs Fischbacher & Simeon Schudy, 2020. "Agenda Control And Reciprocity In Sequential Voting Decisions," Economic Inquiry, Western Economic Association International, vol. 58(4), pages 1813-1829, October.
    9. Alessandra Casella & Aniol Llorente-Saguer & Thomas R. Palfrey, 2012. "Competitive Equilibrium in Markets for Votes," Journal of Political Economy, University of Chicago Press, vol. 120(4), pages 593-658.
    10. Levine, David K. & Palfrey, Thomas R., 2007. "The Paradox of Voter Participation? A Laboratory Study," American Political Science Review, Cambridge University Press, vol. 101(1), pages 143-158, February.
    11. Myerson, Roger B. & Satterthwaite, Mark A., 1983. "Efficient mechanisms for bilateral trading," Journal of Economic Theory, Elsevier, vol. 29(2), pages 265-281, April.
    12. Klaus Kultti & Hannu Salonen, 2005. "Market for Votes," Homo Oeconomicus, Institute of SocioEconomics, vol. 23, pages 323-332.
    13. Jon X. Eguia & Dimitrios Xefteris, 2021. "Implementation by Vote-Buying Mechanisms," American Economic Review, American Economic Association, vol. 111(9), pages 2811-2828, September.
    14. Casella, Alessandra & Gelman, Andrew, 2008. "A simple scheme to improve the efficiency of referenda," Journal of Public Economics, Elsevier, vol. 92(10-11), pages 2240-2261, October.
    15. Dekel, Eddie & Jackson, Matthew O. & Wolinsky, Asher, 2009. "Vote Buying: Legislatures and Lobbying," Quarterly Journal of Political Science, now publishers, vol. 4(2), pages 103-128, July.
    16. Krasa, Stefan & Polborn, Mattias K., 2009. "Is mandatory voting better than voluntary voting?," Games and Economic Behavior, Elsevier, vol. 66(1), pages 275-291, May.
    17. Riker, William H. & Ordeshook, Peter C., 1968. "A Theory of the Calculus of Voting," American Political Science Review, Cambridge University Press, vol. 62(1), pages 25-42, March.
    18. John Ledyard, 1984. "The pure theory of large two-candidate elections," Public Choice, Springer, vol. 44(1), pages 7-41, January.
    19. Goeree, Jacob K. & Zhang, Jingjing, 2017. "One man, one bid," Games and Economic Behavior, Elsevier, vol. 101(C), pages 151-171.
    20. Schwartz, Thomas, 1977. "Collective Choice, Separation of Issues and Vote Trading," American Political Science Review, Cambridge University Press, vol. 71(3), pages 999-1010, September.
    21. Koehler, David H., 1975. "Vote Trading and the Voting Paradox: A Proof of Logical Equivalence," American Political Science Review, Cambridge University Press, vol. 69(3), pages 954-960, September.
    22. Preston McAfee, R., 1992. "Amicable divorce: Dissolving a partnership with simple mechanisms," Journal of Economic Theory, Elsevier, vol. 56(2), pages 266-293, April.
    23. Casella, Alessandra, 2012. "Storable Votes: Protecting the Minority Voice," OUP Catalogue, Oxford University Press, number 9780195309089.
    24. Haris Aziz & Markus Brill & Vincent Conitzer & Edith Elkind & Rupert Freeman & Toby Walsh, 2017. "Justified representation in approval-based committee voting," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 48(2), pages 461-485, February.
    25. Alessandra Casella & Thomas Palfrey, 2019. "Trading Votes for Votes. A Dynamic Theory," Econometrica, Econometric Society, vol. 87(2), pages 631-652, March.
    26. Joseph Kadane, 1972. "On division of the question," Public Choice, Springer, vol. 13(1), pages 47-54, September.
    27. Philipson, Tomas J & Snyder, James M, Jr, 1996. "Equilibrium and Efficiency in an Organized Vote Market," Public Choice, Springer, vol. 89(3-4), pages 245-265, December.
    28. Palfrey, Thomas R. & Rosenthal, Howard, 1985. "Voter Participation and Strategic Uncertainty," American Political Science Review, Cambridge University Press, vol. 79(1), pages 62-78, March.
    29. Louis Kaplow & Scott Duke Kominers, 2017. "Who will vote quadratically? Voter turnout and votes cast under quadratic voting," Public Choice, Springer, vol. 172(1), pages 125-149, July.
    30. Matthew O Jackson & Hugo F Sonnenschein, 2007. "Overcoming Incentive Constraints by Linking Decisions -super-1," Econometrica, Econometric Society, vol. 75(1), pages 241-257, January.
    31. Dennis Mueller & Geoffrey Philpotts & Jaroslav Vanek, 1972. "The social gains from exchanging votes: A simulation approach," Public Choice, Springer, vol. 13(1), pages 55-79, September.
    32. Thomas Schwartz, 1981. "The universal-instability theorem," Public Choice, Springer, vol. 37(3), pages 487-501, January.
    33. Howard Margolis, 1977. "Probability of a tie election," Public Choice, Springer, vol. 31(1), pages 135-138, September.
    34. Vijay Krishna & John Morgan, 2015. "Majority Rule and Utilitarian Welfare," American Economic Journal: Microeconomics, American Economic Association, vol. 7(4), pages 339-375, November.
    35. Debraj Ray & Rajiv Vohra, 2015. "The Farsighted Stable Set," Econometrica, Econometric Society, vol. 83(3), pages 977-1011, May.
    36. Haefele, Edwin T, 1971. "A Utility Theory of Representative Government," American Economic Review, American Economic Association, vol. 61(3), pages 350-367, June.
    37. Casella, Alessandra & Palfrey, Thomas R., 2021. "Trading votes for votes: A laboratory study," Games and Economic Behavior, Elsevier, vol. 125(C), pages 1-26.
    38. Iaryczower, Matias & Oliveros, Santiago, 2016. "Power brokers: Middlemen in legislative bargaining," Journal of Economic Theory, Elsevier, vol. 162(C), pages 209-236.
    39. Xefteris, Dimitrios & Ziros, Nicholas, 2018. "Strategic vote trading under complete information," Journal of Mathematical Economics, Elsevier, vol. 78(C), pages 52-58.
    40. Riker, William H. & Ordeshook, Peter C., 1968. "A Theory of the Calculus of Voting," American Political Science Review, Cambridge University Press, vol. 62(1), pages 25-42, March.
    41. Ricardo Alonso & Odilon Câmara, 2016. "Persuading Voters," American Economic Review, American Economic Association, vol. 106(11), pages 3590-3605, November.
    42. Martin Pesendorfer, 2000. "A Study of Collusion in First-Price Auctions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 67(3), pages 381-411.
    43. Peter Bernholz, 1973. "Logrolling, arrow paradox and cyclical majorities," Public Choice, Springer, vol. 15(1), pages 87-95, June.
    44. Casella, Alessandra & Palfrey, Thomas & Turban, Sébastien, 2014. "Vote trading with and without party leaders," Journal of Public Economics, Elsevier, vol. 112(C), pages 115-128.
    45. Ben Laurence & Itai Sher, 2017. "Ethical considerations on quadratic voting," Public Choice, Springer, vol. 172(1), pages 195-222, July.
    46. Dennis C. Mueller, 1973. "Constitutional Democracy and Social Welfare," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(1), pages 60-80.
    47. Eguia, Jon & Immorlica, Nicole & Ligett, Katrina & Weyl, Glen & Xefteris, Dimitrios, 2019. "Quadratic voting with multiple alternatives," Working Papers 2019-1, Michigan State University, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Anand Murugesan & Jean-Robert Tyran, 2023. "The Puzzling Practice of Paying “Cash for Votes”," CESifo Working Paper Series 10504, CESifo.
    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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Casella, Alessandra & Macé, Antonin, 2020. "Does Vote Trading Improve Welfare?," CEPR Discussion Papers 15201, C.E.P.R. Discussion Papers.
    2. Casella, Alessandra & Turban, Sébastien, 2014. "Democracy undone. Systematic minority advantage in competitive vote markets," Games and Economic Behavior, Elsevier, vol. 88(C), pages 47-70.
    3. Casella, Alessandra & Palfrey, Thomas & Turban, Sébastien, 2014. "Vote trading with and without party leaders," Journal of Public Economics, Elsevier, vol. 112(C), pages 115-128.
    4. Casella, Alessandra & Palfrey, Thomas R., 2021. "Trading votes for votes: A laboratory study," Games and Economic Behavior, Elsevier, vol. 125(C), pages 1-26.
    5. Nikolas Tsakas & Dimitrios Xefteris & Nicholas Ziros, 2021. "Vote Trading in Power-Sharing Systems: A Laboratory Investigation," The Economic Journal, Royal Economic Society, vol. 131(636), pages 1849-1882.
    6. Hans Gersbach, 2022. "New Forms of Democracy," CESifo Working Paper Series 10134, CESifo.
    7. Chakravarty, Surajeet & Kaplan, Todd R. & Myles, Gareth, 2018. "When costly voting is beneficial," Journal of Public Economics, Elsevier, vol. 167(C), pages 33-42.
    8. Gersbach, Hans & Mamageishvili, Akaki & Tejada, Oriol, 2021. "The effect of handicaps on turnout for large electorates with an application to assessment voting," Journal of Economic Theory, Elsevier, vol. 195(C).
    9. Gersbach, Hans & Mamageishvili, Akaki & Tejada, Oriol, 2019. "The Effect of Handicaps on Turnout for Large Electorates: An Application to Assessment Voting," CEPR Discussion Papers 13921, C.E.P.R. Discussion Papers.
    10. Xefteris, Dimitrios & Ziros, Nicholas, 2018. "Strategic vote trading under complete information," Journal of Mathematical Economics, Elsevier, vol. 78(C), pages 52-58.
    11. Alberto Grillo, 2017. "Risk aversion and bandwagon effect in the pivotal voter model," Public Choice, Springer, vol. 172(3), pages 465-482, September.
    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. Ozgur Evren, 2009. "Altruism, Turnout and Strategic Voting Behavior," Levine's Working Paper Archive 814577000000000309, David K. Levine.
    14. Thomas Schwartz, 1987. "Your vote counts on account of the way it is counted: An institutional solution to the paradox of not voting," Public Choice, Springer, vol. 54(2), pages 101-121, January.
    15. Puppe, Clemens & Rollmann, Jana, 2022. "Participation in voting over budget allocations: A field experiment," Working Paper Series in Economics 155, Karlsruhe Institute of Technology (KIT), Department of Economics and Management.
    16. Alastair Smith & Bruce Bueno de Mesquita & Tom LaGatta, 2017. "Group incentives and rational voting1," Journal of Theoretical Politics, , vol. 29(2), pages 299-326, April.
    17. Antonio Merlo & Thomas R. Palfrey, 2018. "External validation of voter turnout models by concealed parameter recovery," Public Choice, Springer, vol. 176(1), pages 297-314, July.
    18. 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.
    19. Xefteris, Dimitrios, 2019. "Strategic voting when participation is costly," Games and Economic Behavior, Elsevier, vol. 116(C), pages 122-127.
    20. Jon X. Eguia & Dimitrios Xefteris, 2021. "Implementation by Vote-Buying Mechanisms," American Economic Review, American Economic Association, vol. 111(9), pages 2811-2828, September.

    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

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    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:nbr:nberwo:27743. See general information about how to correct material in RePEc.

    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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.