An optimal Voting System when Voting is costly
We consider the design of an optimal voting system when voting is costly. For a private values model with two alternatives we show the optimality of a voting system that combines three elements: (i) there is an arbitrarily chosen default decision and non-participation is interpreted as a vote in favor of the default; (ii) voting is sequential; (iii) not all voters are invited to participate in the vote. We show the optimality of such a voting system by first arguing that it is first best, that is, it maximizes welfare when incentive compatibility constraints are ignored, and then showing that individual incentives and social welfare are sufficiently aligned to make the first best system incentive compatible. The analysis in this paper involves some methods that are new to the theory of mechanism design, and it is also a purpose of this paper to explore these new methods.
|Date of creation:||Oct 2010|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Bergemann, Dirk & Välimäki, Juuso, 2006.
"Information in Mechanism Design,"
CEPR Discussion Papers
5494, C.E.P.R. Discussion Papers.
- Dirk Bergemann & Juuso Valimaki, 2005. "Information in Mechanism Design," Cowles Foundation Discussion Papers 1532, Cowles Foundation for Research in Economics, Yale University.
- Dirk Bergemann & Juuso Valimaki, 2005. "Information in Mechanism Design," Cowles Foundation Discussion Papers 1532R, Cowles Foundation for Research in Economics, Yale University, revised Jan 2006.
- Gershkov, Alex & Szentes, Balázs, 2009.
"Optimal voting schemes with costly information acquisition,"
Journal of Economic Theory,
Elsevier, vol. 144(1), pages 36-68, January.
- Alex Gershkov & Balazs Szentes, 2004. "Optimal Voting Schemes with Costly Information Acquisition," NajEcon Working Paper Reviews 122247000000000311, www.najecon.org.
- Sayantan Ghosal & Ben Lockwood, 2009. "Costly voting when both information and preferences differ: is turnout too high or too low?," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 33(1), pages 25-50, June.
- Tilman Börgers, 2001.
NajEcon Working Paper Reviews
- Martin J. Osborne & Ariel Rubinstein, 1994.
"A Course in Game Theory,"
MIT Press Books,
The MIT Press,
edition 1, volume 1, number 0262650401, March.
- Dirk Bergemann & Juuso Valimaki, 2002.
"Information Acquisition and Efficient Mechanism Design,"
Econometric Society, vol. 70(3), pages 1007-1033, May.
- Dirk Bergemann & Juuso Vaimaki, 2000. "Information Acquisition and Efficient Mechanism Design," Cowles Foundation Discussion Papers 1248, Cowles Foundation for Research in Economics, Yale University.
- Roger B. Myerson, 1984.
"Multistage Games with Communication,"
590, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Stegeman, Mark, 1996. "Participation Costs and Efficient Auctions," Journal of Economic Theory, Elsevier, vol. 71(1), pages 228-259, October.
- Celik, Gorkem & Yilankaya, Okan, 2005.
"Optimal Auctions with Simultaneous and Costly Participation,"
Microeconomics.ca working papers
celik-05-05-09-03-55-40, Vancouver School of Economics, revised 09 Jun 2006.
- Celik Gorkem & Yilankaya Okan, 2009. "Optimal Auctions with Simultaneous and Costly Participation," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 9(1), pages 1-33, July.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:29123. 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: (Joachim Winter)
If references are entirely missing, you can add them using this form.