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Let Them Burn Money: Making Elections More Informative

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  • Colin Campbell

    () (Rutgers University)

Abstract

A standard election in which each voter chooses a single alternative permits voters little scope to express the intensity of their preferences. Allowing more complex statements of preferences may not alleviate the problem if voters behave strategically, as only certain statements are credible. I consider the implications of allowing voters to burn money as part of the voting procedure. In an environment with two alternatives and voters with interdependent values, I find necessary and sufficient conditions for all choice functions that are minimally responsive to voter preferences to be implementable with money burning. Furthermore, I show that any choice rule that treats ex-ante identical voters symmetrically can be implemented with an arbitrarily small amount of money burnt per voter as the set of voters is replicated. Thus, for a large electorate, the informational gains of money burning can be reaped at virtually no social cost.

Suggested Citation

  • Colin Campbell, 2005. "Let Them Burn Money: Making Elections More Informative," Departmental Working Papers 200512, Rutgers University, Department of Economics.
  • Handle: RePEc:rut:rutres:200512
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    References listed on IDEAS

    as
    1. Richard McLean & Andrew Postlewaite, 2002. "Informational Size and Incentive Compatibility," Econometrica, Econometric Society, vol. 70(6), pages 2421-2453, November.
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    3. Richard McLean & Andrew Postlewaite, 2004. "Informational Size and Efficient Auctions," Review of Economic Studies, Oxford University Press, vol. 71(3), pages 809-827.
    4. Timothy Feddersen & Wolfgang Pesendorfer, 1997. "Voting Behavior and Information Aggregation in Elections with Private Information," Econometrica, Econometric Society, vol. 65(5), pages 1029-1058, September.
    5. 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.
    6. B. Douglas Bernheim & Michael D. Whinston, 1986. "Menu Auctions, Resource Allocation, and Economic Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 101(1), pages 1-31.
    7. Casella, Alessandra, 2005. "Storable votes," Games and Economic Behavior, Elsevier, vol. 51(2), pages 391-419, May.
    8. Gary S. Becker, 1983. "A Theory of Competition Among Pressure Groups for Political Influence," The Quarterly Journal of Economics, Oxford University Press, vol. 98(3), pages 371-400.
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    More about this item

    Keywords

    Elections; Voting Mechanisms; Interdependent Values; Information Aggregation;

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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