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Strategic vote trading in power-sharing systems

Listed author(s):
  • Dimitrios Xefteris
  • Nicholas Ziros

This paper studies decentralized vote trading in a power-sharing system that follows the rules of strategic market games. In particular, we study a two-party election, in which prior to the voting stage voters are free to trade votes for money. Voters hold private information about both their ordinal and cardinal preferences, whereas their utilities are proportionally increasing in the vote share of their favorite party. In this framework we prove generic existence of a unique full trade equilibrium (an equilibrium in which nobody refrains from vote trading). We moreover argue that vote trading in such systems unambiguously improves voters' welfare.

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File URL: http://papers.econ.ucy.ac.cy/RePEc/papers/01-16.pdf
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Paper provided by University of Cyprus Department of Economics in its series University of Cyprus Working Papers in Economics with number 01-2016.

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Length: 22 pages
Date of creation: Mar 2016
Handle: RePEc:ucy:cypeua:01-2016
Contact details of provider: Web page: http://www.ucy.ac.cy/econ/en

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  1. 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.
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  3. Nicolas Sahuguet & Nicola Persico, 2006. "Campaign spending regulation in a model of redistributive politics," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 28(1), pages 95-124, 05.
  4. Francesco Sinopoli & Giovanna Iannantuoni, 2007. "A spatial voting model where proportional rule leads to two-party equilibria," International Journal of Game Theory, Springer;Game Theory Society, vol. 35(2), pages 267-286, January.
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  6. Humberto Llavador, 2006. "Electoral Platforms, Implemented Policies, and Abstention," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 27(1), pages 55-81, August.
  7. 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.
  8. 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.
  9. Iaryczower, Matias & Oliveros, Santiago, 2016. "Power brokers: Middlemen in legislative bargaining," Journal of Economic Theory, Elsevier, vol. 162(C), pages 209-236.
  10. Shapley, Lloyd S & Shubik, Martin, 1977. "Trade Using One Commodity as a Means of Payment," Journal of Political Economy, University of Chicago Press, vol. 85(5), pages 937-968, October.
  11. David P. Baron & Daniel Diermeier, 2001. "Elections, Governments, and Parliaments in Proportional Representation Systems," The Quarterly Journal of Economics, Oxford University Press, vol. 116(3), pages 933-967.
  12. Duffy, John & Matros, Alexander & Temzelides, Ted, 2011. "Competitive behavior in market games: Evidence and theory," Journal of Economic Theory, Elsevier, vol. 146(4), pages 1437-1463, July.
  13. Huber, Juergen & Shubik, Martin & Sunder, Shyam, 2010. "Three minimal market institutions with human and algorithmic agents: Theory and experimental evidence," Games and Economic Behavior, Elsevier, vol. 70(2), pages 403-424, November.
  14. 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.
  15. Helios Herrera & Massimo Morelli & Thomas Palfrey, 2014. "Turnout and Power Sharing," Economic Journal, Royal Economic Society, vol. 124(574), pages 131-162, 02.
  16. Samuel Merrill & James Adams, 2007. "The effects of alternative power-sharing arrangements: Do “moderating” institutions moderate party strategies and government policy outputs?," Public Choice, Springer, vol. 131(3), pages 413-434, June.
  17. 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.
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