The 'Invisible Hand' of Vote Markets

Dimitrios Xefteris and Nicholas Ziros

University of Cyprus Working Papers in Economics from University of Cyprus Department of Economics

Abstract: This paper studies electoral competition between two non-ideological parties when voters are free to trade votes for money. We find that allowing for vote trading has significant policy consequences, even if trade does not actually take place in equilibrium. In particular, the parties' equilibrium platforms are found to converge (hence, there is no reason for vote trading) to the ideal policy of the mid-range voter, instead of converging to the peak of the median voter (as they do when vote trading is forbidden). That is, a market for votes may not change the outcome only by redistributing the political power among voters when the parties' policy proposals are fixed (e.g., Casella, Llorente-Saguer, and Palfrey, 2012, etc.), but also by acting as an invisible hand - modifying parties' incentives when platform choice is endogenous.

Keywords: Electoral competition; invisible hand; vote markets; mid-range voter; Downsian model (search for similar items in EconPapers)
JEL-codes: D72 (search for similar items in EconPapers)
Pages: 16 pages
Date: 2022-05-27, Revised 2023-07-04
New Economics Papers: this item is included in nep-cdm, nep-mic and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://papers.econ.ucy.ac.cy/RePEc/papers/05-2022.pdf (application/pdf)

Related works:
Journal Article: The “invisible hand” of vote markets (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucy:cypeua:05-2022

Access Statistics for this paper

More papers in University of Cyprus Working Papers in Economics from University of Cyprus Department of Economics
Bibliographic data for series maintained by ().