Mean versus median voting in multi-dimensional budget allocation problems. A laboratory experiment

Clemens Puppe and Jana Rollmann

Games and Economic Behavior, 2021, vol. 130, issue C, 309-330

Abstract: We experimentally compare two natural mechanisms for the collective choice of an allocation of a fixed budget to a number of divisible public projects: the mean rule that implements the average of all individual proposals, and a suitably normalized median rule. Theoretical results predict extreme voting behavior in equilibrium under the mean rule and frequently sincere voting under the normalized median rule. Our findings confirm equilibrium behavior under the mean rule in situations in which the equilibrium strategies are easily identifiable. The empirical results for the normalized median rule are multifaceted. While we also find that many individuals play best responses, remarkably these are rarely sincere. Nevertheless, we find that the normalized median rule enjoys significantly better welfare properties than the mean rule.

Keywords: Voting behavior; Budget allocation; Mean rule; Normalized median rule (search for similar items in EconPapers)
JEL-codes: D71 D72 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:130:y:2021:i:c:p:309-330

DOI: 10.1016/j.geb.2021.08.008

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