 Brexit: A comparison of dynamic voting games with irreversible optionsBenny Moldovanu and Frank Rosar Games and Economic Behavior, 2021, vol. 130, issue C, 85-108 Abstract: A large polarized electorate decides repeatedly between a reversible alternative (REMAIN) and an irreversible alternative (LEAVE) in an environment where the aggregate short-term effects of the decision vary from period to period. Decisions by simple majority or by a too low supermajority may perform poorly under circumstances where it is socially optimal to never LEAVE, as they can exhibit equilibria where LEAVE is chosen quickly. In general, a too low supermajority rule can have much higher welfare costs than a too high supermajority rule. If REMAIN also becomes permanent when it wins by a large enough margin, and if a new vote is triggered otherwise, particularly poor performances of the simple majority rule are avoided. The large asymmetry in potential welfare costs disappears, and the majority requirement becomes a relatively less important instrument. Keywords: Dynamic voting; Irreversible option; Option value; Supermajority rules; Voting by two-sided supermajority (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:130:y:2021:i:c:p:85-108 DOI: 10.1016/j.geb.2021.07.011 Access Statistics for this article Games and Economic Behavior is currently edited by E. Kalai More articles in Games and Economic Behavior from Elsevier |
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