Democracy undone. Systematic minority advantage in competitive vote markets

Alessandra Casella and Sébastien Turban

Games and Economic Behavior, 2014, vol. 88, issue C, 47-70

Abstract: We study the competitive equilibrium of a market for votes where the choice is binary and it is known that a majority of the voters supports one of the two alternatives. Voters can trade votes for a numeraire before making a decision via majority rule. We identify a sufficient condition guaranteeing the existence of an ex ante equilibrium. In equilibrium, only the most intense voter on each side demands votes, and each demands enough votes to alone control a majority. The equilibrium strongly resembles an all-pay auction for decision power: it makes clear that votes are only a medium for the allocation of power. The probability of a minority victory is always higher than efficient and converges rapidly to one-half as the electorate increases, for any minority size. The numerical advantage of the majority becomes irrelevant: democracy is undone by the market.

Keywords: Voting; Majority voting; Markets for votes; Vote trading; Competitive equilibrium (search for similar items in EconPapers)
JEL-codes: C62 C72 D70 D72 P16 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Related works:
Working Paper: Democracy Undone. Systematic Minority Advantage in Competitive Vote Markets (2012)
Working Paper: Democracy Undone. Systematic Minority Advantage in Competitive Vote Markets (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:88:y:2014:i:c:p:47-70

DOI: 10.1016/j.geb.2014.07.002

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