INDIVIDUALLY RATIONAL DYNAMIC VOTE TRADING

Parkash Chander

The Singapore Economic Review (SER), 2024, vol. 69, issue 04, 1559-1570

Abstract: In this paper, we characterize dynamic trading in a voting model. We show that a dynamic trading process, called the Pivot algorithm, may converge from an initial vote allocation to an allocation which (though Pareto optimal) is not individually rational even in the weakest sense. Then, we propose an intuitive dynamic process which, unlike the Pivot algorithm, always converges from any initial vote allocation to an individually rational Pareto optimal allocation, is Condorcet consistent, and avoids unnecessary vote trading (i.e. trading that does not change the outcome). From a policy perspective, our analysis implies that a vote trade may be permitted only if no voter has objection to the trade. Without such a policy, myopic voters may participate in vote trades that are either unnecessary or eventually make them worse-off.

Keywords: Externalities; individual rationality; dynamic vote trading; Pivot algorithm; Condorcet consistent (search for similar items in EconPapers)
JEL-codes: C62 C72 D70 D72 P16 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S0217590824450103

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