Risky Vote Delegation

Hans Gersbach, Akaki Mamageishvili and Manvir Schneider

No 17044, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study vote delegation and compare it with conventional voting. Typical examples for vote delegation are validation or governance tasks on blockchains and liquid democracy. There is a majority of "well-behaving" agents, but they may abstain or delegate their vote to other agents since voting is costly. "Misbehaving" agents always vote. Preferences of agents are private information and a positive outcome is achieved if well-behaving agents win. Vote delegation can lead to quite different outcomes than conventional voting. For instance, if the number of misbehaving voters, denoted by f, is high, both voting methods fail to deliver a positive outcome. If the number of misbehaving voters takes an intermediate value, conventional voting delivers a positive outcome, while vote delegation fails with probability one. However, if f is low, we show by numerical simulations that delegation delivers a positive outcome with higher probability than conventional voting. Our results also provide insights in worst-case outcomes that can happen in a liquid democracy.

Keywords: Costly; voting; -; delegation; -; rational; voters; -; governance; -; liquid; democracy; -; blockchain (search for similar items in EconPapers)
JEL-codes: C72 D71 D72 D8 (search for similar items in EconPapers)
Date: 2022-02
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