Lindahl meets Condorcet?

Sayantan Ghosal and Łukasz Woźny

Working Papers from Business School - Economics, University of Glasgow

Abstract: Although a Condorcet winner commands a majority in its favor, there is no guarantee of unanimity. In a Lindahl equilibrium, a suitably chosen system of personalized transfers and prices ensures unanimity, but there is no guarantee of a majority vote in its favor. Do Lindahl equilibria decentralize Condorcet winners? In a setting where voters’ preferences are satiated, characterized by bliss points, this paper proposes a new balancedness condition which is satisfied when a Condorcet winner lies within the interior of the convex hull of voters’ bliss points. We show that such a political compromise between the most preferred policies of different voter types can be decentralized as Lindahl equilibria.

Keywords: Bliss points; Condorcet winner; Lindahl equilibria, balancedness. (search for similar items in EconPapers)
JEL-codes: D50 D61 D71 (search for similar items in EconPapers)
Date: 2024-09
New Economics Papers: this item is included in nep-des, nep-mic and nep-pol
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Persistent link: https://EconPapers.repec.org/RePEc:gla:glaewp:2024_08

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