Complete Information Pivotal-Voter Model with Asymmetric Group Size and Asymmetric Beneï¬ ts

Christos Mavridis and Marco Serena

Working Papers from Max Planck Institute for Tax Law and Public Finance

Abstract: We analyse a standard pivotal-voter model under majority rule, with two rival groups of players, each preferring one of two public policies and simultaneously deciding whether to cast a costly vote, as in Palfrey and Rosenthal (1983). We allow the beneï¬ t of the favorite public policy to differ across groups and impose an intuitive reï¬ nement, namely that voting probabilities are continuous in the cost of voting to pin down a unique equilibrium. The unique cost-continuous equilibrium depends on a key threshold that compares the sizes of the two groups.

Pages: 45 pages
Date: 2019-11
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