Competitive Equilibrium in Markets for Votes

Alessandra Casella, Aniol Llorente-Saguer and Thomas Palfrey

No 16315, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We develop a competitive equilibrium theory of a market for votes. Before voting on a binary issue, individuals may buy and sell their votes with each other. We define the concept of Ex Ante Vote-Trading Equilibrium, identify weak sufficient conditions for existence, and construct one such equilibrium. We show that this equilibrium must always result in dictatorship and the market generates welfare losses, relative to simple majority voting, if the committee is large enough. We test the theoretical implications by implementing a competitive vote market in the laboratory using a continuous open-book multi-unit double auction.

JEL-codes: C72 C92 D70 P16 (search for similar items in EconPapers)
Date: 2010-08
New Economics Papers: this item is included in nep-cdm and nep-gth
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Published as Alessandra Casella & Aniol Llorente-Saguer & Thomas R. Palfrey, 2012. "Competitive Equilibrium in Markets for Votes," Journal of Political Economy, University of Chicago Press, vol. 120(4), pages 593 - 658.

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Related works:
Working Paper: Competitive Equilibrium in Markets for Votes (2012)
Working Paper: Competitive Equilibrium in Markets for Votes (2010)
Working Paper: Competitive equilibrium in Markets for Votes (2010)
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