Approximate implementation of Relative Utilitarianism via Groves-Clarke pivotal voting with virtual money

Marcus Pivato

MPRA Paper from University Library of Munich, Germany

Abstract: `Relative Utilitarianism' (RU) is a version of classical utilitarianism, where each person's utility function is rescaled to range from zero to one. As a voting system, RU is vulnerable to preference exaggeration by strategic voters. The Groves-Clarke Pivotal Mechanism elicits truthful revelation of preferences by requiring each voter to `bid' a sum of real money to cast a pivotal vote. However, this neglects wealth effects and gives disproportionate power to rich voters. We propose a variant of the Pivotal Mechanism using fixed allotments of notional `voting money'; this `Voting Money Pivotal Mechanism' (VMPM) is politically egalitarian and immune to wealth effects. In the large-population limit, the only admissible (i.e. weakly undominated) voting strategies in the VMPM are approximately truthful revelations of preferences; thus the VMPM yields an arbitrarily close approximation of RU.

Keywords: Relative Utilitarianism; Groves-Clarke; pivotal mechanism; demand-revealing mechanism; voting dollars; point voting (search for similar items in EconPapers)
JEL-codes: D63 D71 (search for similar items in EconPapers)
Date: 2006-10-30
New Economics Papers: this item is included in nep-cdm, nep-pol and nep-upt
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