Working Paper: CEPR ID: DP11127
Authors: Hans Peter Grüner; Thomas Tröger
Abstract: How should a society choose between two social alternatives if participation in the decision process is voluntary and costly and monetary transfers are not feasible? Considering symmetric voters with private valuations, we show that it is utilitarian-optimal to use a linear voting rule: votes get alternative-dependent weights, and a default obtains if the weighted sum of votes stays below some threshold. Standard quorum rules are not optimal. We develop a perturbation method to characterize equilibria in the case of small participation costs and show that leaving participation voluntary increases welfare for linear rules that are optimal under compulsory participation.
Keywords: mechanism design; optimal voting rules; costly voting; compulsory voting; quorum rules
JEL Codes: D71; D72
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| linear voting rule (D72) | welfare outcomes (I38) |
| deviating from standard quorum rules (D72) | welfare outcomes (I38) |
| voluntary participation (Z22) | welfare outcomes (I38) |
| compulsory participation (D70) | welfare outcomes (I38) |