Working Paper: CEPR ID: DP15201
Authors: Alessandra Casella; Antonin Mace
Abstract: Voters have strong incentives to increase their influence by trading votes, a practice indeed believed to be common. But is vote trading welfare-improving or welfare-decreasing? We review the theoretical literature and, when available, its related experimental tests. We begin with the analysis of logrolling -- the exchange of votes for votes, considering both explicit vote exchanges and implicit vote trades engineered by bundling issues in a single bill. We then focus on vote markets, where votes can be traded against a numeraire. We cover competitive markets, strategic market games, decentralized bargaining, and more centralized mechanisms, such as quadratic voting, where votes can be bought at a quadratic cost. We conclude with procedures allowing voters to shift votes across decisions -- to trade votes with oneself only -- such as storable votes or a modified form of quadratic voting. We find that vote trading and vote markets are typically inefficient; more encouraging results are obtained by allowing voters to allocate votes across decisions.
Keywords: logrolling; voting; vote markets; storable votes; quadratic voting; bundling
JEL Codes: D6; D71; D72
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| vote trading (D72) | negative welfare outcomes (I30) |
| vote markets (D72) | negative welfare outcomes (I30) |
| vote trading (D72) | Pareto inferior outcomes (D63) |
| logrolling (D72) | welfare improvements (I38) |
| competitive vote markets (D72) | welfare improvements (I38) |
| quadratic voting (D72) | favorable outcomes (P17) |
| storable votes (D72) | favorable outcomes (P17) |