Working Paper: CEPR ID: DP17142
Authors: Hans Peter Grüner
Abstract: IIndividuals living in a contested region are privately informed about their preference for citizenship in two rivalling countries. Not all borders are technically feasible which is why not everybody can live in his preferred country. Monetary transfers are not feasible. When citizens only care about their own citizenship and types are drawn independently, a simple mechanism with simultaneous binary messages implements a social choice function that maximizes the expected sum of local residents' payoffs. This mechanism selects a feasible allocation that maximizes the number of individuals who live in what they say is their preferred country. A strategically simple approval voting mechanism implements the same social choice function but does not require any knowledge about voters' location or the set of feasible outcomes. Sequential voting and electoral competition may instead lead to suboptimal outcomes.
Keywords: mechanism design without transfers; border dispute settlement; voting; approval voting
JEL Codes: D71; D72; D74; F51
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| simple decision mechanism (D91) | constrained optimal social choice (D71) |
| individuals report their preferred citizenship (F22) | allocation that maximizes the number of individuals living in their preferred country (F22) |
| strategically simple approval voting mechanism (D79) | same social choice function (D71) |
| mechanism's design (D47) | welfare outcomes of citizens (I31) |
| sequential voting and electoral competition (D72) | suboptimal outcomes (I14) |
| suboptimal outcomes (I14) | negative effect on social welfare (I38) |