Working Paper: CEPR ID: DP9242
Authors: Alessandra Casella; Sébastien Turban
Abstract: We study the competitive equilibrium of a market for votes where voters can trade votes for a numeraire before making a decision via majority rule. The choice is binary and the number of supporters of either alternative is known. We identify a sufficient condition guaranteeing the existence of an ex ante equilibrium. In equilibrium, only the most intense voter on each side demands votes and each demand enough votes to alone control a majority. The probability of a minority victory is independent of the size of the minority and converges to one half, for any minority size, when the electorate is arbitrarily large. In a large electorate, the numerical advantage of the majority becomes irrelevant: democracy is undone by the market.
Keywords: majority voting; minority; vote buying; vote trading; voting
JEL Codes: C62; C72; D70; D72; P16
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| vote market structure (D72) | likelihood of minority victories (J15) |
| intense voters demand votes (D72) | probability of minority victory converges to one-half (D79) |
| vote trading dynamics (D72) | disruption of traditional majority rule (D72) |
| market allocates decision power (D47) | systematic bias favoring minority (J15) |
| vote trading (D72) | potential inefficiencies in welfare outcomes (D61) |