Working Paper: NBER ID: w21645
Authors: Alessandra Casella; Thomas Palfrey
Abstract: Vote-trading is common practice in committees and group decision-making. Yet we know very little about its properties. Inspired by the similarity between the logic of sequential rounds of pairwise vote-trading and matching algorithms, we explore three central questions that have parallels in the matching literature: (1) Does a stable allocation of votes always exists? (2) Is it reachable through a decentralized algorithm? (3) What welfare properties does it possess? We prove that a stable allocation exists and is always reached in a finite number of trades, for any number of voters and issues, for any separable preferences, and for any rule on how trades are prioritized. Its welfare properties however are guaranteed to be desirable only under specific conditions. A laboratory experiment confirms that stability has predictive power on the vote allocation achieved via sequential pairwise trades, but lends only weak support to the dynamic algorithm itself.
Keywords: vote trading; decentralized algorithms; matching theory; welfare properties
JEL Codes: C92; D72
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| number of trades (F19) | existence of stable allocations (D51) |
| pivot algorithms (Y10) | stable allocation (D51) |
| structure of preferences and nature of proposals (D11) | desirable welfare properties of stable allocation (D63) |
| trading mechanism structure (D47) | stability of outcomes (C62) |