Ghosal, Sayantan and Lockwood, Ben (2003) Information aggregation, costly voting and common values. Working Paper. University of Warwick, Department of Economics, Coventry.

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Abstract

In a model of majority voting with common values and costly but voluntary participation, we show that in the vicinity of equilibrium, it is always Pareto-improving for more agents, on the average, to vote. This demonstrates that the negative voting externality identified by Borgers(2001) in the context of private values is always dominated by a positive informational externality. In addition, we show that multiple Pareto-ranked voting equilibria may exist and moreover, majority voting with compulsory participation can Pareto dominate majority voting with voluntary participation. Finally, we show that the inefficiency result is robust to limited preference heterogeneity.

Item Type:	Working or Discussion Paper (Working Paper)
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	Voting research, Equilibrium (Economics), Externalities (Economics), Voting, Compulsory, Distribution (Economic theory)
Series Name:	Warwick economic research papers
Publisher:	University of Warwick, Department of Economics
Place of Publication:	Coventry
Date:	January 2003
Number:	No.670
Number of Pages:	21
Status:	Not Peer Reviewed
Access rights to Published version:	Restricted or Subscription Access
Version or Related Resource:	Later published in a revised form as: Ghosal, S. and Lockwood, B. (2009). Costly voting when both information and preferences differ: is turnout too high or too low? Social Choice and Welfare, 33(1), pp. 25-50. http://wrap.warwick.ac.uk/28084/
References:	[1] Austen-Smith, D. and J.S. Banks (1996), “ Information Aggregation, Rationality and the Condorcet jury theorem”, American Political Science Review, 90, pp.34-45. [2] Borgers, T. (2001), “ Costly Voting”, mimeo, University College London. [3] Dekel, E. and M. Piccione (2000), “ Sequential Voting Procedures in Symmetric Binary Elections”, Journal of Political Economy, 108(1), pp.34-55. [4] Feddersen, T and W. Pessendorfer (1996), “ The Swing Voter’s Curse”, American Economic Review, 86(3), pp.3408-424. [5] Feddersen, T andW. Pessendorfer (1997), “Voting Behavior and Information Aggregation in Elections with Private Information”, Econometrica, 65(5), pp.1029-1058. [6] Feddersen, T and W. Pessendorfer (1998) “Convicting the Innocent: the Inferiority of Unanimuous Jury Verdicts under Strategic Voting”, American Political Science 92(1), pp.25-35. [7] Hadar,J. and W.R.Russell (1969), “Rules for Ordering Uncertain Prospects”, American Economic Review, 59(1), pp. 25-34. [8] Lohmann, S. (1994), “ Information Aggregation with Costly Political Action”, American Economic Review, 84(1), pp.518-530. [9] Osborne, M. and J. Rosenthal and M. Turner (2000), “Meetings with Costly Participation”, American Economic Review, 90(4), pp.927-943. [10] Persico, N., (2001), “Committee Design with Endogeous Information”, Review of Economic Studies , forthcoming [11] Rothschild, M. and Stiglitz, J. (1970), “ Increasing Risk I: A definition”, Journal of Economic Theory, 2, pp.225-243.
URI:	http://wrap.warwick.ac.uk/id/eprint/1519

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