Divided Majority and Information Aggregation: Theory and Experiment

59 Pages Posted: 8 Dec 2012

See all articles by Laurent Bouton

Laurent Bouton

Université Libre de Bruxelles (ULB)

Micael Castanheira

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES); Centre for Economic Policy Research (CEPR)

Aniol Llorente-Saguer

Queen Mary University of London

Multiple version iconThere are 3 versions of this paper

Date Written: November 1, 2012

Abstract

This paper both theoretically and experimentally studies the properties of plurality and approval voting when the majority is divided as a result of information imperfections. The minority backs a third alternative, which the majority views as strictly inferior. The majority thus faces two problems: aggregating information and coordinating to defeat the minority candidate. Two types of equilibria coexist under plurality: either voters aggregate information, but this requires splitting their votes, or they coordinate but cannot aggregate information. With approval voting, expected welfare is strictly higher, because some voters multiple vote to achieve both goals at once. In the laboratory, we observe both types of equilibrium under plurality. Which one is selected depends on the size of the minority. Approval voting vastly outperforms plurality. Finally, subject behavior suggests the need to study asymmetric equilibria.

Keywords: Experiments, Multicandidate Elections, Plurality, Approval Voting

JEL Classification: C92, C72, D70, P16

Suggested Citation

Bouton, Laurent and Castanheira, Micael and Llorente-Saguer, Aniol, Divided Majority and Information Aggregation: Theory and Experiment (November 1, 2012). MPI Collective Goods Preprint, No. 2012/20, Available at SSRN: https://ssrn.com/abstract=2184239 or http://dx.doi.org/10.2139/ssrn.2184239

Laurent Bouton

Université Libre de Bruxelles (ULB) ( email )

CP 132 Av FD Roosevelt 50
Brussels, Brussels 1050
Belgium

Micael Castanheira

Université Libre de Bruxelles (ULB) - European Center for Advanced Research in Economics and Statistics (ECARES) ( email )

Ave. Franklin D Roosevelt, 50 - C.P. 114
Brussels, B-1050
Belgium
+32 2 650 4467 (Phone)
+32 2 650 3369 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Aniol Llorente-Saguer (Contact Author)

Queen Mary University of London ( email )

Lincoln's Inn Fields
Mile End Rd.
London, E1 4NS
United Kingdom

HOME PAGE: http://https://sites.google.com/site/aniollls/

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