Divided Majority and Information Aggregation: Theory and Experiment

40 Pages Posted: 4 Jun 2013

See all articles by Micael Castanheira

Micael Castanheira

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

Laurent Bouton

Université Libre de Bruxelles (ULB)

Aniol Llorente-Saguer

Queen Mary University of London

Multiple version iconThere are 3 versions of this paper

Date Written: 2013

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.

Suggested Citation

Castanheira, Micael and Bouton, Laurent and Llorente-Saguer, Aniol, Divided Majority and Information Aggregation: Theory and Experiment (2013). EPSA Annual General Conference 2013, Available at SSRN: https://ssrn.com/abstract=2224952

Micael Castanheira (Contact Author)

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)
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Centre for Economic Policy Research (CEPR)

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United Kingdom

Laurent Bouton

Université Libre de Bruxelles (ULB) ( email )

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Brussels, Brussels 1050
Belgium

Aniol Llorente-Saguer

Queen Mary University of London ( email )

Lincoln's Inn Fields
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London, E1 4NS
United Kingdom

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

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