DP11127 Optimal voting mechanisms with costly participation and abstention

Author(s): Hans Peter Grüner, Thomas Tröger
Publication Date: February 2016
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Programme Areas: Public Economics
Link to this Page: www.cepr.org/active/publications/discussion_papers/dp.php?dpno=11127

How should a society choose between two social alternatives when valuations are private, monetary transfers are not feasible, and participation in the decision process is costly? We show that it is always socially optimal to use a linear voting rule: votes get alternative-dependent weights, and a default obtains if the weighted sum of votes stays below some threshold. A participation or approval quorum rule can be optimal only if one side of the electorate abstains. In the case of small participation costs, we characterize the equilibria of linear voting rules and solve for welfare-maximizing rules. Voluntary voting always dominates compulsory voting. If (and only if) the heterogeneity of preference intensities across the electorate is small, in the optimum essentially only one side of the electorate participates.