Discussion Paper Details

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Title: Democracy Undone. Systematic Minority Advantage in Competitive Vote Markets

Author(s): Alessandra Casella and Sébastien Turban

Publication Date: December 2012

Keyword(s): majority voting, minority, vote buying, vote trading and voting

Programme Area(s): Public Economics

Abstract: We study the competitive equilibrium of a market for votes where voters can trade votes for a numeraire before making a decision via majority rule. The choice is binary and the number of supporters of either alternative is known. We identify a sufficient condition guaranteeing the existence of an ex ante equilibrium. In equilibrium, only the most intense voter on each side demands votes and each demand enough votes to alone control a majority. The probability of a minority victory is independent of the size of the minority and converges to one half, for any minority size, when the electorate is arbitrarily large. In a large electorate, the numerical advantage of the majority becomes irrelevant: democracy is undone by the market.

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Bibliographic Reference

Casella, A and Turban, S. 2012. 'Democracy Undone. Systematic Minority Advantage in Competitive Vote Markets'. London, Centre for Economic Policy Research.