DP10408 Get Rid of Unanimity: The Superiority of Majority Rule with Veto Power

Author(s): Laurent Bouton, Aniol Llorente-Saguer, Frédéric Malherbe
Publication Date: February 2015
Keyword(s): constructive abstention, information aggregation, Pareto criterion, unanimity rule, veto power
JEL(s): D70
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=10408

Consider a group of agents whose goal is to reform the status quo if and only if this is Pareto improving. Agents have private information and may have common or private objectives, which creates a tension between information aggregation and minority protection. We propose a simple voting system -majority rule with veto power- that essentially resolves this tension, for it combines the advantageous properties of both majority and unanimity rules. We argue that our results shed new light on the evolution of voting rules in EU institutions and could guide policy reforms in cases such as juries in the US.