DP17044 Risky Vote Delegation

Author(s): Hans Gersbach, Akaki Mamageishvili, Manvir Schneider
Publication Date: February 2022
Keyword(s): Costly voting - Delegation - Rational voters - Governance - Liquid democracy - Blockchain
JEL(s): C72, D71, D72, D8
Programme Areas: Public Economics, Industrial Organization, Organizational Economics, Political Economy
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=17044

We study vote delegation and compare it with conventional voting. Typical examples for vote delegation are validation or governance tasks on blockchains and liquid democracy. There is a majority of "well-behaving" agents, but they may abstain or delegate their vote to other agents since voting is costly. "Misbehaving" agents always vote. Preferences of agents are private information and a positive outcome is achieved if well-behaving agents win. Vote delegation can lead to quite different outcomes than conventional voting. For instance, if the number of misbehaving voters, denoted by f, is high, both voting methods fail to deliver a positive outcome. If the number of misbehaving voters takes an intermediate value, conventional voting delivers a positive outcome, while vote delegation fails with probability one. However, if f is low, we show by numerical simulations that delegation delivers a positive outcome with higher probability than conventional voting. Our results also provide insights in worst-case outcomes that can happen in a liquid democracy.