DP14101 Brexit: Dynamic Voting with an Irreversible Option
We analyze Brexit-like decisions in a polarized society. An electorate decides repeatedly be-tween a reversible alternative (REMAIN) and an irreversible alternative (LEAVE). We comparestrengths and weaknesses of several mechanisms that can be used in reality. Voting by super-majority dominates voting by simple majority. Decisions by simple majority and by a toosmall supermajority can perform very poorly under circumstances where it is socially optimalto never LEAVE, as they can exhibit equilibria where LEAVE is chosen very quickly. Mechanisms where LEAVE requires (super)majorities in two consecutive periods avoid this problemwithout relying on fine-tuning, but can lead to inefficient delays. If a final decision for eitheralternative requires winning by a certain margin, and if a new vote is triggered otherwise, bothproblems, choosing LEAVE too easily and inefficient delays, can oftenbe avoided.