Econ 452

Voting

Voting rules: (Dixit and Skeath, ch 14)

Recall parkland provision decision:
Assume
- n=10;
- total cost of proposed parkland=38;
- if provided, each pays equal share = 3.8
- there are two groups of individuals in
society: 8 have 1 = 1, and remaining 2
have 2 = 16.
So: efficient to provide public good, since
sum of benefits (40) > total cost (38).
Suppose held a referendum on provision;
would parkland be provided (with this financing
scheme)?
Depends.on voting scheme used.
Possible schemes?

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Econ 452
Voting

General: classifiy vote aggregation methods

by number of options or candidates at any time:
three types:
A. Binary: two alternatives
- if only two, aggregate votes by majority
rule;
- if more than two: sequence of pairwise
votes, winner by majority rule;
- types?
1. Condorcet method: round robin;
overall winner is the one who defeats
all others in pairwise contests.
2. successive elimination (various
indices)
B. Plurative methods: simultaneously
consider multiple options
1. plurality rule:
- each voter has one vote;
- candidate with most votes wins;
- plurality may be less than majority

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Econ 452
Voting

2. Borda count:
- voters rank order all options
- assign points to each, based on own
ranking
- if 3 alternatives, then most preferred
gets 3 points, least preferred gets 1
- sum points across voters - highest
wins
3. Approval voting:
- vote for any, and all, of which
approve;
- winner(s): highest number of votes
C Mixed methods
- multistage
- combine binary and plurative
Voting paradoxes:
1. Condorcet Paradox:
intransitivity of social ordering
- best known (among economists)
- may be no winner - that is, no alternative
which is successful against all others:
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Econ 452
Voting

Example: suppose three individuals

(1,2,3) choosing one of three options
(A,B,C); preferences are
- Ind'l 1: A ; B ; C
- Ind'l 2: B ; C ; A
- Ind'l 3: C ; A ; B
Results? A wins in (A,B); B wins in (B,C);
C wins in (A,C)
- social ordering: A ; B ; C ; A

1
A
B
C
D

2. Reversal Paradox:
- from Borda count: when slate of
candidates changes after votes, and new
vote held
- need at least 4 candidates (A,B,C,D)
- Suppose 7 voters
2
3
4
5
6
7
D
A
B
D
D
B
A
B
C
A
A
C
B
C
D
B
B
D
C
D
A
C
C
A

- With all four options, winner is A:

A: 2*4 + 3*3 + 2*1=19 B: 2*4 + 2*3 + 3*1=15
C: 2*3 + 2*2 + 3*1=13 D: 3*4 + 2*2 + 2*1=18
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Econ 452
Voting

Now: suppose discovered that C not valid

alternative - vote again, with A,B,D on ballot
(same voters):
1
A
B
D

2
D
A
B

3
A
B
D

4
B
D
A

5
D
A
B

6
D
A
B

7
B
D
A

Now, winner is D:
A: 2*3 + 3*2 + 2*1=14
B: 2*3 + 2*2 + 3*1=13
D: 3*3 + 2*2 + 2*1=15
(eliminated an irrelevant alternative?)
3. Agenda Paradox:
- binary elections - winner goes on, loser
doesn't
- matters who meets whom first.
4. Different methods give different outcomes
Example: 100 voters, in 3 distinct groups:
40: A ; B ; C
25: B ; C ; A
35: C ; B ; A
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Econ 452
Voting

Who wins election?

a) plurality: A
b) Borda count: each voter assigns
numbers 1,2,3 to candidates - 3
indicating "most preferred"
A obtains 40x3 + 60x1 = 180
B "
25x3 + 75x2 = 225
C "
35x3 + 25x2 + 40x1 = 195
Hence B wins.
c) Majority run-off: use first round to
eliminate one alternative (lowest
number of votes); second round pairs
top two from first round. Here, C wins.
Is there a "best", reasonable voting rule?
No.

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Econ 452
Voting

Arrow's "impossibility theorem"

Six criteria for aggregation of preferences
1. complete ranking
2. transitive ranking
3. Pareto property: unanimous
preferences within population
reflected in social ranking
4. ranking not independent of
preferences of individuals in soc'y
5. ranking not dictatorial - not the
reflection of the preferences of one
individual
6. independent of irrelevant alternatives
Theorem? no such ranking exists.
How to choose between flawed
mechanisms? One criterion is manipulability
- how easy is it to affect outcome by
strategic voting - not voting in accord with
own preferences, to produce a result which
is more in accord with preferences.

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Econ 452
Voting

Consider a voting game in which 3 players

(denoted 1, 2, and 3) are deciding among
three alternatives (A, B, and C). Alternative
B is the "status quo" and alternatives A and
C are "challengers". In the first stage,
players choose which of the two challengers
should be considered; they do this by
casting votes for either A or C, with the
majority choice being the winner and
abstentions not allowed. In the second
stage, players vote between the status quo
(B) and the winner of the first stage, with
majority rule again determining the winner.
The players care only about the alternative
that is finally selected. The payoffs are
u1 ( A) = u2 ( B) = u3 (C ) = 2;
u1 ( B) = u2 (C ) = u3 ( A) = 0;
u1 (C ) = u2 ( A) = u3 ( B) = 1.

Suppose that at each stage each player votes

for the alternative they most prefer as the final
outcome.
a) What would the outcome be? Do these
strategies constitute a Nash equilibrium?

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