Voting Game

Prof.
Yeşim Kuştepeli ECO 4413 Game Theory

VOTING GAMES
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OUTLINE
Prof. Yeşim Kuştepeli ECO 4413 Game Theory

 Choosing Among Voting Mechanisms
 Majority Rule with Two Choices
 Plurality Rule and the Condorcet Candidate
 A Modified Plurality Rule: The Single

Transferable Vote
 Strategic Voting with Plurality Rule
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 The individual is a consumer: individuals
demand a variety of consumption goods
and services from which they drive
welfare.
 The individual provides productive
Theory
Prof. Yeşim Kuştepeli ECO 4413 Game
services: the most obvious resource
provided by the individual is labor.
 The individual participates in the
political process: by voting and other
political activities, the individual
expresses his or her preferences
regarding the government’s provision of
goods and services.
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 The acceptance or rejection by a
corporation’s broad of directors of merger
offer tendered by competing firm.
 Theacceptance or rejection by a union’s
Theory
rank and file of the labor contract
negotiated by union’s officers.
 Theacceptance or rejection by a state’s

voters of proposal to issue new bonds with
which to build new roads and bridges.
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 The outcome of any vote depends on the
voting rules and the ballots submitted by
voters. Voting is a type of game and
amenable to game theoretical analysis.
Theory
 Ifthe secret ballots are used, then the
voters are playing a static game.
 Strategicallysophisticated voter realize

that it may not always be optimal to vote
sincerely.
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TWO DIFFERENT MODELS OF VOTER:
 Naive voter: he always casts his ballot honestly,
even when it is not in his best interest to do so.
Theory
 Strategic voter: she always casts her ballot so
as to obtain the best outcome possible given her
information, the voting rules, and her beliefs
about how the other voters will behave.
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CHOOSING AMONG VOTING MECHANISMS
 Plurality voting: ballots are prepared which
voters choose only one of the candidate and
vote for him.
Theory
 After the election, these ballots are tallied
(counted) and the person receiving the largest
number of votes is declared the winner.
 This voting mechanism most commonly used

to make public decision or to elect political
candidates.
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 Approval voting: voters could be allowed to
vote for as many candidates as they approve of.
The ballots are tallied and the candidate
receiving the highest number of approval votes
is declared the winner.
Theory
 Social choice mechanism (SCM): voting is
just one procedure the members of a group could
use to from a “collective” ranking of a group of
candidates on the basis of their individual
rankings. We will refer to any such mechanism
as a Social choice mechanism
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ARROW’S IMPOSSIBILITY THEOREM:
 There is no social choice mechanism that

simultaneously satisfies the Pareto condition ,
the independence of irrelevant alternatives
Theory
condition, and the transitivity with unlimited
domain condition, and is also non-dictatorial.
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ARROW’S REQUIREMENTS:
1) No candidate is ranked higher by every member of the group
than the candidate ranked highest by SCM.
2) The ranking provided by the SCM is always complete and
Theory
transitive whenever the ranking of every member of the
group is complete and transitive.
3) The relative ranking of any two candidates provided by the

SCM depends on only the individual rankings. It does not
depend on how these two candidates are ranked against
any other candidates.
4) The SCM is not a dictatorship. There is no individual whose

ranking always matches the ranking of the SCM,
whatever the ranking of the other members of the group
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MAJORITY RULE WITH TWO CHOICES
 Majority rule: the winner is the candidate

who receives more than half of the votes
cast. And the winner of election is that
Theory
candidate who receives the most votes.
 In an election between two candidates

decided by a majority rule, all voters will
rationally abstain or vote honestly for their
most preferred candidate.
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WE WILL STUDY THE BEHAVIOR OF
VOTING RULES ASSUMING THAT:
 all voters are well informed

 their preferences are common knowledge
Theory
 they take voting mechanism
 the slate of candidates as given
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CANDIDATE AND VOTER LOCATIONS ON
LEFT-TO-RIGHT SCALE
Theory
Location of voter
Location of
candidate A Location of
candidate B
0 0,30 0,39 1
0,35
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 Candidate Position Game: the candidates are
assumed to choose their positions simultaneously
and cannot budge from that choice once it is made.
We will also suppose that voter preferences and
candidates objectives are common knowledge. We
will refer to the resulting game as the Candidate
Theory
Position Game.
 Positioning at 0.50 is a weakly dominant strategy

for both candidates, and so both candidates
positioning themselves at 0.50. This is also the
unique Nash equilibrium for this game.
 0.50 is the position of the median voter. candidates’

positions converge to the position of the median
voter.
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 The Median Voter Theorem: if there
are two candidates, the two candidates’
political positions can be represented by
their location on a continuous linear
scale, each voter’s preference over these
positions is singe-peaked, the
Theory
distribution of voter preferences is
common knowledge, and the election is
decided by majority rule; then the unique
Nash equilibrium strategy in the
Candidate position game is both
candidates to position themselves at the
median voter’s position.
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DISTRIBUTION OF VOTER
PREFERENCES
Theory
Voter
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0
position
Number of
36 15 10 8 5 3 1 2 3 5 13
voters
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PLURALITY RULE AND THE CONDORCET
CANDIDATE
 A candidate who is preferred by a majority of
voters to any other alternative in a series of
pairwise comparisons is called condorcet
Theory
candidate after the Marquis de Condorcet
(French mathematician and philosopher 1743-
1794).
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HYPOTHETICAL VOTER PREFERENCE
Voter Number of voters
preference
type with that type
Theory
A 95 b>d>e
B 95 d>b>e
C 110 e>b>d
Cyclical majority: no one

candidate can muster a majority of
votes against all alternatives,
hence there is no Condorcet
candidate.
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Voter Preferences That Produce No
Condorcet Candidate
Voter Number of voters

preference
Theory
type with that type
A 1 x>y>z
B 1 y>z>x
C 1 z>x>y
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 Single transferable vote: voters are given a
slate of candidates and are asked to vote for one.
if no one candidate receives a majority of the
votes cast, a second ballot is taken in which the
candidate receiving the smallest number of votes
from the first ballot dropped from the list of
Theory
eligible candidates.
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SHAREHOLDER PREFERENCES
Number of
Voter Preference
Shares/voters
Theory
A 8 z>y>x
B 7 x>z>y
C 6 y>x>z
D 3 y>z>x
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THE OUTCOME OF THE ELECTION AS
B’S VOTE CHANGES WHEN THE
OTHER VOTERS ARE HONEST
Theory
Voter B’s Ballot Winner
x>z>y (honest) Z
x>y>z Y
z>x>y Z
z>y>x Z
y>x>z Y
y>z>x Y
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STRATEGIC VOTING WITH PLURALITY
RULE
 Chairman’s paradox: one member of a
committee -the chairman – is given the
power to break ties. the resulting
Theory
plurality-rule voting game has a unique
iterated dominant strategy equilibrium
whose outcome is the one considered the
worst by the “powerful” chairman.
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AN EXAMPLE
 Three professors at economics department, Ms.

Ayşe, Ms. Fatma , and Mr. Ali , have been asked
by the economics department to choose the
mathematics requirement for economics major.
There are considering three options.
Theory
 require no math courses for students majoring in
economics. L (low requirement)
 require one term of Univariate calculus. M
(medium requirement)
 require two terms of calculus: one of Univariate
calculus and one of multivariate. H (high
requirement)
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VOTER PREFERENCES
voter preferences One of the
Ms. Ayşe L > M >H committee members,
Mr. Ali H > L >M Ms. Ayşe, has been
Theory
Ms. Fatma M > H >L designated the Chair
of committee.
The chair carries the power to cast a tie-
breaking vote. It is more likely that Ms. Ayşe’s
preferred outcome will be chosen. This
institution is confirmed by the naïve model.
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THE NAÏVE VOTING MODEL
If all three members of the committee vote
naively, then the outcome of vote is
straightforward and intuitive:
Theory
Ms. Ayşe  L L is chosen by the
Ms. Fatma  M committee and
Mr. Ali  H economics majors
will not be required
to take any math
course.
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THE STRATEGIC VOTING MODEL
 Strategic voting behavior: the game essentially

reduces to a static game in which the set of
Theory
strategies and the set of moves coincide. The
concept we will employ to make predictions about
Strategic voting behavior is Nash equilibrium.
 But, if we can find dominant strategies and
iterated dominant strategies, we will use them as
our predictors. Because of Ms. Ayşe’s voting power,
it is likely that he has dominated strategies that
can be removed from the game.
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 Consider Ms. Ayşe’s best response to every possible
pair of votes by Ms. Fatma and Mr. Ali.
 If Ms. Fatma and Mr. Ali vote for the same
Theory
candidate, then Ms. Ayşe s vote is irrelevant and
all three of Ms. Ayşe’s strategies are equally good.
 If Ms. Fatma and Mr. Ali split their vote, then Ms.
Ayşe’s vote determines the outcome. Hence Ms.
Ayşe has a weakly dominant strategy of voting for
L. we would predict, and so presumably would Ms.
Fatma and Mr. Ali, that he will vote for L.
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PAYOFF MATRIX ASSUMING MS. AYŞE
VOTES FOR L
Theory
Ms. Fatma’s vote
H M L
Mr. H (Best, Middle, worst) (Middle, worst best,) (Middle, worst, best)
Ali’s
vote M (middle, worst, best) (worst, Best, middle) (Middle, worst, best)
L (middle, Worst, best) (Middle, Worst, best) (Middle, Worst, best)
Payoffs: Mr. Ali, Ms. Fatma and Ms. Ayşe
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VOTES FOR L AND MS. FATMA DOES NOT
VOTE FOR L
Ms. Fatma’s vote
Theory
H M
Mr. Ali’s H (Best, Middle, worst) (Middle, worst best,)

vote
M (middle, worst, best) (worst, Best, middle)
L (middle, Worst, best) (Middle, Worst, best)
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VOTES FOR L, MS. FATMA DOES NOT VOTE
FOR L, AND MR. ALI VOTES FOR H
Theory
Ms. Fatma’s vote
H M
Mr. Ali’s
vote (Best, Middle,
H (Middle, worst best,)
worst)
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 H wins, even though the Chair of the committee,
Ms. Ayşe, considers this his worst outcome. The
“power” to break ties turns out to be a bad thing
for the person who is unlucky enough to be saddled
with it. Oddly enough, once the committee is
assigned, there should be a fight among the
members not to be chosen as Chair, even though
Theory
the Chair brings with it extra voting “privileges.”
 Of course, what drives the result is that Ms. Fatma

does not vote “naively”. she recognizes that if she
were to do so, then she would end up with what
she considers to be the worst outcome. Therefore,
she votes strategically.
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Prof.

Yeşim Kuştepeli ECO 4413 Game Theory

Prof. Yeşim Kuştepeli ECO 4413 Game Theory

 Plurality Rule and the Condorcet Candidate

 A Modified Plurality Rule: The Single

 Theacceptance or rejection by a union’s

 Theacceptance or rejection by a state’s

 Strategicallysophisticated voter realize

 This voting mechanism most commonly used

 There is no social choice mechanism that

2) The ranking provided by the SCM is always complete and

3) The relative ranking of any two candidates provided by the

4) The SCM is not a dictatorship. There is no individual whose

 Majority rule: the winner is the candidate

 In an election between two candidates

 all voters are well informed

 the slate of candidates as given

 Positioning at 0.50 is a weakly dominant strategy

 0.50 is the position of the median voter. candidates’

Cyclical majority: no one

Voter Number of voters

 Three professors at economics department, Ms.

 Strategic voting behavior: the game essentially

 If Ms. Fatma and Mr. Ali vote for the same

Payoffs: Mr. Ali, Ms. Fatma and Ms. Ayşe

Ms. Fatma’s vote

Mr. Ali’s H (Best, Middle, worst) (Middle, worst best,)

Payoffs: Mr. Ali, Ms. Fatma and Ms. Ayşe

Payoffs: Mr. Ali, Ms. Fatma and Ms. Ayşe

 Of course, what drives the result is that Ms. Fatma

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