Goeree, Jacob K. and Zhang, Jingjing (2017). One man, one bid. Games Econ. Behav., 101. S. 151 - 172. SAN DIEGO: ACADEMIC PRESS INC ELSEVIER SCIENCE. ISSN 1090-2473
Full text not available from this repository.Abstract
We compare two mechanisms to implement a simple binary choice, e.g. adopt one of two proposals. We show that when neither alternative is ex ante preferred, simple majority voting cannot implement the first best outcome. We introduce a simple bidding mechanism where votes can be bought at a quadratic cost and voters receive rebates equal to the average of others' payments. This mechanism is budget-balanced, individually rational, and fully efficient in the limit. Moreover, the mechanism redistributes from those that gain from the outcome to those that lose and everyone is better off under bidding compared to voting. We test the two mechanisms in the lab using an environment with moderate and extremist voters. The observed efficiency losses under voting are close to theoretical predictions and significantly larger than under bidding. Because of redistribution, the efficiency gain from bidding benefits mostly the moderate voters. (C) 2016 Elsevier Inc. All rights reserved.
Item Type: | Journal Article | ||||||||||||
Creators: |
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URN: | urn:nbn:de:hbz:38-246717 | ||||||||||||
DOI: | 10.1016/j.geb.2016.10.003 | ||||||||||||
Journal or Publication Title: | Games Econ. Behav. | ||||||||||||
Volume: | 101 | ||||||||||||
Page Range: | S. 151 - 172 | ||||||||||||
Date: | 2017 | ||||||||||||
Publisher: | ACADEMIC PRESS INC ELSEVIER SCIENCE | ||||||||||||
Place of Publication: | SAN DIEGO | ||||||||||||
ISSN: | 1090-2473 | ||||||||||||
Language: | English | ||||||||||||
Faculty: | Unspecified | ||||||||||||
Divisions: | Unspecified | ||||||||||||
Subjects: | no entry | ||||||||||||
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Refereed: | Yes | ||||||||||||
URI: | http://kups.ub.uni-koeln.de/id/eprint/24671 |
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