Minority Voting and Long-Term Decisions

CESifo Working Paper Series No. 2198

CER-ETH - Center of Economic Research at ETH Zurich Working Paper No. 07/70

48 Pages Posted: 20 Jul 2007

See all articles by Theresa Fahrenberger

Theresa Fahrenberger

Heidelberg University - Alfred Weber Institute for Economics

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Research; IZA Institute of Labor Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR)

Date Written: January 2008

Abstract

In this paper we propose minority voting as a scheme that can partially protect individuals from the risk of repeated exploitation. We consider a committee that meets twice to decide about projects where the first-period project may have a long-lasting impact. In the first period a simple open majority voting scheme takes place. Voting splits the committee into three groups: voting winners, voting losers, and absentees. Under minority voting only voting losers keep the voting right in the second period. We show that as soon as absolute risk aversion exceeds a threshold value minority voting is superior to repeated application of the simple majority rule.

Keywords: voting, minority, durable decision, risk aversion, tyranny of majority rules

JEL Classification: D7

Suggested Citation

Fahrenberger, Theresa and Gersbach, Hans, Minority Voting and Long-Term Decisions (January 2008). CESifo Working Paper Series No. 2198, CER-ETH - Center of Economic Research at ETH Zurich Working Paper No. 07/70, Available at SSRN: https://ssrn.com/abstract=1000897 or http://dx.doi.org/10.2139/ssrn.1000897

Theresa Fahrenberger (Contact Author)

Heidelberg University - Alfred Weber Institute for Economics ( email )

Grabengasse 14
Heidelberg, D-69117
Germany

Hans Gersbach

ETH Zurich - CER-ETH -Center of Economic Research ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland
+41 44 632 82 80 (Phone)
+41 44 632 18 30 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Do you want regular updates from SSRN on Twitter?

Paper statistics

Downloads
208
Abstract Views
1,243
rank
199,757
PlumX Metrics