The Benefits of Costly Voting

Abstract

We present a costly voting model in which each voter has a private valuation for their preferred outcome of a vote. When there is a zero cost to voting, all voters vote and hence all values are counted equally regardless of how high they may be. By having a cost to voting, only those with high enough values would choose to incur this cost. Hence, the outcome will be determined by voters with higher valuations. We show that in such a case welfare may be enhanced. Such an effect occurs when there is both a large enough density of voters with low values and a high enough expected value.

Keywords: costly voting, externalities

JEL Classification: C70, D72