Steven P. Lalley
Department of Statistics, University of Chicago
E. Glen Weyl
Microsoft Research New York City; Yale University
June 29, 2016
We propose Quadratic Voting as a method for binary collective decision-making: individuals buy votes for their preferred alternative, paying the square of the number of votes purchased. Quadratic cost uniquely makes the marginal cost proportional to votes purchased, encouraging voting proportional to the value and thus efficiency. Similar arguments suggest it is more robust than other efficient mechanisms and it grows naturally from a variety of ideas in disparate literatures. By explicitly characterizing the subtle statistical structure of equilibrium that may have inhibited prior rigorous analysis, we prove convergence towards efficiency in large populations in a canonical environment.
The online appendix for "Quadratic Voting" may be found here: http://ssrn.com/abstract=2790624.
Number of Pages in PDF File: 35
Keywords: social choice, collective decisions, large markets, costly voting, vote trading
JEL Classification: D47, D61, D71, C72, D82, H41, P16
Date posted: February 13, 2012 ; Last revised: June 30, 2016