A Solution Concept for Majority Rule in Dynamic Settings

Review of Economic Studies, Wiley Blackwell, Vol. 76(1), pages 33-62, 01, 2007

50 Pages Posted: 2 Feb 2013

See all articles by B. Douglas Bernheim

B. Douglas Bernheim

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Sita N. Slavov

American Enterprise Institute; Occidental College - Department of Economics

Date Written: May 18, 2007

Abstract

We define and explore the notion of a Dynamic Condorcet Winner (DCW), which extends the notion of a Condorcet winner to dynamic settings. We show that, for every DCW, every member of a large class of dynamic majoritarian games has an equivalent equilibrium, and that other equilibria are not similarly portable across this class of games. Existence of DCWs is guaranteed when members of the community are sufficiently patient. We characterize sustainable and unsustainable outcomes, study the effects of changes in the discount factor, investigate efficiency properties, and explore the potential for achieving renegotiation-proof outcomes. We apply this solution concept to a standard one-dimensional choice problem wherein agents have single-peaked preferences, as well as to one involving the division of a fixed aggregate payoff.

Keywords: majority rule, equilibrium, dynamic

Suggested Citation

Bernheim, B. Douglas and Slavov, Sita N., A Solution Concept for Majority Rule in Dynamic Settings (May 18, 2007). Review of Economic Studies, Wiley Blackwell, Vol. 76(1), pages 33-62, 01, 2007. Available at SSRN: https://ssrn.com/abstract=2210463

B. Douglas Bernheim

Stanford University - Department of Economics ( email )

Landau Economics Building
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National Bureau of Economic Research (NBER)

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Sita N. Slavov (Contact Author)

American Enterprise Institute ( email )

1150 17th Street, N.W.
Washington, DC 20036
United States

HOME PAGE: http://www.aei.org/scholar/sita-nataraj-slavov/

Occidental College - Department of Economics ( email )

Los Angeles, CA 90041
United States

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