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
Date Written: May 18, 2007
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
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