Stress-Testing the Runoff Rule in the Laboratory

39 Pages Posted: 5 Sep 2019

See all articles by Nikolas Tsakas

Nikolas Tsakas

University of Cyprus - Department of Economics

Dimitrios Xefteris

University of Cyprus

Date Written: August 28, 2019

Abstract

When a majority of voters has common values, but private information, then the runoff rule always admits an equilibrium that aggregates information strictly better than the best equilibrium of the plurality rule. But there are cases in which the plurality rule supports equilibria that are strictly better compared to certain undominated equilibria of the runoff rule. Is there any risk with applying the runoff rule in these situations? We conduct a laboratory experiment and we show that the runoff rule consistently delivers better outcomes than the plurality rule even in such unfavorable scenarios. This establishes that the superiority of the runoff rule over the plurality rule in empirical settings outperforms its theoretical advantages.

Keywords: runoff voting; plurality rule; information aggregation; Condorcet jury theorem; experiment

JEL Classification: D72

Suggested Citation

Tsakas, Nikolas and Xefteris, Dimitrios, Stress-Testing the Runoff Rule in the Laboratory (August 28, 2019). Available at SSRN: https://ssrn.com/abstract=3444348 or http://dx.doi.org/10.2139/ssrn.3444348

Nikolas Tsakas (Contact Author)

University of Cyprus - Department of Economics ( email )

75 Kallipoleos Street
P.O. Box 20537
1678 Nicosia
Cyprus

Dimitrios Xefteris

University of Cyprus ( email )

75 Kallipoleos Street
P.O. Box 20537
1678 Nicosia
Cyprus

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