Does Vote Trading Improve Welfare ?
Annual Review of Economics, Forthcoming
53 Pages Posted: 13 Oct 2020 Last revised: 18 Dec 2020
Date Written: December 17, 2020
Voters have strong incentives to increase their influence by trading votes, acquiring
others' votes when preferences are strong in exchange for giving votes away when
preferences are weak. But is vote trading welfare-improving or welfare-decreasing?
For a practice long believed to be central to collective decisions, the lack of a clear
answer is surprising. We review the theoretical literature and, when available, its
related experimental tests. We begin with the analysis of logrolling -- the exchange
of votes for votes. We then focus on vote markets, where votes can be traded against
a numeraire. We conclude with procedures allowing voters to shift votes across decisions -- to trade votes with oneself only. We find that vote trading and vote markets
are typically inefficient; more encouraging results are obtained by allowing voters
to allocate votes across decisions.
Keywords: logrolling, vote trading, storable votes, quadratic voting, bundling, vote markets
JEL Classification: D02, D47, D70, D71,D72, D82, P16
Suggested Citation: Suggested Citation