The Wisdom of the Crowd: Uninformed Voting and the Efficiency of Democracy

39 Pages Posted: 20 Apr 2023

See all articles by Ralph‐Christopher Bayer

Ralph‐Christopher Bayer

University of Adelaide

Marco Faravelli

The University of Queensland

Carlos Pimienta

University of New South Wales (UNSW)

Date Written: April 20, 2023

Abstract

We show in a novel voting model with costly information acquisition that in equilibrium nobody votes without acquiring information and that the probability of the better alternative winning converges to one as the size of the electorate approaches infinity. In a large-scale internet experiment during the US Presidential Election, we find alarming rates of uninformed voting (>42 percent). The problem is exacerbated in treatments that allow for expressive voting motives and overconfidence (rates up to 56 percent). Increasing the electorate size substantially raises efficiency, as long as uninformed voting is not too biased towards one alternative.

Keywords: Costly information acquisition, Condorcet Jury Theorem, Uninformed voting, Wisdom of the crowd

JEL Classification: C90, D72, C72

Suggested Citation

Bayer, Ralph‐Christopher and Faravelli, Marco and Pimienta, Carlos, The Wisdom of the Crowd: Uninformed Voting and the Efficiency of Democracy (April 20, 2023). UNSW Economics Working Paper 2023-08, Available at SSRN: https://ssrn.com/abstract=4424562 or http://dx.doi.org/10.2139/ssrn.4424562

Ralph‐Christopher Bayer

University of Adelaide

No 233 North Terrace, School of Commerce
Adelaide, 5005
Australia

Marco Faravelli

The University of Queensland ( email )

Australia

Carlos Pimienta (Contact Author)

University of New South Wales (UNSW) ( email )

Kensington
High St
Sydney, NSW 2052
Australia

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