DP5093 A Simple Scheme to Improve the Efficiency of Referenda

Author(s): Alessandra Casella , Andrew Gelman

Publication Date: June 2005

Keyword(s): referenda , voting mechanisms , majority voting

JEL(s): D70 , H10 , K19

Programme Areas: Public Policy

Link to this Page: www.cepr.org/pubs/dps/DP5093.asp

This paper proposes a simple scheme designed to elicit and reward intensity of preferences in referenda: voters faced with a number of binary proposals are given one regular vote for each proposal plus an additional number of bonus votes to cast as desired. Decisions are taken according to the majority of votes cast. In our base case, where there is no systematic difference between proposals’ supporters and opponents, there is always a positive number of bonus votes such that ex ante utility is increased by the scheme, relative to simple majority voting. When the distributions of valuations of supporters and opponents differ, the improvement in efficiency is guaranteed only if the distributions can be ranked according to first order stochastic dominance. If they are, however, the existence of welfare gains is independent of the exact number of bonus votes.