School of Economics and Finance

No. 777: Divided Majority and Information Aggregation: Theory and Experiment

Laurent Bouton , Georgetown University, Université Libre de Bruxelles, CEPR and NBER
Micael Castanheira , Université Libre de Bruxelles, FNRS and CEPR
Aniol Llorente-Saguer , Queen Mary University of London

December 20, 2015

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We propose a theory-based experimental approach to compare the properties of approval voting (AV) with those of plurality. This comparison is motivated by the theoretical predictions that, in our aggregate uncertainty setup, AV should produce close to first-best outcomes, while plurality will not. The experiment shows, first, that welfare gains are substantial. Second, both aggregate and individual responses are in line with theoretical predictions, and thus with strategic voting. Finally, subjects' behavior under AV highlights the need to study equilibria in asymmetric strategies.

J.E.L classification codes: C72, C92, D70

Keywords:Multicandidate elections, Information aggregation, Plurality, Approval Voting, Laboratory experiments