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Universität zu Köln
Wirtschafts- und Sozialwissenschaftliche Fakultät

Staatswissenschaftliches Seminar - Prof. Schmitz

The (Sub-)Optimality of the Majority Rule

Patrick W. Schmitz and Thomas Tröger

Games and Economic Behavior, Vol. 74 (2), 2012, 651-665.

Abstract. We consider collective choice from two alternatives. Ex ante, each agent is uncertain about which alternative she prefers, and may be uncertain about the intensity of her preferences. An environment is given by a probability distribution over preference-profiles that is symmetric across agents and neutral across alternatives. In many environments, the majority voting rule maximizes agents` ex-ante expected utilities among all anonymous and dominant-strategy implementable choice rules. But in some environments where the agents` preferences are stochastically correlated, other dominant-strategy choice rules are better for all agents. If utilities are stochastically independent across agents, majority voting is ex-ante optimal among all anonymous and incentive-compatible rules. We also compare rules from an interim-viewpoint.

The paper is available for download.