One man, one bid

• 成果类型: Article
• 署名作者: Goeree, Jacob K.; Zhang, Jingjing
• 署名单位: University of New South Wales Sydney; University of Cologne; University of Technology Sydney
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2016.10.003
• 发表日期: 2017
• 页码: 151-171
• 关键词: Electoral design; Bidding versus voting; experiments; Quantal response equilibrium

摘要

We compare two mechanisms to implement a simple binary choice, e.g. adopt one of two proposals. We show that when neither alternative is ex ante preferred, simple majority voting cannot implement the first best outcome. We introduce a simple bidding mechanism where votes can be bought at a quadratic cost and voters receive rebates equal to the average of others' payments. This mechanism is budget-balanced, individually rational, and fully efficient in the limit. Moreover, the mechanism redistributes from those that gain from the outcome to those that lose and everyone is better off under bidding compared to voting. We test the two mechanisms in the lab using an environment with moderate and extremist voters. The observed efficiency losses under voting are close to theoretical predictions and significantly larger than under bidding. Because of redistribution, the efficiency gain from bidding benefits mostly the moderate voters. (C) 2016 Elsevier Inc. All rights reserved.