Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/125074
Authors: 
Borissov, Kirill
Pakhnin, Mikhail
Puppe, Clemens
Year of Publication: 
2015
Series/Report no.: 
Working Paper Series in Economics, Karlsruher Institut für Technologie (KIT) 77
Abstract: 
In dynamic resource allocation models, the non-existence of voting equilibria is a generic phenomenon due to the multi-dimensionality of the choice space even with agents heterogeneous only in their discount factors. Nevertheless, at each point of time there may exist a "median voter" whose preferred instantaneous consumption rate is supported by a majority of agents. Based on this observation, we propose an institutional setup ("intertemporal majority voting") in a Ramsey-type growth model with common consumption and heterogeneous agents, and show that it provides a microfoundation of the choice of the optimal consumption stream of the median agent. While the corresponding intertemporal consumption stream is in general not a Condorcet winner among all feasible paths, its induced instantaneous consumption rate receives a majority at each point in time in the proposed intertemporal majority voting procedure. We also provide a characterization of balanced-growth and steady-state voting equilibria in the case in which agents may differ not only in their time preference, but also in their instantaneous utility functions.
Subjects: 
collective choice
common-pool resource
economic growth
heterogeneous agents
median voter theorem
JEL: 
D11
D71
D91
O13
O43
Document Type: 
Working Paper

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