Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92839
Authors: 
Pintér, Agnes
Veszteg, Robert F.
Year of Publication: 
2008
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 708
Abstract: 
Due to its simplicity the plurality voting system is frequently used to choose a common representative or project. Nevertheless it may fail to provide a socially efficient decision as a majority can outvote any minority even if the majority's gain does not compensate the loss suffered by the minority. In this paper we propose and study a simple mechanism that allows voters to reveal more information about their preferences over the candidates. According to the standardized bids mechanism voters report a bid for all the available projects. Standardization ensures the existence of equilibrium, and delivers incentives to overcome the problem of positive and negative exaggeration. Our experimental results show that the standardized bids mechanism performed well in the laboratory as it chose the efficient project in almost three quarters of the cases, and induced truthful reports of project rankings in approximately 90% of the cases. For a reference, we also present experimental results for the plurality voting scheme.
Subjects: 
efficiency
experiments
mechanism design
public project
uncertainty
voting rules
JEL: 
C92
D71
D82
Document Type: 
Working Paper

Files in This Item:
File
Size
232.31 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.