Scandinavian Working Papers in Economics

Memorandum,
Oslo University, Department of Economics

No 02/2005: Majority voting leads to unanimity

Geir B. Asheim (), Carl Andreas Claussen () and Tore Nilssen ()
Additional contact information
Geir B. Asheim: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Carl Andreas Claussen: Norges Bank, Postal: P.O. Box 1179 Sentrum, 0107 Oslo, Norway
Tore Nilssen: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway

Abstract: We consider a situation where society decides, through majority voting in a secret ballot, between the alternatives of ‘reform’ and ‘status quo’. Reform is assumed to create a minority of winners, while being efficient in the Kaldor-Hicks sense. We explore the consequences of allowing binding transfers between voters conditional on the chosen alternative. In particular, we establish conditions under which the winners wish to compensate all losers, thus leading to unanimity for reform, rather than compensating some losers to form a non-maximal majority. The analysis employs concepts from cooperative game theory.

Keywords: voting; reform; status quo; Kaldor-Hicks sense; chosen alternative; unanimity for reform; cooperative game theory

JEL-codes: C71; D72

26 pages, January 7, 2005

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Published as
Geir B. Asheim, Carl Andreas Claussen and Tore Nilssen, (2006), 'Majority voting leads to unanimity', International Journal of Game Theory, vol 35, pages 91-110

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