@article{987ceee927d64b0b8aabd62680c57628,
title = "Why voting? A welfare analysis",
abstract = "A committee decides collectively whether to accept a given proposal or to maintain the status quo. Committee members are privately informed about their valuations and monetary transfers are possible. According to which rule should the committee make its decision? We consider strategy-proof and anonymous mechanisms and solve for the decision rule that maximizes utilitarian welfare, which takes monetary transfers to an external agency explicitly into account. For regular distributions of preferences, we find that it is optimal to exclude monetary transfers and to decide by qualified majority voting. This sheds new light on the common objection that criticizes voting for its inefficiency.",
author = "Moritz Drexl and Andreas Kleiner",
note = "Funding Information: *Drexl: Bonn Graduate School of Economics, University of Bonn, Kaiserstr. 1, 53111 Bonn (email: drexl@uni-bonn.de); Kleiner: Department of Economics, Arizona State University, PO Box 879801, Tempe, AZ 85287 (email: andreas.kleiner@asu.edu). We wish to thank Gabriel Carroll, Drew Fudenberg, Jerry Green, Martin Hellwig, Daniel Kr{\"a}hmer, Eric Maskin, David Miller, Benny Moldovanu, David Parkes, Ilya Segal, Thomas Tr{\"o}ger, and seminar participants at the University of Bonn, Harvard University, and the Max Planck Institute for Research on Collective Goods for helpful comments and insightful discussions. An anonymous referee provided detailed comments that helped to improve the paper. We are grateful to the Bonn Graduate School of Economics for financial support. Publisher Copyright: {\textcopyright} 2018 American Economic Association.",
year = "2018",
month = aug,
day = "1",
doi = "10.1257/mic.20160337",
language = "English (US)",
volume = "10",
pages = "253--271",
journal = "American Economic Journal: Microeconomics",
issn = "1945-7669",
publisher = "American Economic Association",
number = "3",
}