Vote Trading in Power-Sharing Systems : A Laboratory Investigation

Vote trading in power-sharing systems -i.e., systems in which a voter's utility with respect to the election's outcome is proportional to the vote share of her favourite party- is, in theory, welfare improving. However, trading votes for money in majoritarian systems may have detrimental welfare effects, especially when voters' preference intensities are similar (Casella et al., 2012). We use a laboratory experiment to test the effect of vote trading in each of these popular electoral systems on voter welfare and find strong evidence in support of the above intuitions: vote trading in power-sharing systems boosts aggregate welfare across all considered specifications, but it is not welfare improving in majoritarian systems. Importantly, and contrary to theoretical predictions, a substantial share of subjects consistently lose from vote trading even in power-sharing systems, indicating that its welfare effects are not unambiguous