Information sharing in democratic mechanisms

Abstract

We examine how democratic mechanisms can yield socially desirable outcomes in the presence of uncertainty about an underlying state of nature. We depart from a conventional mechanism design approach because we aim for democratic mechanisms to reflect some basic properties of decision-making in democracies. In particular, actual decisions are made by majority voting. The proposals to be voted upon are made by a selfish agenda-setter. Moreover, communication is limited to a binary message space (that is, voting Yes or No). We show how suitable democratic mechanisms can resolve uncertainty, reveal the state of nature, and implement the Condorcet winner. We demonstrate that this implementation result requires (at most) two voting stages regardless of the number of states or the number of alternatives. We also show that implementation requires a conditional privilege for a small representative subset of the population. © 2020, Springer-Verlag GmbH Germany, part of Springer Nature.