Ordinally Bayesian incentive-compatible voting schemes

We study strategic voting after weakening the notion of strategy-proofness to Ordinal Bayesian Incentive Compatibility (OBIC). Under OBIC, truthelling is required to maximize the expected utility being computed with respect to the voter's prior beliefs and under the assumption that everybody else is also telling the truth. We show that for a special type of priors i.e., the uniform priors there exists a large class of social choice functions that are OBIC. However, for priors which are generic in the set of independent beliefs a social choice function is OBIC only if it is dictatorial. This result underlines the robustness of the Gibbard-Satterthwaite Theorem.

The Dynamic Reform of Political Institutions

This paper introduces a class of games designed to study dynamic, endogenous reform of political institutions. Dynamic political games (DPGs) are dynamic games in which institutional choice is both recursive and instrumental. Future political aggregation rules are decided under current ones, and institutional choices do not affect payoffs or technology directly. We examine properties of the Markovian equilibria of DPGs. In any equilibrium, institutional reform occurs if the subsequent political rule is chosen to be different than the present one. Which environments exhibit institutional reform and which tend toward institutional stability? Private (public) sector decisions are said to be inessential if, roughly, they can always be replaced by decisions in the public (private) sector in a social planner's payoff. We show that if the private sector is inessential, then institutional reform never occurs. However, if public sector decisions are inessential, then institutional reform must occur. The result suggests that an ineffective private sector is conducive to institutional stability, while an ineffective public sector is conducive to change. We also address the ``political fixed point problem" that arises in a model of recursive institutional choice. Namely, the current political rule (e.g., majority voting) admits a solution only if all feasible political rules admit solutions in all future dates. If the class of political rules is dynamically consistent then DPGs are shown to admit political fixed points. This result is used to prove two equilibrium existence theorems, one of which implies that all decision rules are smooth functions of the economic stateRecursive, dynamic political games, institutional reform, political fixed points, inessential.

Strategic Manipulability is Inescapable: Gibbard-Satterthwaite without Resoluteness

The Gibbard-Satterthwaite Theorem on the manipulability of collective-choice procedures treats only of resolute procedures. Few real or reasonable procedures are resolute. We prove a generalization of Gibbard-Satterthwaite that covers the nonresolute case. It opens harder questions than it answers about the prediction of behavior and outcomes and the design of institutions

On the manipulability of approval voting and related scoring rules

We characterize all preference profiles at which the approval (voting) rule is manipulable, under three extensions of preferences to sets of alternatives: by comparison of worstalternatives, best alternatives, or by comparison based on stochastic dominance. We perform a similar exercise for $k$-approval rules, where voters approve of a fixed number $k$ of alternatives. These results can be used to compare ($k$-)approval rules with respect to their manipulability. Analytical results are obtained for the case of two voters, specifically, the values of $k$ for which the $k$-approval rule is minimally manipulable -- has the smallest number of manipulable preference profiles -- under the various preference extensions are determined. For the number of voters going to infinity, an asymptotic result is that the $k$-approval rule with $k$ around half the number of alternatives is minimally manipulable among all scoring rules. Further results are obtained by simulation and indicate that $k$-approval rules may improve on the approval rule as far as manipulability is concerned.public economics ;

On Comparing the Accuracy of Default Predictions in the Rating Industry

We consider 1927 borrowers from 54 countries who had a credit rating by both Moody's and S&P at the end of 1998, and their subsequent default history up to the end of 2002. Viewing bond ratings as predicted probabilities of default, we consider partial orderings among competing probability forecasters and show that Moody's and S&P cannot be ordered according to any of these. Therefore, the relative performance of the agencies depends crucially on the way in which probability predictions are compared.credit rating, probability forecasts, calibration

Democratic Deliberation and Social Choice: A Review

In normative political theory, it is widely accepted that democracy cannot be reduced to voting alone, but that it requires deliberation. In formal social choice theory, by contrast, the study of democracy has focused primarily on the aggregation of individual opinions into collective decisions, typically through voting. While the literature on deliberation has an optimistic flavour, the literature on social choice is more mixed. It is centred around several paradoxes and impossibility results identifying conflicts between different intuitively plausible desiderata. In recent years, there has been a growing dialogue between the two literatures. This paper discusses the connections between them. Important insights are that (i) deliberation can complement aggregation and open up an escape route from some of its negative results; and (ii) the formal models of social choice theory can shed light on some aspects of deliberation, such as the nature of deliberation-induced opinion change