Quadratic Voting and Heterogeneous Beliefs

Abstract: Quadratic voting has been proposed as a voting procedure that aggregates preferences in a near-utilitarian way. A voter’s optimal strategy is, however, not solely a function of her preferences, but also of her beliefs about how others will vote. This thesis presents a formal model of quadratic voting that, unlike previous models, allows for heterogeneity in the beliefs of voters. The specification is then used to answer two questions about the relationship between beliefs and voting outcomes. Firstly, how does heterogeneity in beliefs impact election outcomes? Secondly, what incentives do individual voters have to acquire information about how others will vote? Results suggest that heterogeneity in beliefs leads election outcomes to represent preferences only noisily. As long as preferences and beliefs are independently distributed, the detrimental effects on efficiency decline as the number of voters grows large. If beliefs and preferences are correlated, however, heterogeneous beliefs may lead to outcomes that are systematically inefficient.