Exam 2 ReviewQ 4 5 6

Exam 2 ReviewQ 4 5 6 - Review Questions 4 1. Public Choice...

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Review Questions 4 1. Public Choice – Study of how collective decisions are made using a non-market decision process. 2. Majority Voting Equilibrium – That outcome where any proposal to change the outcome will be defeated by a vote of the majority. 3. Direct Majority Voting a) Majority Voting Equilibrium is determined by the preferences of the median voter (Median Voter Theorem) b) At the MV equilibrium the only truly “satisfied” voter is the median voter. The majority does not get what it wants since the majority does not agree on what is optimal. d) e) 4. At the MV equilibrium the only truly “satisfied” voter is the median voter. The majority does not get what it wants since the majority does not agree on what is optimal. 5. Voting Paradox – community outcomes under MV are intransitive, inconsistent, and irrational, even though the preferences of all voters are transitive, consistent, and rational. 6. Agenda Manipulation – Controlling the order of voting so as to secure a certain final outcome. Related to Voting Paradox in the sense that it uses the same type voting agenda where there is no real MV equilibrium. 7. Logrolling – The process of trading votes for the purpose of obtaining the required majority. 9. 11. 12. Plurality Voting 1. Individuals rank their various choices 2. For each voter, top choice = 1 point, second choice = 2 points, etc. 3. For each choice, points are added across voters 4. Lowest point total wins 13.
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14. Point Voting 1. Individuals rank their various choices 2. Each voter is assigned a fixed number of votes/points 3. Voters assign points to each choice based on their intensity of preference 4. Votes are added across voters for each choice 5. Highest point total wins Point Voting differs from Plurality and Majority Voting because it captures the “intensity
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This note was uploaded on 06/11/2008 for the course ECON 435 taught by Professor Drabicki during the Summer '06 term at Arizona.

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Exam 2 ReviewQ 4 5 6 - Review Questions 4 1. Public Choice...

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