Characterising scoring rules by their solution in iteratively undominated strategies

We characterize voting procedures according to the social choice correspondence they implement when voters cast ballots strategically, applying iteratively undominated strategies. In elections with three candidates, the Borda Rule is the unique positional scoring rule that satisfies unanimity (U) (i.e., elects a candidate whenever it is unanimously preferred) and is majoritarian after eliminating a worst candidate (MEW)(i.e., if there is a unanimously disliked candidate, the majority-preferred among the other two is elected). In a larger class of rules, Approval Voting is characterized by a single axiom that implies both U and MEW but is weaker than Condorcet-consistency (CON)—it is the only direct mechanism scoring rule that is majoritarian after eliminating a Pareto-dominated candidate (MEPD)(i.e., if there is a Pareto-dominated candidate, the majority-preferred among the other two is elected); among all finite scoring rules that satisfy MEPD, Approval Voting is the most decisive. However, it fails a desirable monotonicity property: a candidate that is elected for some preference profile, may lose the election once she gains further in popularity. In contrast, the Borda Rule is the unique direct mechanism scoring rule that satisfies U, MEW and monotonicity (MON). There exists no direct mechanism scoring rule that satisfies both MEPD and MON and no finite scoring rule satisfying CON.

Set and revealed preference axioms for multi-valued choice

We consider choice correspondences that assign a subset to every choice set of alternatives, where the total set of alternatives is an arbitrary finite or infinite set. We focus on the relations between several extensions of the condition of independence of irrelevant alternatives on one hand, and conditions on the revealed preference relation on sets, notably the weak axiom of revealed preference, on the other hand. We also establish the connection between the condition of independence of irrelevant alternatives and so-called strong sets; the latter characterize a social choice correspondence satisfying independence of irrelevant alternatives.

Revealed Preference Implications of Backward Induction and Subgame Perfection

Consider a decision-maker (DM) who must select an alternative from a set of mutually exclusive alternatives but must take this decision sequentially. If the DM’s choice correspondence over subsets of alternatives satisfies the weak axiom of revealed preference (WARP), then the subgame perfect Nash equilibrium (SPNE) and backward induction (BI) strategies coincide. We study the relation between the SPNE and BI strategies when the DM’s choice correspondence fails to satisfy WARP. First, Sen’s axiom α is necessary and sufficient for the set of SPNE strategies to be a subset of the set of BI strategies; moreover, a mild strengthening of Sen’s axiom β is necessary and sufficient for the set of BI strategies to be a subset of the set of SPNE strategies. These results extend to multiplayer games. (JEL D11, C72, C73)