Simple plurality versus plurality runoff with privately informed voters

This paper compares two voting methods commonly used in presidential elections: simple plurality voting and plurality runoff. In a situation in which a group of voters have common interests but do not agree on which candidate to support due to private information, information aggregation requires them to split their support between their favorite candidates. However, if a group of voters split their support between their favorite candidates, they increase the probability that the winner of the election is not one of them. In a model with three candidates, due to this tension between information aggregation and the need for coordination, plurality runoff leads to higher expected utility for the majority than simple plurality voting if the information held by voters about the candidates is not very accurate. ∗Departamento de Economı́a and Centro de Investigación Económica, Instituto Tecnológico Autónomo de México, México, D.F. 10700. E-mail: [email protected]. Phone: +52 56284197. Fax: +52 56284058. I thank José Luis Ferreira for useful conversations and audiences at Colegio de México, the LACEA Political Economy Group, and the 2000 Social Choice and Welfare Meetings (Alicante) for helpful observations.