Economic Theory Seminar Series - Jiemai Wu (University of Sydney)

Title: Group cascades in strategic voting

Abstract: We study observational learning in a sequential game with strategic voting groups whose members have common values and receive independent private signals. Each group votes strategically after observing all earlier groups' decisions. Our model bridges the literatures on information cascades and strategic voting by replacing the individual decision makers in Bikhchandani et al. (1992) with the strategic voting groups in Feddersen and Pesendorfer (1998). We show that this game is not outcome-equivalent to any standard individual cascade game if and only if the voting rule is fixed across groups. We then identify the necessary condition under which a fixed rule that maximises asymptotic expected utility differs from one that maximises myopic expected utility. This difference is common and manifests differently under private versus public voting: under private voting, relatively asymmetric rules - such as unanimity - are more advantageous in the limit, whereas the opposite can hold under public voting.