AN EXPERIMENTAL STUDY ON STRATEGIC VOTING

Abstract

All the economic theories rest on a very vital assumption of perfectly rational behavior adopted by every economic agent participating in the process. Application of behavioral methodologies to Political Economics show that individuals are more susceptible to biases and various cognitive problems in the political field, which ultimately may not result in people making sincere choices. Using a voting game, the study aims at identifying whether heterogeneous economic agents make decisions which are perfectly rational or bounded rational and what factors contribute to their decision making. For this purpose, Quantal Response Equilibrium (QRE) models the situation as a strategic game first to formulate behavioral predictions from it which are then eventually compared with the experimental results. The results suggest, while perfect rationality predicts complete sincere voting, bounded rationality shows a significant proportion of strategic behavior. Furthermore, the study finds out that limited amount of information always distorts the judgement as compared to no information where people adhere to their preferences and full information where they make decisions based on the best of their knowledge & all available information.