The Effects of Inequality in Majority Decisions

The so-called chaos-theorems have greatly influenced the discussion of the viability of democracy. Under majority rule in two or more dimensions, these theorems make a very precise point prediction if the preference configuration of voters meets certain symmetry conditions. Otherwise, majority voting is unrestricted and can reach any point in the policy space. The existing experimental evidence on the predictability of majority rule shows that voting results converge towards the predicted point if the symmetry conditions are met and thus an equilibrium exists. In the paper I challenge this consensus by linking majority rule to behavioral theories incorporating social preferences such as fairness, altruism or reciprocity in individual utility functions. I present findings from laboratory experiments on majority decision making in committees showing systemic deviations from the equilibrium if the theoretically predicted outcome is characterized by an unfair distribution of payouts.