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Political Votes as a Market

An example of a real-world situation that can broadly be viewed as a market is the market for “votes” in the House of Representatives. In this market, votes, from representatives, are being exchanged or allocated to bills. Representatives can decide how to allocate these votes based on their own political preferences or needs. Preferences may refer to something such as ideology while needs may refer to something such as ‘the need to pass their own bill’ so they may trade votes. If one were to argue for a currency in this economy, the best example of a currency would likely be ‘support on future bills’. If some representative gives his or her vote away to another representative, on a bill they really have no vested interest, they likely will seek support or some other political favor in the future. This ‘currency’ will not necessarily be traded because in some cases a politician might just vote in favor of a bill because it fits with their ideology rather than because they expect to get something out of it.

An example of a market design employed in this ‘market’ is the rule for how an agent will distribute his or her votes in a given congressional session.  For example, an agent (representative) will usually follow the following steps: 1) if they sponsored a bill, they will allocate their vote to this bill 2) if they did not sponsor this bill, then they look to see whether the bill aligns with their party agenda/their own ideology, if so they might allocate their vote to this bill 3) if they see room for personal gain, politically or personally, then they will vote in favor of the bill. This ruleset for how some representative votes is not necessarily substantive, as there is a comprehensive literature on voting behaviors amongst legislators which suggests factors such as religion and schooling background might also play a role in determining how a legislator will allocate their vote. The three listed rules are important, however, because if a representative were to randomly assign votes it would throw the market into disarray as there would be no clear indicator to outside parties (for example: constituents, lobbyists, and companies) which bills are going to pass and within the market representatives would have a hard time gathering support for their bills as there would be no clear indication who they should ask for support.




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