We study the interaction between competitive markets that produce large but unequally distributed welfare gains and elections through which the poor majority can redistribute income away from the rich minority. In our simple laboratory democracy, subjects first earn their income by trading in a...

Due to its simplicity the plurality voting system is frequently used to choose a common representative or project. Nevertheless it may fail to provide a socially efficient decision as a majority can outvote any minority even if the majority’s gain does not compensate the loss suffered by the...

In procurement auctions, bidders are usually better informed about technical, financial, or legal aspects of the goods and services procured. Therefore, the buyer may include a dialogue in the procurement procedure which enables the suppliers to reveal information that will help the buyer to...