A random individual i has to organize an important voting of the country’s X parliament regarding the implementation of policy Y .
b) Given that Ψ(N) = αβN^4 and Φ(N) = αln(β) + 2N^−2 with α,β > 0, explain which function describes the decision and which one the external costs and why. Find the N∗.
c) What if N∗ = 1? What does it mean for the decision-making mechanism? Explain the advantages and disadvantages of this case. What if N∗ = 0? What does it mean for the external costs and what can you say about the political regime’s type in this case?
b) The voters have the same preferences with above but now voter 3 becomes the agendasetter. Suppose that you are voter 3. Specify the optimal and worst agenda from your perspective, given that the others vote sincerely. Suppose now that you always follow the optimal agenda from your perspective. Is it better for voter 1 to vote sincerely or strategically? Can voter 1 improve her welfare by following a different strategy on voting? Explain
b) Find the conditions for a Condorcet winner not to exist. Verify that there is no Condorcet winner when y = b = 1/a and y = 11/10.
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