Utility functions for public outputs and majority Voting

This paper studies the existence and stability of majority voting equilibria over sequences of one-dimensional choice problems, in the public sector. Voters ’ public sector preferences are derived from their ‘primitive ’ preferences over public outputs and private consumption by maximizing the latter out. If agents ignore the potential effects of public sector states on private sector prices, we find that majority voting equilibria will exist under the usual assumptions. But these equilibria are not stable unless the primitive utility functions are separable and admit no wealth effects on demand for public goods. If agents do take account of the effects of public sector states on private sector prices, voting cycles may arise even when the choice space is one dimensional. 1