Get Rid of Unanimity: The Superiority of Majority Rule with Veto Power

Consider a group of agents whose goal is to reform the status quo if and only if this is Pareto improving. Agents have private information and may have common or private objectives, which creates a tension between information aggregation and mi-nority protection. We propose a simple voting system-majority rule with veto power-that essentially resolves this tension, for it combines the advantageous properties of both majority and unanimity rules. We argue that our results shed new light on the evolution of voting rules in EU institutions and could guide policy reforms in cases such as juries in the US. JEL Classi\u85cation: D7