Resource title

An empirical comparison of the performance of classical power indices

Resource image

image for OpenScout resource :: An empirical comparison of the performance of classical power indices

Resource description

Power indices are general measures of the relative a priori voting power of individual members of a voting body. They are useful for both positive and normative analysis of voting bodies particularly those using weighted voting. This paper applies new algorithms for computing the rival Shapley-Shubik and Banzhaf indices for large voting bodies to shareholder voting power in a cross section of British companies. Each company is a separate voting body and there is much variation in ownership between them resulting in different power structures. Because the data are incomplete, both finite and “oceanic” games of shareholder voting are analysed. The indices are appraised, using reasonable criteria, from the literature on corporate control. The results are unfavourable to the Shapley-Shubik index and suggest that the Banzhaf index much better reflects the variations in the power of shareholders between companies as the weights of shareholder blocs vary.

Resource author

Resource publisher

Resource publish date

Resource language

en

Resource content type

application/pdf

Resource resource URL

http://eprints.lse.ac.uk/650/1/PolStud.pdf

Resource license