Quadratic voting is a collective decision-making procedure which involves individuals allocating votes to express the degree of their preferences, rather than just the direction of their preferences. By doing so, quadratic voting seeks to address issues of voting paradox and majority rule. Quadratic voting works by allowing users to "pay" for additional votes on a given matter to express their support for given issues more strongly, resulting in voting outcomes that are aligned with the highest willingness to pay outcome, rather than just the outcome preferred by the majority regardless of the intensity of individual preferences. The payment for votes may be through either artificial or real currencies (e.g. with tokens distributed equally among voting members or with real money). Quadratic voting is a variant of cumulative voting in the class of cardinal voting. It differs from cumulative voting by altering "the cost" and "the vote" relation from linear to quadratic.
Quadratic voting is based upon market principles, where each voter is given a budget of vote credits that they have the personal decisions and delegation to spend in order to influence the outcome of a range of decisions. If a participant has a strong support for or against a specific decision, additional votes could be allocated to proportionally demonstrate the voter's support. A vote pricing rule determines the cost of additional votes, with each vote becoming increasingly more expensive. By increasing voter credit costs, this demonstrates an individual's support and interests toward the particular decision. If money is used, it is eventually cycled back to the voters based upon per capita. Both E Glen Weyl and Steven Lalley conducted research in which they claim to demonstrate that this decision-making policy expedites efficiency as the number of voters increases. The simplified formula on how quadratic voting functions is
cost to the voter = (number of votes)²
The quadratic nature of the voting suggests that a voter can use their votes more efficiently by spreading them across many issues. For example, a voter with a budget of 16 vote credits can apply 1 vote credit to each of the 16 issues. However, if the individual has a stronger passion or sentiment on an issue, they could allocate 4 votes, at the cost of 16 credits, to the singular issue, effectively using up their entire budget. This mechanism towards voting demonstrates[according to whom?] that there is a large incentive to buy and sell votes, or to trade votes. Using this anonymous ballot system provides identity protection from vote buying or trading, since these exchanges cannot be verified by the buyer or trader.
Quadratic Voting: How Mechanism Design Can Radicalize Democracy
Steven Lalley, E. Glen Weyl