Information Aggregation With Delegation of Votes

ABSTRACT Liquid democracy (LD) combines elements of direct and representative democracy: voters can either vote directly or delegate their votes to others. We study its information aggregation properties in a setting with heterogeneously and privately informed independent and partisan voters. We establish that LD always has equilibria that improve welfare and information aggregation relative to direct democracy, identify economically interpretable conditions under which these gains are strict, and characterise optimal delegation for salient classes of committees. However, while delegation improves the best‐equilibrium, it can also introduce robust inefficient equilibria that perform worse than direct democracy.