Voting outcomes can differ from underlying preferences due to strategic selection into voting. One explanation for such selection effects is lower participation of shareholders with popular preferences (free-rider effect) relative to those with unpopular preferences (underdog effect).
We illustrate these effects in a rational choice model in which the voting participation decision depends on the probability of being pivotal and the costs and benefits of voting. Based on the model, we structurally estimate unobservable shareholder preferences. Using US data, we show that strategic selection into voting is relevant: 13% of voting outcomes in governance shareholder proposals represent only the minority.
We analyze the impact of a large shareholder disclosing its voting decisions prior to shareholder meetings on final vote outcomes for management and...
The rapid growth in index funds and significant consolidation in the asset-management industry over the past few decades has led to higher levels of...