ABSTRACT
This chapter deals with the voluntary solutions to market failure. There are many explanations in the social sciences for the fact that people join groups, but economic models focus on securing gains and avoiding costs. The best-known treatment is by James Buchanan and Gordon Tullock in their influential book The Calculus of Consent. The Buchanan and Tullock model has several important implications on voting rules. One is that a person may prefer different voting rules for different situations, depending on an assessment of personal costs. The second implication is that unanimity may be very expensive as a general decision rule. Third implication is the nature of the group may affect total costs and the choice of the most efficient decision rule. A fourth implication is that majority rule isn't necessarily an efficient decision rule. Fifth implication is the voluntary acceptance of coercion by an individual is applicable to both clubs and governments.
