Ensuring a representative referendum outcome: the daunting task of setting the quorum right

The majority of the participating voters in referenda does not necessarily reflect the majority of the whole population since voters can abstain. This paper shows that although the quorum can be set such that the outcome of the referendum coincides with the population preference, the necessary assumptions make practical implementation unrealistic. Moreover, a second equilibrium can exist in which the proposal is always rejected. When insufficient information makes the optimal quorum unknown, it is in general more harmful to set the quorum too high than too low. Robustness of the results is analyzed by allowing pressure groups to encourage or discourage participation after the quorum is set.