Do you assume that deciding by majority rule is fair, or that whatever is decided by majority rule is correct?

"In fact, majority rule sometimes fails to reflect not only minority opinions but even the majority opinion."

In his 2015 bestseller "Doubting Majority Rule: What is Social Choice Theory?" (Iwanami Shinsho), Professor Sakai posed a fundamental question to those of us who have accepted majority rule as a naturally "correct system."

For example, suppose that in a certain election, Candidate A receives 49% of the vote, B receives 48%, and C receives 3%. The winner is A, but what if the majority of C's supporters preferred B over A? If C had not run, those 3% of the votes might have gone to B, potentially reversing the outcome between A and B.

In elections, when multiple candidates with similar policies or support bases run, the votes that should have gone to that camp end up being split. Professor Sakai says that this kind of "vote splitting" can often occur in single-seat constituencies for the House of Representatives or the House of Councillors.

It is called "majority" rule, yet it does not result in the outcome the majority wants. If so, what exactly is majority rule? Professor Sakai goes so far as to state that it is "nothing more than a cultural oddity with very poor performance."

"The advantages of majority rule are that it is simple, easy to understand, everyone knows the rules, and it is easy to tally. There was a rationality to it in the past, but in modern society where ballot readers and the internet are widespread, that rationality has already been lost."

One alternative voting system Professor Sakai points to is the "Borda count."

"If you make voting a point-based system, giving 3 points for 1st place, 2 points for 2nd, and 1 point for 3rd, it becomes easier for a candidate who is acceptable to more voters to be elected. Alternatively, there is an even better method called Majority Judgment."

Majority Judgment is a system where each candidate is given an absolute evaluation, and the winner is determined by the median score. It is characterized by being less prone to vote splitting between candidates with similar positions and less likely to be influenced by extreme evaluations.

If the essence of democracy is that it is "not just for the majority, but for everyone," then the Borda count or Majority Judgment, which can comprehensively tally everyone's degree of preference, is far better suited to democracy than simple majority rule. Professor Sakai asks us:

"If the rules for aggregating people's intentions change, the results change. What we call the 'will of the people' does not exist beforehand; it is merely a result that appears for the first time through the aggregation rules."

Professor Sakai's specialty, "mechanism design," is, in a word, the "manufacturing" of social systems. We tend to view social systems as things that have existed from the beginning, like mountains or the sea, but Professor Sakai argues that "since social systems were made by humans, humans should be able to change them."

However, if you are born and raised within that system, it is difficult to harbor doubts. This is because when people understand something, they need a comparison with something else.

"If you only know democracy, you cannot think deeply about democracy. You need to understand the rationality of existing systems and then move beyond them. I believe that academia is about verbalizing and sublimating the sense of discomfort that says, 'Isn't this strange?'"

Professor Sakai himself was a child sensitive to "discomfort." When he was in elementary school, he was severely scolded by a teacher for fooling around in the hallway with a friend. Furthermore, he was made to stand in front of the classroom, and the entire class voted on "whether or not Sakai and his friend had done something bad."

"I was found 'guilty' by an overwhelming majority. But even as a child, I thought it was very strange. Whether I was fooling around or not should be a matter of fact-finding, not something to be decided by a vote."

What things are okay to decide by vote, and what things should not be? This question became the starting point of his research life.

At age 18, he left his hometown of Hiroshima and moved to Tokyo to enroll in the Waseda University Faculty of Business and Commerce. At university, he discovered the "fun of designing systems." He studied the "Taylor System," which scientifically optimizes factory production processes, and was strongly drawn to the idea that "science can be applied even to how a factory is built. If you optimize it, things will proceed smoothly."

Meanwhile, as a university student, he devoted himself to theater, appearing in musicals with a student theater troupe, and later joined the professional troupe Studio Life through an audition. He was a classmate of Miho Araki, a resident director at Shiki Theatre Company, and they once performed as the lead musical duo. Studio Life is a unique troupe where men also play female roles, and Professor Sakai says, "It was the precursor to 2.5D theater, but it was too far ahead of its time. The BL boom hadn't arrived yet either." He appeared in "The Heart of Thomas," based on the work by Moto Hagio, playing the role of the protagonist's mother (photo below provided by Professor Sakai).

However, it was difficult to make money in theater, and he finally realized in his senior year of university that he "couldn't possibly make a living at it." But because he hadn't done any job hunting, he had no career path. So, he decided to study, thinking, "I'll tackle something I've never taken seriously before." He chose economics because "it felt like even without an accumulation of knowledge, I could manage if I could do calculus."

He went on to graduate school at Kobe University to study under Professor Toyoaki Washida. He says, "I have a habit of unconditionally trusting people who have 'Toyo' in their name." After enrolling, he received guidance from Professor Jun Iritani and devoted himself to mathematical economics. His mathematical ability, which had been just enough to do calculus, reached the point where he could study Bourbaki's set theory and prove that "1+1=2" two years later.

"Papers on mechanism design and social choice theory require set-theoretic techniques that build logic step by step. That analytical method suited me. This isn't about me being superior or inferior; it's simply a matter of aptitude. I think there is tremendous diversity in human brains, and everyone is suited for something. I was lucky enough to encounter mine." The expressive power he cultivated in theater also proved useful for writing papers and giving conference reports.

In his master's thesis, he analyzed a method for evaluating intertemporal utility vectors without using a "discount rate" to discount future utility. This paper was highly acclaimed, leading him to study abroad at the University of Rochester in the U.S. In his first year, he felt frustrated being left in the dust by the great geniuses gathered from all over the world. However, from his second year, he demonstrated his strength in his specialized field and ultimately obtained his doctorate in an exceptionally short time of about three and a half years.

Creating systems that lead to socially desirable outcomes under the premise that each individual acts to maximize their own self-interest—that is the essence of "mechanism design." When he began teaching, a student asked him a question: "If there are superior systems, why aren't they used in the world?"

"Many people think that bad systems will be weeded out and good systems will be used, but in reality, that's not the case. Unless there is a benefit for the people who have the power to change the system, they won't change it," says Professor Sakai.

Professor Sakai says, "I wanted a representative work that I could be proud of to myself and others, something I could say I did in my life."

He believed that his representative work should be an inexpensive book read by many people, rather than a research paper. This is because he feels that in the social sciences, which deal with society, a field of study that does not reach ordinary people is as good as non-existent. Thus, "Doubting Majority Rule," which he wrote in his 30s for Iwanami Shinsho, became a bestseller. It was also adopted for high school Japanese textbooks and remains a staple of university entrance exam questions.

Having suddenly become a figure of public attention, Professor Sakai, wanting to change the "distorted way of deciding" that is majority rule, conducted hundreds of interviews and lectures, and continued to explain his theories to the media and politicians. However, a few years later, he decided to scale back those activities.

"It's obvious, but the world doesn't change easily. To change the electoral system, you need the approval of the ruling party, but they are the ruling party precisely because of the current electoral system. There is no incentive to change it, or it is very weak."

Professor Sakai then moved his field of activity from elections and public discourse to markets and business. At Due Diligence & Deal Co., Ltd., he was engaged in developing auction methods that allow real estate to be sold at high prices, and from there, he became an advisor to many companies.

"Companies will adopt good things. Because it leads to profit. The speed of adoption is also fast."

At Mercari, Inc., he played an important role in formulating the "Principles," the rules determining the permissibility of reselling, and continues to serve as an advisor. In 2020, he co-founded Economics Design Inc., which performs business implementation of economics.

"I was convinced that the wind was finally about to blow in Japan. I wanted to create Japan's first full-fledged economics consultation firm."

What he is currently most passionate about is "prediction markets."

This is a participatory service where people buy and sell tickets predicting whether future events "will happen" or "will not happen," with the U.S.-based "Polymarket" being famous. It is also attracting academic attention as a mechanism to aggregate people's knowledge and information through financial incentives (stimuli) to improve the accuracy of future predictions.

For example, suppose there is a "ticket that pays $1 if Mr. Trump wins the U.S. presidential election." People who think Mr. Trump will win buy the ticket, and those who think he will lose sell it. If many participants think "Mr. Trump is likely to win," the ticket will be bought and the price will rise; conversely, if they think "he is likely to lose," it will be sold and the price will fall.

From economic theory and past research data, it is known that this "ticket transaction price" can, in a sense, be interpreted as the "probability" of that event occurring.

"If the transaction price of a ticket in the market is $0.9, we interpret the probability of winning as about 90%. This is more accurate than opinion polls," says Professor Sakai.

The reason is clear. Only people interested in the topic participate in prediction markets, and those with more information or confidence invest larger amounts. The dispersed knowledge held by people is visualized in the form of prices.

However, prediction markets where money is wagered are highly likely to be considered gambling offenses in Japan. There is also a risk of violating the Financial Instruments and Exchange Act. Participation must be avoided.

However, it is legally possible to operate prediction markets using things like points that only have value within a community and cannot be exchanged for cash. For example, setting up a prediction market about internal company trends using points that only have value within the company. You could set up an internal prediction market for questions like, "Will this important project be completed within the year as scheduled?"

"It is not easy for management to pick up the true feelings of those on the ground. The worse the information, the less likely it is to come up."

Since employees who know the signs of failure participate more actively in trading, management can detect risks on the ground at an early stage from changes in prices.

"Similar initiatives have been carried out at Google and elsewhere. In 10 years, I think it will be widely popular in Japan as a method of corporate governance."

Prediction markets have spread to a wide range of fields, including sports, monetary policy, and weather. Professor Sakai believes that in the future, they will change the way decision-making is done not only in corporate management but in society as a whole.

"Predictions have enormous economic value. People tend to be more serious when wagering money rather than just points. In the future, prediction markets should be treated as a different genre from gambling or finance. There will likely be a difference in international competitiveness between countries where it is easy to predict and those where it is not."

He is also interested in designing new economic infrastructure in digital spaces. He particularly values blockchain. He is also involved in crypto-asset businesses.

"What I'm interested in is a mechanism where there is no centralized management entity, and while each participant pursues their own interest, an orderly system is maintained as a whole. Bitcoin operates autonomously without a central power like a state or a bank. That's what's interesting about it."

For Professor Sakai, what is a "good society" or a "beautiful society"?

"The amount of freedom is my measure of a society's goodness. Therefore, I want to contribute to expanding social freedom."

However, if individual freedom is maximized indefinitely, society might collapse into pieces. In situations where a major direction must be decided by everyone, how will individual freedom be harmonized?

Professor Sakai presents his clear thinking by citing the "harm principle" proposed by the British philosopher John Stuart Mill.

"The point of Mill's harm principle is that society should not impose restrictions unless what someone does causes what can be called substantial 'harm' to others. Simply feeling 'uncomfortable' yourself is not grounds for restricting another person's actions. I hope this way of thinking becomes more widespread in the world. Everyone tolerating the 'discomfort' of what others choose to do—that is very important."

Composition: Toru Tamakawa, Editor-in-Chief of Asahi Shimbun GLOBE+

Interview and Text: Maiko Watanabe

Photography: Hidehiro Yamada