Freeriders and Underdogs: Participation in Corporate Voting

We document low discretionary participation in corporate voting: 24% in the U.S. and 5% outside the U.S. To interpret these patterns, we develop a rational-choice model where participation is shaped by committed regular voters. We show how this environment induces strategic substitution: shareholders with majority preferences (freeriders) abstain, relying on the votes of regulars, while those with minority preferences (underdogs) mobilize disproportionately. Structural estimation reveals that this asymmetry causes 14% of U.S. and 11% of non-U.S. proposals to fail to reflect the majority preference. Counterfactual analysis demonstrates that reducing voting costs can actually increase misrepresentation.