Final answer:
Voting is beneficial for small shareholders as it allows them to participate in the company's governance, although larger shareholders have more influence. Rational ignorance may discourage voting if the perceived impact of one's vote is minimal compared to the effort required to cast it.
Step-by-step explanation:
The question relates to the significance of voting for small shareholders in a public company, where shareholders participate in electing a board of directors. Small shareholders might find the act of voting beneficial as it allows them to have a say in the company's strategic decisions, despite their relatively minor individual influence. Voting offers shareholders a mechanism to express their preferences and can cumulatively impact corporate governance. However, because each vote is proportional to the number of shares owned, large shareholders exert more influence over the outcome. Nonetheless, small shareholders' votes are part of the collective decision-making process and contribute to the health of the corporate governance system.
The concept of rational ignorance, which suggests that individuals may abstain from voting if the costs of becoming informed and voting outweigh the perceived impact of their single vote, can apply to shareholders as well. In large-scale elections, as in public companies with many shareholders, individuals might perceive their vote as insignificant in swaying electoral outcomes, possibly discouraging participation.