Legislative Bargaining and Coalition Formation

SSRI Working Paper No. 2012

33 Pages Posted: 16 Nov 2000

See all articles by Peter Norman

Peter Norman

University of British Columbia - Department of Economics

Date Written: August 2000

Abstract

The finite horizon version of a popular legislative bargaining model due to Baron and Ferejohn is investigated. With three or more rounds of bargaining a continuum of distributions are supportable as subgame perfect equilibria in Markov strategies. Allowing for history dependent strategies subgame perfect equilibria can be constructed where strictly positive shares are given to a larger group of people than necessary for a minimal winning coalition and, if players are sufficiently patient, any distribution where every agent get a strictly positive share can be supported as a subgame perfect equilibrium. In sharp contrast to these results I obtain a generic uniqueness result when allowing for differences in players' time preferences. However, the unique backwards induction equilibrium in the perturbed game is non-stationary. Hence, neither the original (symmetric) game or the perturbed game provides any guidance for equilibrium selection in the infinite game.

JEL Classification: C73, C78, D72, D78, H49

Suggested Citation

Norman, Peter, Legislative Bargaining and Coalition Formation (August 2000). SSRI Working Paper No. 2012, Available at SSRN: https://ssrn.com/abstract=249190 or http://dx.doi.org/10.2139/ssrn.249190

Peter Norman (Contact Author)

University of British Columbia - Department of Economics ( email )

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(604) 822-2839 (Phone)

HOME PAGE: http://faculty.arts.ubc.ca/pnorman/

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