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Dynamic bargaining and stability with veto players

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  • Anesi, Vincent
  • Duggan, John

Abstract

This note examines the structure of stationary bargaining equilibria in the finite framework of Anesi (2010). The main result establishes a tight connection between the set of equilibrium absorbing points and the von Neumann–Morgenstern solutions: assuming that players are patient, that the voting rule is oligarchical, and that there is at least one veto player with positive recognition probability, a set of alternatives corresponds to the absorbing points of an equilibrium if and only if it is a von Neumann–Morgenstern solution. We also apply our analysis of ergodic properties of equilibria to the persistent agenda setter environment of Diermeier and Fong (2012). We show that all equilibria are essentially pure, and we extend their characterization of absorbing sets to allow an arbitrary voting rule and by removing the restriction to pure strategy equilibria.

Suggested Citation

  • Anesi, Vincent & Duggan, John, 2017. "Dynamic bargaining and stability with veto players," Games and Economic Behavior, Elsevier, vol. 103(C), pages 30-40.
    • Handle: RePEc:eee:gamebe:v:103:y:2017:i:c:p:30-40
    DOI: 10.1016/j.geb.2016.04.010
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    References listed on IDEAS

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    1. Bowen, T. Renee & Zahran, Zaki, 2012. "On dynamic compromise," Games and Economic Behavior, Elsevier, vol. 76(2), pages 391-419.
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    3. Duggan, John & Kalandrakis, Tasos, 2012. "Dynamic legislative policy making," Journal of Economic Theory, Elsevier, vol. 147(5), pages 1653-1688.
    4. , & , J., 2014. "Bargaining over an endogenous agenda," Theoretical Economics, Econometric Society, vol. 9(2), May.
    5. Vincent Anesi, 2012. "A new old solution for weak tournaments," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 39(4), pages 919-930, October.
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    9. Anesi, Vincent, 2010. "Noncooperative foundations of stable sets in voting games," Games and Economic Behavior, Elsevier, vol. 70(2), pages 488-493, November.
    10. Diermeier, Daniel & Fong, Pohan, 2012. "Characterization of the von Neumann–Morgenstern stable set in a non-cooperative model of dynamic policy-making with a persistent agenda setter," Games and Economic Behavior, Elsevier, vol. 76(1), pages 349-353.
    11. Kalandrakis, Anastassios, 2004. "A three-player dynamic majoritarian bargaining game," Journal of Economic Theory, Elsevier, vol. 116(2), pages 294-322, June.
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    13. McKelvey, Richard D. & Ordeshook, Peter C. & Winer, Mark D., 1978. "The Competitive Solution for N-Person Games Without Transferable Utility, With an Application to Committee Games," American Political Science Review, Cambridge University Press, vol. 72(2), pages 599-615, June.
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    Cited by:

    1. Nunnari, Salvatore, 2021. "Dynamic legislative bargaining with veto power: Theory and experiments," Games and Economic Behavior, Elsevier, vol. 126(C), pages 186-230.
    2. Zapal, Jan, 2020. "Simple Markovian equilibria in dynamic spatial legislative bargaining," European Journal of Political Economy, Elsevier, vol. 63(C).
    3. Vincent Anesi, 2018. "Dynamic Legislative Policy Making under Adverse Selection," Discussion Papers 2018-08, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    4. Jindapon, Paan & Van Essen, Matt, 2019. "Political business cycles in a dynamic bipartisan voting model," Mathematical Social Sciences, Elsevier, vol. 102(C), pages 15-23.

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    More about this item

    Keywords

    Bargaining; Endogenous status quo; Markov perfect equilibrium; Von Neumann–Morgenstern solution;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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