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The evaluation of majority rules in a legislative bargaining model

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  • Tsai, Tsung-Sheng

Abstract

A budget needs to be distributed among jurisdictions through bargaining in the legislature. Using a simple three-player, three-period Baron and Ferejohn [Baron, D.P., Ferejohn, J.A., 1989. Bargaining in legislatures. American Political Science Review 83 (4), 1181-1206] style legislative bargaining model with incomplete information, we evaluate two kinds of majority rules: the simple majority rule and the unanimity rule. Under the simple majority rule, it is less expensive to form a minimum-winning coalition, so that every type of proposer prefers his proposal to be passed immediately. The proposer has fewer incentives to reveal his information by delaying the bargaining, since there is a possibility of being excluded from the majority in future periods. Thus, in contrast to the unanimity rule, there does not exist any fully separating equilibrium. We also show that if the first-period proposer has greater agenda-setting power, it can help to reduce the probability of delay.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 37 (2009)
Issue (Month): 4 (December)
Pages: 674-684

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Handle: RePEc:eee:jcecon:v:37:y:2009:i:4:p:674-684

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Web page: http://www.elsevier.com/locate/inca/622864

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Keywords: C78 D72 P51 Majority rules Legislative bargaining Seniority system;

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References

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  1. Rubinstein, Ariel, 1985. "A Bargaining Model with Incomplete Information about Time Preferences," Econometrica, Econometric Society, vol. 53(5), pages 1151-72, September.
  2. Diermeier, Daniel & Merlo, Antonio, 2004. "An empirical investigation of coalitional bargaining procedures," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 783-797, March.
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  9. Mailath, George J, 1987. "Incentive Compatibility in Signaling Games with a Continuum of Types," Econometrica, Econometric Society, vol. 55(6), pages 1349-65, November.
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  12. Harrington, Joseph E, Jr, 1990. " The Role of Risk Preferences in Bargaining When Acceptance of a Proposal Requires Less than Unanimous Approval," Journal of Risk and Uncertainty, Springer, vol. 3(2), pages 135-54, June.
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Cited by:
  1. Chen, Ying & Eraslan, Hulya, 2014. "Rhetoric in legislative bargaining with asymmetric information," Theoretical Economics, Econometric Society, vol. 9(2), May.
  2. Chen, Ying & Eraslan, Hülya, 2013. "Rhetoric in legislative bargaining with asymmetric information," Discussion Paper Series In Economics And Econometrics 1309, Economics Division, School of Social Sciences, University of Southampton.
  3. Ying Chen, 2010. "Rhetoric in Legislative Bargaining with Asymmetric Information," 2010 Meeting Papers 1159, Society for Economic Dynamics.

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