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Bargaining foundations of the median voter theorem

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  • Cho, Seok-ju
  • Duggan, John

Abstract

We give a game-theoretic foundation for the median voter theorem in a one-dimensional bargaining model based on Baron and Ferejohn's [D. Baron, J. Ferejohn, Bargaining in legislatures, Amer. Polit. Sci. Rev. 83 (1989) 1181-1206] model of distributive politics. We prove that as the agents become arbitrarily patient, the set of proposals that can be passed in any pure strategy, subgame perfect equilibrium collapses to the median voter's ideal point. While we leave the possibility of some delay, we prove that the agents' equilibrium continuation payoffs converge to the utility from the median, so that delay, if it occurs, is inconsequential. We do not impose stationarity or any other refinements. Our result counters intuition based on the folk theorem for repeated games, and it contrasts with the known result for the distributive bargaining model that as agents become patient, any division of the dollar can be supported as a subgame perfect equilibrium outcome.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 144 (2009)
Issue (Month): 2 (March)
Pages: 851-868

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Handle: RePEc:eee:jetheo:v:144:y:2009:i:2:p:851-868

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Web page: http://www.elsevier.com/locate/inca/622869

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Keywords: Bargaining Median voter theorem Anti-folk theorem;

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References

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  1. Roger Lagunoff & Akihiko Matsui, 1997. "Asynchronous Choice in Repeated Coordination Games," Game Theory and Information 9707002, EconWPA.
  2. Eraslan, Hulya, 2002. "Uniqueness of Stationary Equilibrium Payoffs in the Baron-Ferejohn Model," Journal of Economic Theory, Elsevier, vol. 103(1), pages 11-30, March.
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  9. Seok-ju Cho & John Duggan, 2001. "Uniqueness of Stationary Equilibria in a one-Dimensional Model of Bargaining," Wallis Working Papers WP23, University of Rochester - Wallis Institute of Political Economy.
  10. Jeffrey S. Banks & John Duggan & Michel LeBreton, . "Bounds for Mixed Strategy Equilibria and the Spatial Model of Elections," Wallis Working Papers WP14, University of Rochester - Wallis Institute of Political Economy.
  11. Jackson, Matthew O. & Moselle, Boaz, 2002. "Coalition and Party Formation in a Legislative Voting Game," Journal of Economic Theory, Elsevier, vol. 103(1), pages 49-87, March.
  12. Banks, Jeffrey S. & Duggan, John, 1999. "A Bargaining Model of Collective Choice," Working Papers 1053, California Institute of Technology, Division of the Humanities and Social Sciences.
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  14. 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.
  15. Ariel Rubinstein, 2010. "Perfect Equilibrium in a Bargaining Model," Levine's Working Paper Archive 661465000000000387, David K. Levine.
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Citations

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Cited by:
  1. Herings, P. Jean-Jacques & Predtetchinski, Arkadi, 2010. "One-dimensional bargaining with Markov recognition probabilities," Journal of Economic Theory, Elsevier, vol. 145(1), pages 189-215, January.
  2. Levy, Gilat & Razin, Ronny, 2013. "Dynamic legislative decision making when interest groups control the agenda," Journal of Economic Theory, Elsevier, vol. 148(5), pages 1862-1890.
  3. Christopher J. Tyson, 2009. "Dominance Solvability of Dynamic Bargaining Games," Working Papers 644, Queen Mary, University of London, School of Economics and Finance.
  4. John Duggan & Tasos Kalandrakis, 2007. "Dynamic Legislative Policy Making," Wallis Working Papers WP45, University of Rochester - Wallis Institute of Political Economy.
  5. Le Breton, Michel & Thomas, Alban & Zaporozhets, Vera, 2012. "Bargaining in River Basin Committees: Rules Versus Discretion," TSE Working Papers 12-324, Toulouse School of Economics (TSE).
  6. Cardona, Daniel & Ponsati, Clara, 2011. "Uniqueness of stationary equilibria in bargaining one-dimensional policies under (super) majority rules," Games and Economic Behavior, Elsevier, vol. 73(1), pages 65-75, September.
  7. Daniel Cardona & Arnold Polanski, 2013. "Voting rules and efficiency in one-dimensional bargaining games with endogenous protocol," Social Choice and Welfare, Springer, vol. 41(2), pages 217-240, July.
  8. Maaser, Nicola & Napel, Stefan, 2012. "A note on the direct democracy deficit in two-tier voting," Mathematical Social Sciences, Elsevier, vol. 63(2), pages 174-180.
  9. Christopher J. Tyson, 2004. "Iterative Dominance and Sequential Bargaining," Economics Papers 2004-W23, Economics Group, Nuffield College, University of Oxford.

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