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Legislative Bargaining with Reconsideration

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  • Daniel Diermeier
  • Pohan Fong
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    Abstract

    We present a dynamic model of legislative bargaining with an endogenously evolving default policy and a persistent agenda setter. Policy making proceeds until the agenda setter can no longer pass a new policy to replace an approved bill. We prove existence and necessary conditions of pure-strategy stationary equilibria for any finite policy space, any number of players, and any preference profile. In equilibrium, the value of proposal power is limited compared to the case that disallows reconsideration, as voters are induced to protect each other's benefits to maintain their future bargaining positions. The agenda setter, in turn, would prefer to limit his ability to reconsider. The lack of commitment due to the possibility of reconsideration, however, enhances policy efficiency. Copyright 2011, Oxford University Press.

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    Bibliographic Info

    Article provided by Oxford University Press in its journal The Quarterly Journal of Economics.

    Volume (Year): 126 (2011)
    Issue (Month): 2 ()
    Pages: 947-985

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    Handle: RePEc:oup:qjecon:v:126:y:2011:i:2:p:947-985

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    7. Pohan Fong & Daniel Diermeier, 2008. "Endogenous Limits on Proposal Power," 2008 Meeting Papers, Society for Economic Dynamics 521, Society for Economic Dynamics.
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    Cited by:
    1. Facundo Piguillem & Alessandro Riboni, 2013. "Spending Biased Legislators - Discipline Through Disagreement," EIEF Working Papers Series, Einaudi Institute for Economics and Finance (EIEF) 1317, Einaudi Institute for Economics and Finance (EIEF), revised Jul 2013.
    2. Matthias Dahm & Amihai Glazer, 2012. "How An Agenda Setter Induces Legislators to Adopt Policies They Oppose," Working Papers, University of California-Irvine, Department of Economics 111211, University of California-Irvine, Department of Economics.
    3. Dahm, Matthias & Glazer, Amihai,, 2013. "A Carrot and Stick Approach to Agenda-Setting," Working Papers, Universitat Rovira i Virgili, Department of Economics 2072/222199, Universitat Rovira i Virgili, Department of Economics.
    4. Bowen, T. Renee & Zahran, Zaki, 2009. "On Dynamic Compromise," Research Papers, Stanford University, Graduate School of Business 2020, Stanford University, Graduate School of Business.
    5. 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, Elsevier, vol. 76(1), pages 349-353.
    6. Daniel Diermeier & Georgy Egorov & Konstantin Sonin, 2013. "Endogenous Property Rights," NBER Working Papers 19734, National Bureau of Economic Research, Inc.
    7. Vincent Anesi & Daniel J Seidmann, 2012. "Bargaining over an Endogenous Agenda," Discussion Papers, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham 2012-03, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    8. John Duggan & Tasos Kalandrakis, 2007. "Dynamic Legislative Policy Making," Wallis Working Papers, University of Rochester - Wallis Institute of Political Economy WP45, University of Rochester - Wallis Institute of Political Economy.
    9. Dahm, Matthias & Glazer, Amihai, 2010. "Repeated Agenda Setting and the Unanimous Approval of Bad Policies," Working Papers, Universitat Rovira i Virgili, Department of Economics 2072/151549, Universitat Rovira i Virgili, Department of Economics.
    10. Baron, David P. & Bowen, T. Renee, 2013. "Dynamic Coalitions," Research Papers, Stanford University, Graduate School of Business 2128, Stanford University, Graduate School of Business.
    11. Jon X. Eguia & Kenneth A. Shepsle, 2014. "Endogenous Assembly Rules, Senior Agenda Power, and Incumbency Advantage," Bristol Economics Discussion Papers 14/638, Department of Economics, University of Bristol, UK.

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