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Group size and decision rules in legislative bargaining

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  • Vanberg, Christoph
  • Miller Moya, Luis Miguel

Abstract

We conduct experiments to investigate the effects of different majority requirements on bargaining outcomes in small and large groups. In particular, we use a Baron-Ferejohn protocol and investigate the effects of decision rules on delay (number of bargaining rounds needed to reach agreement) and measures of "fairness" (inclusiveness of coalitions, equality of the distribution within a coalition). We find that larger groups and unanimity rule are associated with significantly larger decision making costs in the sense that first round proposals more often fail, leading to more costly delay. The higher rate of failure under unanimity rule and in large groups is a combination of three facts: (1) in these conditions, a larger number of individuals must agree, (2) an important fraction of individuals reject offers below the equal share, and (3) proposers demand more (relative to the equal share) in large groups.

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Paper provided by University of the Basque Country - Department of Foundations of Economic Analysis II in its series DFAEII Working Papers with number DFAE-II;2014-01.

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Handle: RePEc:ehu:dfaeii:11746

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Postal: Dpto. de Fundamentos del Análisis Económico II, = Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
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Keywords: majority rule; unanimity rule; legislative bargaining;

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  1. John Kagel & Hankyoung Sung & Eyal Winter, 2010. "Veto power in committees: an experimental study," Experimental Economics, Springer, vol. 13(2), pages 167-188, June.
  2. Frechette, Guillaume & Kagel, John H. & Morelli, Massimo, 2005. "Nominal bargaining power, selection protocol, and discounting in legislative bargaining," Journal of Public Economics, Elsevier, vol. 89(8), pages 1497-1517, August.
  3. Drouvelis, Michalis & Montero, Maria & Sefton, Martin, 2010. "Gaining power through enlargement: Strategic foundations and experimental evidence," Games and Economic Behavior, Elsevier, vol. 69(2), pages 274-292, July.
  4. Maria Montero & Martin Sefton & Ping Zhang, 2005. "Enlargement and the Balance of Power: An Experimental Study," Experimental 0507001, EconWPA.
  5. Luis Miller & Christoph Vanberg, 2011. "Decision costs in legislative bargaining: An experimental analysis," Discussion Papers 2011002, University of Oxford, Nuffield College.
  6. G Frechette & J Kagel & M Morelli, 2004. "Behavioral Identification in Coalition Bargaining: An Experimental Analysis of Demand Bargaining and Alternating Offers," Levine's Bibliography 122247000000000006, UCLA Department of Economics.
  7. Norman,P., 2000. "Legislative bargaining and coalition formation," Working papers 12, Wisconsin Madison - Social Systems.
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