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Open Rule Legislative Bargaining

Author

Listed:
  • Volker Britz

    (CER–ETH – Center of Economic Research at ETH Zurich, Zurichbergstrasse 18, 8092 Zurich, Switzerland)

  • Hans Gersbach

    (CER–ETH – Center of Economic Research at ETH Zurich, Zurichbergstrasse 18, 8092 Zurich, Switzerland)

Abstract

We consider non–cooperative bargaining on the division of a surplus under simple majority rule. We use the “open rule” bargaining protocol as originally suggested by Baron and Ferejohn (1989): Proposals can be amended before they are voted on. It is widely known that there are significant gaps in our understanding of open rule bargaining. In order to address these gaps, we provide a fresh analysis of a particularly simple class of equilibria. Our results shed new light on the efficiency and fairness implications of using an open vs. closed rule in bargaining. In particular, our results on the open rule model suggest that equilibrium delays tend to be longer, and surplus allocations tend to be less egalitarian than originally predicted by Baron and Ferejohn. Understanding the efficiency and fairness properties of different bargaining protocols is crucial for institutional design.

Suggested Citation

  • Volker Britz & Hans Gersbach, 2020. "Open Rule Legislative Bargaining," CER-ETH Economics working paper series 20/346, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    • Handle: RePEc:eth:wpswif:20-346
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Bargaining; Legislatures; Open Rules; Baron and Ferejohn; Stationary Equilibrium;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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