Advanced Search
MyIDEAS: Login

A Theory of Political Influence and Economic Organization


Author Info

  • Luis Sanchez-Mier

    (Department of Economics and Finance, Universidad de Guanajuato)

Registered author(s):


    I propose a cooperative game theory model of economic reform in a political environment with interest groups. Agents in a better economic position have strategic advantage in formulating economic policy. Agents bargain over policies because they are associated with different income distributions. In this context I examine the robustness of the `Coase Theorem' prediction of efficient bargaining. I use the Aspiration Core and the Aspiration Bargaining Set as solutions to the cooperative game. Even under zero transaction costs, if endogenous coalition formation is allowed, bargaining between interest groups need not result in efficient economic change because the core may be empty. Indeed, I show that there are inefficient equilibrium outcomes if and only if the core is empty.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL:
    Download Restriction: no

    Bibliographic Info

    Paper provided by Universidad de Guanajuato, Department of Economics and Finance in its series Department of Economics and Finance Working Papers with number EC200504.

    as in new window
    Length: 30 pages
    Date of creation: Jan 2005
    Date of revision:
    Handle: RePEc:gua:wpaper:ec200504

    Contact details of provider:
    Postal: UCEA-Campus Marfil, Fracc. I, El Establo, Guanajuato GTO 36250
    Phone: [+52 473] 735 2925 x-2925
    Fax: [+52 473] 735 2925 x-2925
    Web page:
    More information through EDIRC

    Related research

    Keywords: Political Economy; Interest Groups; Institutional Change; Coalition Formation; Cooperative Games; Aspiration Solution Concepts;

    Find related papers by JEL classification:


    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Vega-Redondo, F., 1990. "Technological Change and Institutional Inertia; A Co-Evolutionary Model with Two Hierarchical Levels," UFAE and IAE Working Papers 146.90, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    2. Philip J. Reny & Eyal Winter & Myrna Wooders, 2009. "The Partnered Core of a Game with Side Payments," Vanderbilt University Department of Economics Working Papers 0917, Vanderbilt University Department of Economics.
    3. Bennett, Elaine & Zame, William R, 1988. "Bargaining in Cooperative Games," International Journal of Game Theory, Springer, vol. 17(4), pages 279-300.
    4. Aivazian, Varouj A & Callen, Jeffrey L & Lipnowski, Irwin, 1987. "The Coase Theorem and Coalitional Stability," Economica, London School of Economics and Political Science, vol. 54(216), pages 517-20, November.
    5. Rodrik, Dani, 1993. "The Positive Economics of Policy Reform," American Economic Review, American Economic Association, vol. 83(2), pages 356-61, May.
    6. Aivazian, Varouj A & Callen, Jeffrey L, 1981. "The Coase Theorem and the Empty Core," Journal of Law and Economics, University of Chicago Press, vol. 24(1), pages 175-81, April.
    7. Vega-Redondo, Fernando, 1993. "Technological Change and Institutional Inertia: A Game-Theoretic Approach," Journal of Evolutionary Economics, Springer, vol. 3(3), pages 199-224, August.
    8. Aumann, Robert J & Kurz, Mordecai, 1977. "Power and Taxes," Econometrica, Econometric Society, vol. 45(5), pages 1137-61, July.
    9. Jingang Zhao, 2001. "The relative interior of the base polyhedron and the core," Economic Theory, Springer, vol. 18(3), pages 635-648.
    10. Besley, Timothy & Coate, Stephen, 1998. "Sources of Inefficiency in a Representative Democracy: A Dynamic Analysis," American Economic Review, American Economic Association, vol. 88(1), pages 139-56, March.
    Full references (including those not matched with items on IDEAS)



    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


    Access and download statistics


    When requesting a correction, please mention this item's handle: RePEc:gua:wpaper:ec200504. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Luis Sanchez Mier).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.