Rhetoric in Legislative Bargaining with Asymmetric Information
AbstractIn this paper we analyze a legislative bargaining game in which parties privately informed about their preferences bargain over an ideological and a distributive decision. Communication takes place before a proposal is offered and majority rule voting determines the outcome. When the private information pertains to the ideological intensities but the ideological positions are publicly known, it may not be possible to have informative communication from the legislator who is ideologically distant from the proposer, but the more moderate legislator can communicate whether he would "compromise" or fight" on ideology. If instead the private information pertains to the ideological positions, then all parties may convey whether they will "cooperate," "compromise," or fight" on ideology. When the uncertainty is about ideological intensity, the proposer is always better on making proposals for the two dimensions together despite separable preferences, but when the uncertainty is about ideological positions, bundling can result in informational loss which hurts the proposer.
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Bibliographic InfoPaper provided by Koc University-TUSIAD Economic Research Forum in its series Koç University-TUSIAD Economic Research Forum Working Papers with number 1021.
Length: 33 pages
Date of creation: Jul 2010
Date of revision:
Other versions of this item:
- Ying Chen & Hülya Eraslan, 2010. "Rhetoric in Legislative Bargaining with Asymmetric Information," Economics Working Paper Archive 563, The Johns Hopkins University,Department of Economics.
- 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
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-07-24 (All new papers)
- NEP-CDM-2010-07-24 (Collective Decision-Making)
- NEP-CTA-2010-07-24 (Contract Theory & Applications)
- NEP-GTH-2010-07-24 (Game Theory)
- NEP-POL-2010-07-24 (Positive Political Economics)
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- Ying Chen & Hulya Eraslan, 2012.
"Informational Loss in Bundled Bargaining,"
KoÃ§ University-TUSIAD Economic Research Forum Working Papers
1234, Koc University-TUSIAD Economic Research Forum.
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