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Rhetoric in Legislative Bargaining with Asymmetric Information

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  • Ying Chen

    ()
    (Arizona State University)

  • Hülya Eraslan

    ()
    (John Hopkins University)

Abstract

In 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 Info

Paper provided by Koc University-TUSIAD Economic Research Forum in its series Koç University-TUSIAD Economic Research Forum Working Papers with number 1021.

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Length: 33 pages
Date of creation: Jul 2010
Date of revision:
Handle: RePEc:koc:wpaper:1021

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  1. Marco Battaglini, 2000. "Multiple Referrals and Multidimensional Cheap Talk," Econometric Society World Congress 2000 Contributed Papers 1557, Econometric Society.
  2. Takahashi, Satoru & Ambrus, Attila, 2008. "Multi-Sender Cheap Talk with Restricted State Spaces," Scholarly Articles 3200263, Harvard University Department of Economics.
  3. Jackson, Matthew O. & Moselle, Boaz, 2002. "Coalition and Party Formation in a Legislative Voting Game," Journal of Economic Theory, Elsevier, vol. 103(1), pages 49-87, March.
  4. Tsung-Sheng Tsai & C. Yang, 2010. "Minimum winning versus oversized coalitions in public finance: the role of uncertainty," Social Choice and Welfare, Springer, vol. 34(2), pages 345-361, February.
  5. Robert Gibbons & Joseph Farrell, 1988. "Cheap Talk Can Matter in Bargaining," Working papers 482, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Daniel Diermeier & Antonio Merlo, 1998. "Government Turnover in Parliamentary Democracies," Discussion Papers 1232, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  7. Steven A. Matthews & Andrew Postlewaite, 1987. "Pre-Play Communication in Two-Person Sealed-Bid Double Auctions," Discussion Papers 744R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  8. Austen-Smith David, 1993. "Interested Experts and Policy Advice: Multiple Referrals under Open Rule," Games and Economic Behavior, Elsevier, vol. 5(1), pages 3-43, January.
  9. Tsung‐Sheng Tsai & C. C. Yang, 2010. "On Majoritarian Bargaining With Incomplete Information," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 51(4), pages 959-979, November.
  10. Matthews, Steven A, 1989. "Veto Threats: Rhetoric in a Bargaining Game," The Quarterly Journal of Economics, MIT Press, vol. 104(2), pages 347-69, May.
  11. Yves Breitmoser, 2009. "Demand commitments in majority bargaining or how formateurs get their way," International Journal of Game Theory, Springer, vol. 38(2), pages 183-191, June.
  12. Juan J. Vidal-Puga, 2004. "Bargaining with commitments," International Journal of Game Theory, Springer, vol. 33(1), pages 129-144, January.
  13. Tsai, Tsung-Sheng, 2009. "The evaluation of majority rules in a legislative bargaining model," Journal of Comparative Economics, Elsevier, vol. 37(4), pages 674-684, December.
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Cited by:
  1. Ying Chen & Hulya Eraslan, 2012. "Informational Loss in Bundled Bargaining," Koç University-TUSIAD Economic Research Forum Working Papers 1234, Koc University-TUSIAD Economic Research Forum.

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