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Stable Coalition-Governments: The Case of Three Political Parties

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  • M. Socorro Puy

    ()
    (Department of Economic Theory, Universidad de Málaga)

Abstract

We explore to what extent we can propose fixed negotiation rules as well as simple mechanisms (or protocols) that guarantee that political parties can form stable coalition-governments. We analyze the case where three parties can hold office in the form of two-party coalitions. We define the family of Weighted Rules, that select political agreements as a function of the bliss-points of the parties, and electoral results (Camson's Law and equal-share among others are included). We show that every weighted rule yields a stable coalition. We make use of the theory of implementation to design a protocol (in the form of a mechanism) that guarantees that a stable coalition will govern. We find that no dominant-solvable mechanism can be used for this purpose, but there is a simultaneous-unanimity mechanism that implements it in Nash and strong Nash equilibrium.

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File URL: http://webdeptos.uma.es/THEconomica/malagawpseries/Papers/METCwp2009-3.pdf
File Function: First version, 2009
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Bibliographic Info

Paper provided by Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center in its series Working Papers with number 2009-3.

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Length: 24 pages
Date of creation: Jun 2009
Date of revision:
Handle: RePEc:mal:wpaper:2009-3

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Keywords: Coalition-government; Stability; Nash-implementation;

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  1. Amoros, Pablo & Corchon, Luis C. & Moreno, Bernardo, 2002. "The Scholarship Assignment Problem," Games and Economic Behavior, Elsevier, vol. 38(1), pages 1-18, January.
  2. Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
  3. Daniel Diermeier & Hulya Eraslan & Antonio Merlo, 2003. "A Structural Model of Government Formation," Econometrica, Econometric Society, vol. 71(1), pages 27-70, January.
  4. Georg Kirchsteiger & Clemens Puppe, 1997. "On the formation of political coalitions," ULB Institutional Repository 2013/5915, ULB -- Universite Libre de Bruxelles.
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  13. Gene Grossman & Elhanan Helpman, 1994. "Electoral Competition and Special Interest Politics," NBER Working Papers 4877, National Bureau of Economic Research, Inc.
  14. Jan-Willem Rijt, 2008. "An Alternative Model of the Formation of Political Coalitions," Theory and Decision, Springer, vol. 64(1), pages 81-101, February.
  15. Sang-Chul Suh, 1997. "Double implementation in Nash and strong Nash equilibria," Social Choice and Welfare, Springer, vol. 14(3), pages 439-447.
  16. Michel Breton & Ignacio Ortuño-Ortin & Shlomo Weber, 2008. "Gamson’s law and hedonic games," Social Choice and Welfare, Springer, vol. 30(1), pages 57-67, January.
  17. Serrano Roberto, 1995. "A Market to Implement the Core," Journal of Economic Theory, Elsevier, vol. 67(1), pages 285-294, October.
  18. Matthew O. Jackson, 2001. "A crash course in implementation theory," Social Choice and Welfare, Springer, vol. 18(4), pages 655-708.
  19. Schofield, Norman, 1983. "Generic Instability of Majority Rule," Review of Economic Studies, Wiley Blackwell, vol. 50(4), pages 695-705, October.
  20. Montero, Maria & Vidal-Puga, Juan J., 2011. "Demand bargaining and proportional payoffs in majority games," Games and Economic Behavior, Elsevier, vol. 71(2), pages 395-408, March.
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