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Bargaining over an Endogenous Agenda

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  • Vincent Anesi

    ()
    (School of Economics, University of Nottingham)

  • Daniel J Seidmann

    ()
    (School of Economics, University of Nottingham)

Abstract

We present a model of bargaining in which a committee searches over the policy space, successively amending the default by voting over proposals. Bargaining ends when proposers are unable or unwilling to amend the existing default, which is then implemented. We characterize the policies which can be implemented from any initial default in a pure strategy stationary Markov perfect equilibrium for an interesting class of environments including multi-dimensional and infinite policy spaces. Minimumwinning coalitions may not form, and a player who does not propose may nevertheless earn all of the surplus from agreement. The set of immovable policies (which are implemented, once reached as default) forms a weakly stable set; and conversely, any weakly stable set is supported by some equilibrium. If the policy space is well ordered then the committee implements the ideal policy of the last proposer in a subset of a weakly stable set. However, this result does not generalize to other cases, allowing us to explore the effects of protocol manipulation. Variations in the quota and in the set of proposers may have surprising effects on the set of immovable policies. We also show that equilibria of our model are contemporaneous perfect e-equilibria of a related model of repeated implementation with an evolving default; and that immovable policies in semi-Markovian equilibria form the largest consistent set.

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Bibliographic Info

Paper provided by The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham in its series Discussion Papers with number 2012-03.

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Date of creation: Mar 2012
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Handle: RePEc:not:notcdx:2012-03

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Web page: http://www.nottingham.ac.uk/economics/cedex/
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Keywords: bargaining; committee voting; evolving default; stable set;

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References

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  1. Rubinstein, Ariel, 1982. "Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 50(1), pages 97-109, January.
  2. Daniel Diermeier & Pohan Fong, 2011. "Legislative Bargaining with Reconsideration," The Quarterly Journal of Economics, Oxford University Press, vol. 126(2), pages 947-985.
  3. Kalandrakis, Anastassios, 2004. "A three-player dynamic majoritarian bargaining game," Journal of Economic Theory, Elsevier, vol. 116(2), pages 294-322, June.
  4. Kevin Roberts, 2005. "Condorcet Cycles? A Model of Intertemporal Voting," Economics Papers 2005-W15, Economics Group, Nuffield College, University of Oxford.
  5. Daron Acemoglu & Georgy Egorov & Konstantin Sonin, 2012. "Dynamics and Stability of Constitutions, Coalitions, and Clubs," American Economic Review, American Economic Association, vol. 102(4), pages 1446-76, June.
  6. John Duggan & Tasos Kalandrakis, 2009. "A Newton Collocation Method for Solving Dynamic Bargaining Games," Wallis Working Papers WP60, University of Rochester - Wallis Institute of Political Economy.
  7. Wioletta Dziuda & Antoine Loeper, 2010. "Dynamic Collective Choice with Endogenous Status Quo," Discussion Papers 1514, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  8. Vincent Anesi & Daniel J. Seidmann, 2011. "Bargaining over an Endogenous Agenda," Discussion Papers 2011-10, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  9. Larcker, David F. & Ormazabal, Gaizka & Taylor, Daniel J., 2011. "The market reaction to corporate governance regulation," Journal of Financial Economics, Elsevier, vol. 101(2), pages 431-448, August.
  10. Vincent Anesi, 2010. "A New Old Solution for Weak Tournaments," Discussion Papers 2010-04, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  11. Vincent Anesi, 2007. "Noncooperative Foundations of Stable Sets in Voting Games," Discussion Papers 2007-09, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  12. Duggan, John & Kalandrakis, Tasos, 2012. "Dynamic legislative policy making," Journal of Economic Theory, Elsevier, vol. 147(5), pages 1653-1688.
  13. Hortala-Vallve, Rafael, 2011. "Generous Legislators? A Description of Vote Trading Agreements," International Quarterly Journal of Political Science, now publishers, vol. 6(2), pages 179-196, September.
  14. Wilson, Robert, 1971. "Stable coalition proposals in majority-rule voting," Journal of Economic Theory, Elsevier, vol. 3(3), pages 254-271, September.
  15. Olivier Compte & Philippe Jehiel, 2010. "Bargaining and Majority Rules: A Collective Search Perspective," Journal of Political Economy, University of Chicago Press, vol. 118(2), pages 189-221, 04.
  16. Konishi, Hideo & Ray, Debraj, 2003. "Coalition formation as a dynamic process," Journal of Economic Theory, Elsevier, vol. 110(1), pages 1-41, May.
  17. Tasos Kalandrakis, 2010. "Minimum winning coalitions and endogenous status quo," International Journal of Game Theory, Springer, vol. 39(4), pages 617-643, October.
  18. Vartiainen, Hannu, 2011. "Dynamic coalitional equilibrium," Journal of Economic Theory, Elsevier, vol. 146(2), pages 672-698, March.
  19. Vincent Anesi & Daniel J Seidmann, 2012. "Bargaining in Standing Committees," Discussion Papers 2012-09, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  20. Vincent Anesi, 2006. "Committees with Farsighted Voters: A New Interpretation of Stable Sets," Social Choice and Welfare, Springer, vol. 27(3), pages 595-610, December.
  21. Lucas, William F., 1992. "Von Neumann-Morgenstern stable sets," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 17, pages 543-590 Elsevier.
  22. Battaglini, Marco & Nunnari, Salvatore & Palfrey, Thomas, 2011. "Legislative bargaining and the dynamics of public investment," Discussion Papers, Research Unit: Market Behavior SP II 2011-205, Social Science Research Center Berlin (WZB).
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Cited by:
  1. Vincent Anesi & Daniel J Seidmann, 2012. "Bargaining over an Endogenous Agenda," Discussion Papers 2012-03, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  2. Vincent Anesi & Daniel J Seidmann, 2012. "Bargaining in Standing Committees," Discussion Papers 2012-09, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  3. Dahm, Matthias & Glazer, Amihai,, 2013. "A Carrot and Stick Approach to Agenda-Setting," Working Papers 2072/222199, Universitat Rovira i Virgili, Department of Economics.

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