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Bargaining Foundations of the Median Voter Theorem

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We provide game-theoretic foundations for the median voter theorem in a one-dimensional bargaining model based on Baron and Ferejohn’s (1989) model of distributive politics. We prove that, as the agents become arbitrarily patient, the set of proposals that can be passed in any subgame perfect equilibrium collapses to the median voter’s ideal point. While we leave the possibility of some delay, we prove that the agents’ equilibrium continuation payoffs converge to the utility from the median, so that delay, if it occurs, is inconsequential. We do not impose stationarity or any other refinements. Our result counters intuition based on the folk theorem for repeated games, and it contrasts with the known result for the distributive bargaining model that, as agents become patient, any division of the dollar can be supported as a subgame perfect equilibrium outcome.

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File URL: http://www.wallis.rochester.edu/WallisPapers/wallis_49.pdf
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Bibliographic Info

Paper provided by University of Rochester - Wallis Institute of Political Economy in its series Wallis Working Papers with number WP49.

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Length: 34 pages
Date of creation: Nov 2007
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Handle: RePEc:roc:wallis:wp49

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Postal: University of Rochester, Wallis Institute, Harkness 109B Rochester, New York 14627 U.S.A.

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  16. Ariel Rubinstein, 2010. "Perfect Equilibrium in a Bargaining Model," Levine's Working Paper Archive 252, David K. Levine.
  17. Fudenberg, Drew & Maskin, Eric, 1986. "The Folk Theorem in Repeated Games with Discounting or with Incomplete Information," Econometrica, Econometric Society, vol. 54(3), pages 533-54, May.
  18. Eraslan, Hulya & Merlo, Antonio, 2002. "Majority Rule in a Stochastic Model of Bargaining," Journal of Economic Theory, Elsevier, vol. 103(1), pages 31-48, March.
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Citations

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Cited by:
  1. Herings, P. Jean-Jacques & Predtetchinski, Arkadi, 2010. "One-dimensional bargaining with Markov recognition probabilities," Journal of Economic Theory, Elsevier, vol. 145(1), pages 189-215, January.
  2. Le Breton, Michel & Thomas, Alban & Zaporozhets, Vera, 2012. "Bargaining in River Basin Committees: Rules Versus Discretion," IDEI Working Papers 732, Institut d'Économie Industrielle (IDEI), Toulouse.
  3. Maaser, Nicola & Napel, Stefan, 2012. "A note on the direct democracy deficit in two-tier voting," Mathematical Social Sciences, Elsevier, vol. 63(2), pages 174-180.
  4. Christopher J. Tyson, 2004. "Iterative Dominance and Sequential Bargaining," Economics Papers 2004-W23, Economics Group, Nuffield College, University of Oxford.
  5. Daniel Cardona & Arnold Polanski, 2013. "Voting rules and efficiency in one-dimensional bargaining games with endogenous protocol," Social Choice and Welfare, Springer, vol. 41(2), pages 217-240, July.
  6. Duggan, John & Kalandrakis, Tasos, 2012. "Dynamic legislative policy making," Journal of Economic Theory, Elsevier, vol. 147(5), pages 1653-1688.
  7. Levy, Gilat & Razin, Ronny, 2013. "Dynamic legislative decision making when interest groups control the agenda," Journal of Economic Theory, Elsevier, vol. 148(5), pages 1862-1890.
  8. Christopher J. Tyson, 2009. "Dominance Solvability of Dynamic Bargaining Games," Working Papers 644, Queen Mary, University of London, School of Economics and Finance.
  9. Cardona, Daniel & Ponsati, Clara, 2011. "Uniqueness of stationary equilibria in bargaining one-dimensional policies under (super) majority rules," Games and Economic Behavior, Elsevier, vol. 73(1), pages 65-75, September.

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