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Rhetoric in legislative bargaining with asymmetric information

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  • Chen, Ying
  • Eraslan, Hülya
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    Abstract

    We analyze a three-player legislative bargaining game over an ideological and a distributive decision. Legislators are privately informed about their ideological intensities, i.e., the weight placed on the ideological decision relative to the weight placed on the distributive decision. Communication takes place before a proposal is offered and majority rule voting determines the outcome. We show that it is not possible for all legislators to communicate informatively. In particular, the legislator who is ideologically more distant from the proposer cannot communicate informatively, but the closer legislator may communicate whether he would \compromise "or flight" on ideology. Surprisingly, the proposer may be worse off when bargaining with two legislators (under majority rule) than with one (who has veto power), because competition between the legislators may result in less information conveyed in equilibrium. Despite separable preferences, the proposer is always better off making proposals for the two dimensions together.

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    Bibliographic Info

    Paper provided by Economics Division, School of Social Sciences, University of Southampton in its series Discussion Paper Series In Economics And Econometrics with number 1309.

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    Date of creation: 01 Jan 2013
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    Handle: RePEc:stn:sotoec:1309

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    1. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-51, November.
    2. 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.
    3. Mark Bagnoli & Ted Bergstrom, 2005. "Log-concave probability and its applications," Economic Theory, Springer, vol. 26(2), pages 445-469, 08.
    4. Farrell, Joseph & Gibbons, Robert, 1988. "Cheap Talk Can Matter in Bargaining," Department of Economics, Working Paper Series qt3qz786xq, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    5. Marco Battaglini, 1999. "Multiple Referrals and Multidimensional Cheap Talk," Discussion Papers 1295, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    6. 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.
    7. Juan Vidal-Puga, 2003. "Bargaining with commitments," Game Theory and Information 0306002, EconWPA.
    8. Daniel Diermeier & Antonio Merlo, 1998. "Government Turnover in Parliamentary Democracies," Discussion Papers 1232, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    9. Ambrus, Attila & Takahashi, Satoru, 2008. "Multi-sender cheap talk with restricted state spaces," Theoretical Economics, Econometric Society, vol. 3(1), March.
    10. 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.
    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. 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.
    13. Maria Montero & Juan Vidal-Puga, 2005. "Demand commitment in legislative bargaining," Game Theory and Information 0511005, EconWPA.
    14. 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.
    15. Jackson, Matthew O. & Moselle, Boaz, 1998. "Coalition and Party Formation in a Legislative Voting Game," Working Papers 1036, California Institute of Technology, Division of the Humanities and Social Sciences.
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