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Characterization of the von Neumann–Morgenstern stable set in a non-cooperative model of dynamic policy-making with a persistent agenda setter

Author

Listed:
  • Diermeier, Daniel
  • Fong, Pohan

Abstract

We generalize the dynamic bargaining game of Diermeier and Fong (2011) to arbitrary quota rules to provide a non-cooperative characterization of the von Neumann–Morgenstern stable set. Assuming that players are sufficiently patient and have strict preferences, a pure-strategy stationary equilibrium exists and in any such equilibrium, a policy is a steady state if and only if it is in the stable set. The result provides a non-cooperative foundation of stable sets in settings with dynamic policy-making and a persistent agenda setter.

Suggested Citation

  • Diermeier, Daniel & Fong, Pohan, 2012. "Characterization of the von Neumann–Morgenstern stable set in a non-cooperative model of dynamic policy-making with a persistent agenda setter," Games and Economic Behavior, Elsevier, vol. 76(1), pages 349-353.
  • Handle: RePEc:eee:gamebe:v:76:y:2012:i:1:p:349-353
    DOI: 10.1016/j.geb.2012.04.002
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    References listed on IDEAS

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    1. Anesi, Vincent, 2010. "Noncooperative foundations of stable sets in voting games," Games and Economic Behavior, Elsevier, vol. 70(2), pages 488-493, November.
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    7. Roger B. Myerson & Daniel Diermeier, 1999. "Bicameralism and Its Consequences for the Internal Organization of Legislatures," American Economic Review, American Economic Association, vol. 89(5), pages 1182-1196, December.
    8. Duggan, John & Kalandrakis, Tasos, 2012. "Dynamic legislative policy making," Journal of Economic Theory, Elsevier, vol. 147(5), pages 1653-1688.
    9. Kalandrakis, Anastassios, 2004. "A three-player dynamic majoritarian bargaining game," Journal of Economic Theory, Elsevier, vol. 116(2), pages 294-322, June.
    10. Thomas Romer & Howard Rosenthal, 1978. "Political resource allocation, controlled agendas, and the status quo," Public Choice, Springer, vol. 33(4), pages 27-43, December.
    11. Daniel Diermeier & Pohan Fong, 2011. "Legislative Bargaining with Reconsideration," The Quarterly Journal of Economics, Oxford University Press, vol. 126(2), pages 947-985.
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    Cited by:

    1. repec:the:publsh:2215 is not listed on IDEAS
    2. Anesi, Vincent & Duggan, John, 0. "Existence and indeterminacy of markovian equilibria in dynamic bargaining games," Theoretical Economics, Econometric Society.
    3. Anesi, Vincent & Seidmann, Daniel J., 2014. "Bargaining over an endogenous agenda," Theoretical Economics, Econometric Society, vol. 9(2), May.
    4. Hannu Vartiainen, 2015. "Dynamic stable set as a tournament solution," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(2), pages 309-327, September.
    5. Tasos Kalandrakis, 2016. "Pareto efficiency in the dynamic one-dimensional bargaining model," Journal of Theoretical Politics, , vol. 28(4), pages 525-536, October.
    6. Daniel Diermeier & Georgy Egorov & Konstantin Sonin, 2017. "Political Economy of Redistribution," Econometrica, Econometric Society, vol. 85, pages 851-870, May.
    7. Vincent Anesi & John Duggan, 2015. "Dynamic Bargaining and External Stability with Veto Players," Discussion Papers 2015-12, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    8. repec:eee:gamebe:v:103:y:2017:i:c:p:30-40 is not listed on IDEAS

    More about this item

    Keywords

    von Neumann–Morgenstern stable set; Legislative bargaining; Status quo; Markov perfect equilibrium;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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