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Decision costs in legislative bargaining: an experimental analysis

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  • Luis Miller
  • Christoph Vanberg

Abstract

We conduct an experiment to assess the effects of different decision rules on the costs of decision making in a multilateral bargaining situation. Specifically, we compare the amount of costly delay observed in an experimental bargaining game under majority and unanimity rule. Our main finding is that individual subjects are more likely to reject offers under unanimity rule. This higher rejection rate, as well as the requirement that all subjects agree, leads to more costly delay. This result provides empirical support for a classic argument in favor of less-than-unanimity decision rules put forth by Buchanan and Tullock (The calculus of consent: logical foundations of constitutional democracy, University of Michigan Press, Ann Arbor, 1962 ). Copyright Springer Science+Business Media, LLC 2013

Suggested Citation

  • Luis Miller & Christoph Vanberg, 2013. "Decision costs in legislative bargaining: an experimental analysis," Public Choice, Springer, vol. 155(3), pages 373-394, June.
  • Handle: RePEc:kap:pubcho:v:155:y:2013:i:3:p:373-394
    DOI: 10.1007/s11127-011-9866-z
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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. John Kagel & Hankyoung Sung & Eyal Winter, 2010. "Veto power in committees: an experimental study," Experimental Economics, Springer;Economic Science Association, vol. 13(2), pages 167-188, June.
    3. Baron, David P. & Ferejohn, John A., 1989. "Bargaining in Legislatures," American Political Science Review, Cambridge University Press, vol. 83(4), pages 1181-1206, December.
    4. Guillaume Fréchette & John H. Kagel & Massimo Morelli, 2005. "Behavioral Identification in Coalitional Bargaining: An Experimental Analysis of Demand Bargaining and Alternating Offers," Econometrica, Econometric Society, vol. 73(6), pages 1893-1937, November.
    5. Diermeier, Daniel & Gailmard, Sean, 2006. "Self-Interest, Inequality, and Entitlement in Majoritarian Decision-Making," Quarterly Journal of Political Science, now publishers, vol. 1(4), pages 327-350, October.
    6. Frã‰Chette, Guillaume R. & Kagel, John H. & Lehrer, Steven F., 2003. "Bargaining in Legislatures: An Experimental Investigation of Open versus Closed Amendment Rules," American Political Science Review, Cambridge University Press, vol. 97(2), pages 221-232, May.
    7. Frechette, Guillaume & Kagel, John H. & Morelli, Massimo, 2005. "Nominal bargaining power, selection protocol, and discounting in legislative bargaining," Journal of Public Economics, Elsevier, vol. 89(8), pages 1497-1517, August.
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    Cited by:

    1. Miller, Luis & Montero, Maria & Vanberg, Christoph, 2018. "Legislative bargaining with heterogeneous disagreement values: Theory and experiments," Games and Economic Behavior, Elsevier, vol. 107(C), pages 60-92.
    2. Daniela Glätzle-Rützler & Philipp Lergetporer & Matthias Sutter, 2019. "Collective intertemporal decisions and heterogeneity in groups," Working Papers 2019-10, Faculty of Economics and Statistics, University of Innsbruck.
    3. Nunnari, Salvatore, 2021. "Dynamic legislative bargaining with veto power: Theory and experiments," Games and Economic Behavior, Elsevier, vol. 126(C), pages 186-230.
    4. Tremewan, James & Vanberg, Christoph, 2018. "Voting rules in multilateral bargaining: using an experiment to relax procedural assumptions," Working Papers 0651, University of Heidelberg, Department of Economics.
    5. Herings, P. Jean-Jacques & Meshalkin, Andrey & Predtetchinski, Arkadi, 2018. "Subgame perfect equilibria in majoritarian bargaining," Journal of Mathematical Economics, Elsevier, vol. 76(C), pages 101-112.
    6. Dongwon Lee, 2016. "Supermajority rule and bicameral bargaining," Public Choice, Springer, vol. 169(1), pages 53-75, October.
    7. Nunnari, Salvatore & Zapal, Jan, 2016. "Gambler's fallacy and imperfect best response in legislative bargaining," Games and Economic Behavior, Elsevier, vol. 99(C), pages 275-294.
    8. Miller, Luis & Vanberg, Christoph, 2015. "Group size and decision rules in legislative bargaining," European Journal of Political Economy, Elsevier, vol. 37(C), pages 288-302.
    9. Andrzej Baranski & Rebecca Morton, 2020. "The Determinants of Multilateral Bargaining: A Comprehensive Analysis of Baron and Ferejohn Majoritarian Bargaining Experiments," Working Papers 20200037, New York University Abu Dhabi, Department of Social Science, revised Sep 2020.
    10. Hakan Genc & Serkan Kucuksenel, 2019. "Bargaining in legislatures over private and public goods with endogenous recognition," Public Choice, Springer, vol. 181(3), pages 351-373, December.
    11. Dougherty, Keith L. & Kisaalita, Alice & McKissick, Jordan & Katz, Evan, 2020. "Stopping rules for majority voting: A public choice experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 175(C), pages 353-364.
    12. Agranov, Marina & Tergiman, Chloe, 2014. "Communication in multilateral bargaining," Journal of Public Economics, Elsevier, vol. 118(C), pages 75-85.
    13. Guillaume R. Fréchette & Emanuel Vespa, 2017. "The determinants of voting in multilateral bargaining games," Journal of the Economic Science Association, Springer;Economic Science Association, vol. 3(1), pages 26-43, July.
    14. Marina Agranov & Chloe Tergiman, 2019. "Communication in bargaining games with unanimity," Experimental Economics, Springer;Economic Science Association, vol. 22(2), pages 350-368, June.
    15. Peter Kurrild-Klitgaard & Urs Steiner Brandt, 2021. "The calculus of democratic deliberation," Constitutional Political Economy, Springer, vol. 32(2), pages 165-186, June.
    16. Duk Gyoo Kim & Wooyoung Lim, 2019. "Multilateral Bargaining over the Division of Losses," CESifo Working Paper Series 8011, CESifo.
    17. Anita Gantner & Kristian Horn & Rudolf Kerschbamer, 2013. "Fair Division in Unanimity Bargaining with Subjective Claims," Working Papers 2013-31, Faculty of Economics and Statistics, University of Innsbruck.
    18. Regine Oexl & Anita Gantner, 2021. "Respecting Entitlements in Legislative Bargaining - A Matter of Preference or Necessity?," Working Papers 2021-25, Faculty of Economics and Statistics, University of Innsbruck.
    19. Jan Zápal, 2017. "Crafting consensus," Public Choice, Springer, vol. 173(1), pages 169-200, October.
    20. Maaser, Nicola & Traub, Stefan & Paetzel, Fabian, 2017. "Power illusion in coalitional bargaining: An experimental analysis," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168155, Verein für Socialpolitik / German Economic Association.
    21. Anna Merkel & Christoph Vanberg, 2020. "Legislative bargaining with costly communication," Public Choice, Springer, vol. 183(1), pages 3-27, April.
    22. Tremewan, James & Vanberg, Christoph, 2016. "The dynamics of coalition formation – A multilateral bargaining experiment with free timing of moves," Journal of Economic Behavior & Organization, Elsevier, vol. 130(C), pages 33-46.

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    More about this item

    Keywords

    Collective decision-making; Majority rule; Unanimity; Legislative bargaining; Experimental economics; C78; C92; D71; D72;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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