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Rhetoric in legislative bargaining with asymmetric information

Author

Listed:
  • Chen, Ying

    () (Department of Economics, Arizona State University)

  • Eraslan, Hulya

    () (Department of Economics, Johns Hopkins University)

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 ``fight" 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.

Suggested Citation

  • Chen, Ying & Eraslan, Hulya, 2014. "Rhetoric in legislative bargaining with asymmetric information," Theoretical Economics, Econometric Society, vol. 9(2), May.
  • Handle: RePEc:the:publsh:821
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    References listed on IDEAS

    as
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    Cited by:

    1. Baron, David P. & Bowen, T. Renee & Nunnari, Salvatore, 2017. "Durable coalitions and communication: Public versus private negotiations," Journal of Public Economics, Elsevier, vol. 156(C), pages 1-13.
    2. Ying Chen & Hülya Eraslan, 2017. "Dynamic Agenda Setting," American Economic Journal: Microeconomics, American Economic Association, vol. 9(2), pages 1-32, May.
    3. Vincent Anesi, 2018. "Dynamic Legislative Policy Making under Adverse Selection," Discussion Papers 2018-08, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
    4. Ying Chen & Hülya Eraslan, 2013. "Informational loss in bundled bargaining," Journal of Theoretical Politics, , vol. 25(3), pages 338-362, July.
    5. Agranov, Marina & Tergiman, Chloe, 2014. "Communication in multilateral bargaining," Journal of Public Economics, Elsevier, vol. 118(C), pages 75-85.
    6. repec:kap:pubcho:v:173:y:2017:i:1:d:10.1007_s11127-017-0470-8 is not listed on IDEAS

    More about this item

    Keywords

    Legislative bargaining; rhetoric; cheap talk; private information; bundling;

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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