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The Paradox of New Members: Strategic Foundations and Experimental Evidence

  • Michalis Drouvelis

    (School of Economics, University of Nottingham)

  • Maria Montero

    ()

    (School of Economics, University of Nottingham)

  • Martin Sefton

    (School of Economics, University of Nottingham)

Power indices suggest that adding new members to a voting body may affect the balance of power between the original members even if their number of votes and the decision rule remain constant. Some of the original members may actually gain, a phenomenon known as the paradox of new members. We show that the paradox can occur as an equilibrium of a noncooperative bargaining game based on the Baron-Ferejohn (1989) model of legislative bargaining. We implement this game in the laboratory and find empirical support for the paradox.

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Paper provided by The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham in its series Discussion Papers with number 2007-06.

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Date of creation: Sep 2007
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Handle: RePEc:cdx:dpaper:2007-06
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  1. Norman, Peter, 2002. "Legislative Bargaining and Coalition Formation," Journal of Economic Theory, Elsevier, vol. 102(2), pages 322-353, February.
  2. Maria Montero & Martin Sefton & Ping Zhang, 2005. "Enlargement and the Balance of Power: An Experimental Study," Experimental 0507001, EconWPA.
  3. Maria Montero, 2007. "The Paradox of New Members in the Council of Ministers: A Noncooperative Approach," Discussion Papers 2007-12, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  4. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
  5. Vidal-Puga, Juan J., 2008. "Forming coalitions and the Shapley NTU value," European Journal of Operational Research, Elsevier, vol. 190(3), pages 659-671, November.
  6. G Frechette & J Kagel & M Morelli, 2004. "Behavioral Identification in Coalition Bargaining: An Experimental Analysis of Demand Bargaining and Alternating Offers," Levine's Bibliography 122247000000000006, UCLA Department of Economics.
  7. Tasos Kalandrakis, 2004. "Proposal Rights and Political Power," Wallis Working Papers WP38, University of Rochester - Wallis Institute of Political Economy.
  8. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer, vol. 10(2), pages 171-178, June.
  9. Okada, Akira & Riedl, Arno, 2005. "Inefficiency and social exclusion in a coalition formation game: experimental evidence," Games and Economic Behavior, Elsevier, vol. 50(2), pages 278-311, February.
  10. Daniel Diermeier & Hulya Eraslan & Antonio Merlo, 2003. "A Structural Model of Government Formation," Econometrica, Econometric Society, vol. 71(1), pages 27-70, January.
  11. 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.
  12. David Pérez-Castrillo & David Wettstein, . "Bidding For The Surplus: A Non-Cooperative Approach To The Shapley Value," UFAE and IAE Working Papers 461.00, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
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