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Bargaining and vetoing

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  • Hankyoung Sung

Abstract

This paper studies the bargaining game between the president and the congress when these two players have conflicting claims to a fixed amount of resources. I distinguish between situations of "pure divided government", that is when the congress is united "against" the president, and the situations of "impure divided government", that is when the congress itself is divided (equal power of the two parties). The pure divided government case can be represented as a bilateral bargaining game, whereas the impure case needs to be represented as a three-player game. In both situations we assume the president is a veto player, who can exercise veto power only a finite number of times, consistent with the real US constitutional constraints. I will show the consequences of these modelling choices for the equilibrium payoffs of the various players, and I will suggest interesting consequences for the optimal timing choice by the congress, i.e. for the optimal time to make an offer that needs the approval of the president. In addition, I will estimate my conjectures using the States data as emprical applications

Suggested Citation

  • Hankyoung Sung, 2004. "Bargaining and vetoing," Econometric Society 2004 Far Eastern Meetings 688, Econometric Society.
    • Handle: RePEc:ecm:feam04:688
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    References listed on IDEAS

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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. Baron, David P. & Ferejohn, John A., 1989. "Bargaining in Legislatures," American Political Science Review, Cambridge University Press, vol. 83(4), pages 1181-1206, December.
    3. Winter, Eyal, 1996. "Voting and Vetoing," American Political Science Review, Cambridge University Press, vol. 90(4), pages 813-823, December.
    4. Thomas Romer & Howard Rosenthal, 1978. "Political resource allocation, controlled agendas, and the status quo," Public Choice, Springer, vol. 33(4), pages 27-43, December.
    5. 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.
    6. David M. Primo, 2002. "Rethinking Political Bargaining: Policymaking with a Single Proposer," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 18(2), pages 411-427, October.
    7. Shaked, Avner & Sutton, John, 1984. "Involuntary Unemployment as a Perfect Equilibrium in a Bargaining Model," Econometrica, Econometric Society, vol. 52(6), pages 1351-1364, November.
    8. Morelli, Massimo, 1999. "Demand Competition and Policy Compromise in Legislative Bargaining," American Political Science Review, Cambridge University Press, vol. 93(4), pages 809-820, December.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    veto player; restriction of the veto right;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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