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Group size and decision rules in legislative bargaining

  • Vanberg, Christoph
  • Miller Moya, Luis Miguel

We conduct experiments to investigate the effects of different majority requirements on bargaining outcomes in small and large groups. In particular, we use a Baron-Ferejohn protocol and investigate the effects of decision rules on delay (number of bargaining rounds needed to reach agreement) and measures of "fairness" (inclusiveness of coalitions, equality of the distribution within a coalition). We find that larger groups and unanimity rule are associated with significantly larger decision making costs in the sense that first round proposals more often fail, leading to more costly delay. The higher rate of failure under unanimity rule and in large groups is a combination of three facts: (1) in these conditions, a larger number of individuals must agree, (2) an important fraction of individuals reject offers below the equal share, and (3) proposers demand more (relative to the equal share) in large groups.

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File URL: http://hdl.handle.net/10810/11746
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Paper provided by University of the Basque Country - Department of Foundations of Economic Analysis II in its series DFAEII Working Papers with number 11746.

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Date of creation: 17 Mar 2014
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Handle: RePEc:ehu:dfaeii:11746
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Order Information: Postal: Dpto. de Fundamentos del Análisis Económico II, = Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
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  1. Maria Montero & Martin Sefton & Ping Zhang, 2005. "Enlargement and the Balance of Power: an Experimental Study," Discussion Papers 2005-08, The Centre for Decision Research and Experimental Economics, School of Economics, University of Nottingham.
  2. 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.
  3. Michalis Drouvelis & Maria Montero & Martin Sefton, . "Gaining Power through Enlargement: Strategic Foundations and Experimental Evidence," Discussion Papers 09/30, Department of Economics, University of York.
  4. 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.
  5. Luis Miller & Christoph Vanberg, 2011. "Decision costs in legislative bargaining: An experimental analysis," Discussion Papers 2011002, University of Oxford, Nuffield College.
  6. Norman, Peter, 2002. "Legislative Bargaining and Coalition Formation," Journal of Economic Theory, Elsevier, vol. 102(2), pages 322-353, February.
  7. Agranov, Marina & Tergiman, Chloe, 2014. "Communication in multilateral bargaining," Journal of Public Economics, Elsevier, vol. 118(C), pages 75-85.
  8. Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
  9. Edward C. Norton & Hua Wang & Chunrong Ai, 2004. "Computing interaction effects and standard errors in logit and probit models," Stata Journal, StataCorp LP, vol. 4(2), pages 154-167, June.
  10. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
  11. John Kagel & Hankyoung Sung & Eyal Winter, 2010. "Veto power in committees: an experimental study," Experimental Economics, Springer, vol. 13(2), pages 167-188, June.
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