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Dynamic Legislative Bargaining with Veto Power: Theory and Experiments

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  • Salvatore Nunnari

Abstract

In many domains, committees bargain over a sequence of policies and a policy remains ine?ectuntilanewagreementisreached. Inthispaper,Iarguethat,inordertoassess the consequences of veto power, it is important to take into account this dynamic aspect. I analyze an in?nitely repeated divide-the-dollar game with an endogenous status quo policy. I show that, irrespective of legislators patience and the initial division of resources, policy eventually gets arbitrarily close to full appropriation by the veto player; that increasing legislators patience or decreasing the veto players ability to set the agenda makes convergence to this outcome slower; and that the veto player supports reforms that decrease his allocation. These results stand in sharp contrast to the properties of models where committees bargain over a single policy. The main predictions of the theory ?nd support in controlled laboratory experiments. JEL Classi?cations: C72, C73, C78, C92, D71, D72, D78 Keywords: DynamicLegislativeBargaining; DistributivePolitics; StandingCommittees; Endogenous Status Quo; Veto Power; Markov Perfect Equilibrium; Laboratory Experiments

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  • Salvatore Nunnari, 2019. "Dynamic Legislative Bargaining with Veto Power: Theory and Experiments," Working Papers 649, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  • Handle: RePEc:igi:igierp:649
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    1. Agranov, Marina & Cotton, Christopher & Tergiman, Chloe, 2020. "Persistence of power: Repeated multilateral bargaining with endogenous agenda setting authority," Journal of Public Economics, Elsevier, vol. 184(C).

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    More about this item

    Keywords

    dynamiclegislativebargaining; distributivepolitics; standingcommittees; endogenous status quo; veto power; markov perfect equilibrium; laboratory experiments;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • 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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