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Stable Coalition-Governments: The Case of Three Political Parties

  • M. Socorro Puy

    ()

    (Department of Economic Theory, Universidad de Málaga)

We explore to what extent we can propose fixed negotiation rules as well as simple mechanisms (or protocols) that guarantee that political parties can form stable coalition-governments. We analyze the case where three parties can hold office in the form of two-party coalitions. We define the family of Weighted Rules, that select political agreements as a function of the bliss-points of the parties, and electoral results (Camson's Law and equal-share among others are included). We show that every weighted rule yields a stable coalition. We make use of the theory of implementation to design a protocol (in the form of a mechanism) that guarantees that a stable coalition will govern. We find that no dominant-solvable mechanism can be used for this purpose, but there is a simultaneous-unanimity mechanism that implements it in Nash and strong Nash equilibrium.

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File URL: http://webdeptos.uma.es/THEconomica/malagawpseries/Papers/METCwp2009-3.pdf
File Function: First version, 2009
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Paper provided by Universidad de Málaga, Department of Economic Theory, Málaga Economic Theory Research Center in its series Working Papers with number 2009-3.

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Length: 24 pages
Date of creation: Jun 2009
Date of revision:
Handle: RePEc:mal:wpaper:2009-3
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Web page: http://webdeptos.uma.es/THEconomica/malagawpseries/METC.html
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  1. John C. Harsanyi & Reinhard Selten, 1972. "A Generalized Nash Solution for Two-Person Bargaining Games with Incomplete Information," Management Science, INFORMS, vol. 18(5-Part-2), pages 80-106, January.
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  3. Frechette, Guillaume R. & Kagel, John H. & Morelli, Massimo, 2005. "Gamson's Law versus non-cooperative bargaining theory," Games and Economic Behavior, Elsevier, vol. 51(2), pages 365-390, May.
  4. Montero, Maria & Vidal-Puga, Juan J., 2011. "Demand bargaining and proportional payoffs in majority games," Games and Economic Behavior, Elsevier, vol. 71(2), pages 395-408, March.
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  6. Suryapratim Banerjee & Hideo Konishi & Tayfun Sonmez, 1999. "Core in a Simple Coalition Formation Game," Boston College Working Papers in Economics 449, Boston College Department of Economics.
  7. Bogomolnaia, Anna & Jackson, Matthew O., 2002. "The Stability of Hedonic Coalition Structures," Games and Economic Behavior, Elsevier, vol. 38(2), pages 201-230, February.
  8. Donald G. Saari, 1997. "The generic existence of a core for q -rules (*)," Economic Theory, Springer, vol. 9(2), pages 219-260.
  9. Amoros, Pablo & Corchon, Luis C. & Moreno, Bernardo, 2002. "The Scholarship Assignment Problem," Games and Economic Behavior, Elsevier, vol. 38(1), pages 1-18, January.
  10. Matthew O. Jackson, 2001. "A crash course in implementation theory," Social Choice and Welfare, Springer, vol. 18(4), pages 655-708.
  11. Georg KIRCHSTEIGER & Clemens PUPPE, 1995. "On the Formation of Political Coalitions," Vienna Economics Papers vie9505, University of Vienna, Department of Economics.
  12. Serrano Roberto, 1995. "A Market to Implement the Core," Journal of Economic Theory, Elsevier, vol. 67(1), pages 285-294, October.
  13. Michel Breton & Ignacio Ortuño-Ortin & Shlomo Weber, 2008. "Gamson’s law and hedonic games," Social Choice and Welfare, Springer, vol. 30(1), pages 57-67, January.
  14. Jan-Willem Rijt, 2008. "An Alternative Model of the Formation of Political Coalitions," Theory and Decision, Springer, vol. 64(1), pages 81-101, February.
  15. Schofield, Norman, 1983. "Generic Instability of Majority Rule," Review of Economic Studies, Wiley Blackwell, vol. 50(4), pages 695-705, October.
  16. Sang-Chul Suh, 1997. "Double implementation in Nash and strong Nash equilibria," Social Choice and Welfare, Springer, vol. 14(3), pages 439-447.
  17. Banks, Jeffrey S. & Duggan, John, 2006. "A General Bargaining Model of Legislative Policy-making," Quarterly Journal of Political Science, now publishers, vol. 1(1), pages 49-85, January.
  18. Bloch, Francis, 1996. "Sequential Formation of Coalitions in Games with Externalities and Fixed Payoff Division," Games and Economic Behavior, Elsevier, vol. 14(1), pages 90-123, May.
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