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Endogenous Limits on Proposal Power

  • Daniel Diermeier
  • Pohan Fong

We present a dynamic model of legislative bargaining in which policy making proceeds until the proposer has no more incentive to make a new proposal to replace the previously approved policy. We characterize stationary Markov perfect equilibria for the game and show that in all pure-strategy equilibria, a majority of voters without proposal power have an incentive to protect each others' benefits to secure their own long-term bargaining positions in the legislature. As a consequence, the value of proposal power is constrained.

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Paper provided by Northwestern University, Center for Mathematical Studies in Economics and Management Science in its series Discussion Papers with number 1464.

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Date of creation: 01 Jul 2009
Date of revision:
Handle: RePEc:nwu:cmsems:1464
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  1. Hassler, John & Mora, Jose & Storesletten, Kjetil & Zilibotti, Fabrizio, 2002. "The Survival of the Welfare State," Seminar Papers 704, Stockholm University, Institute for International Economic Studies.
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  11. Tasos Kalandrakis, 2007. "Majority Rule Dynamics with Endogenous Status Quo," Wallis Working Papers WP46, University of Rochester - Wallis Institute of Political Economy.
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  20. repec:oup:restud:v:75:y:2008:i:4:p:987-1009 is not listed on IDEAS
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