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The Art of Compromise



Policy is modeled as the outcome of negotiations between two three-party parliamentary states. An election in jurisdiction A determines the composition of the legislature that selects a representative to negotiate an intergovernmental policy agreement with the representative from the legislature of jurisdiction B. Negotiations are modeled using Nash’s (1950) bargaining framework, modified to account for a simultaneous legislative ratification vote. Though agreements favor the legislative representative least willing to compromise, agreements between the bargainers may not follow the ordering of the parties’ ideal policies. An electoral outcome where support for the center party comes from extreme voters may emerge.

Suggested Citation

  • Maria Gallego, David Scoones, 2005. "The Art of Compromise," Working Papers eg0042, Wilfrid Laurier University, Department of Economics, revised 2005.
  • Handle: RePEc:wlu:wpaper:eg0042

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    References listed on IDEAS

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    Cited by:

    1. Cressman, Ross & Gallego, Maria, 2009. "On the ranking of bilateral bargaining opponents," Mathematical Social Sciences, Elsevier, vol. 58(1), pages 64-83, July.

    More about this item


    Vote balancing; intergovernmental bargaining; legislative ratification; willingness to compromise;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism


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