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Political Competition in Government Formation: the Effect of Simultaneous Policy Bidding on the Political Outcome


  • Birol Baskan

    (Northwestern University)

  • Federico Boffa

    (Northwestern University)


We present an alternative model of government formation in which two parties simultaneously and inpendently announce their polices proposals through a take-it-or-leave-it offer, to a third party - the formateur -, which picks the one that maximizes its own utility. As a consequence, the chosen policy proposal is implemented by a government coalition composed of the formateur and the party associated with the selected policy proposal. The model purposedly captures the political competition arising among the parties other than the formateur for the partnership in the governing coalition. The political equilibria resulting from the model confirm that the intensification of political competition among the parties, implied by the present framework, is beneficial for the formateur.

Suggested Citation

  • Birol Baskan & Federico Boffa, 2004. "Political Competition in Government Formation: the Effect of Simultaneous Policy Bidding on the Political Outcome," Microeconomics 0402003, EconWPA.
  • Handle: RePEc:wpa:wuwpmi:0402003
    Note: Type of Document - pdf; prepared on winXP; pages: 15. Preliminary

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    References listed on IDEAS

    1. Productivity Commission, 2003. "Evaluation of the Pharmaceutical Industry Investment Program," Microeconomics 0305001, EconWPA.
    2. Brown, Drusilla K., 1987. "Tariffs, the terms of trade, and national product differentiation," Journal of Policy Modeling, Elsevier, vol. 9(3), pages 503-526.
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    Political competition goverment formation;

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior

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