Players' Patience and Equilibrium Payoffs in the Baron-Ferejohn Model

This paper investigates a generalized Baron-Ferejohn model with different discount factors, different recognition probabilities and q-majority rule. In the paper, it is shown that if players are sufficiently patient, recognition probabilities are similar and the voting rule is not unanimous, each player's equilibrium payoff is inversely proportional to the ratio of the player''s discount factor to the harmonic mean of all players'' discount factors. This result implies the followings: (i) A less patient player obtains a greater payoff (ii) As a player slightly becomes more patient, her payoff becomes smaller (iii) The equilibrium payoffs do not depend on recognition probabilities and (iv) They do not also depend on q.Baron-Ferejohn model (Legislative bargaining)

Uniqueness of Stationary Equilibrium Payoffs in Coalitional Bargaining

We study a model of sequential bargaining in which, in each period before an agreement is reached, the proposer’s identity (and whether there is a proposer) are randomly determined; the proposer suggests a division of a pie of size one; each other agent either approves or rejects the proposal; and the proposal is implemented if the set of approving agents is a winning coalition for the proposer. The theory of the fixed point index is used to show that stationary equilibrium expected payoffs of this coalitional bargaining game are unique. This generalizes Eraslan (2002) insofar as: (a) there are no restrictions on the structure of sets of winning coalitions; (b) different proposers may have different sets of winning coalitions; (c) there may be a positive probability that no proposer is selected.

Existence and Computation of Pure-strategy Equilibria in Models of Legislative Bargaining with Reconsideration

Diermeier and Fong (2008a) recently proposed a legislative bargaining model with reconsideration in the context of a distributive policy environment. In this paper we prove general existence and necessary conditions for pure-strategy stationary equilibria for any finite policy space and preference profile. We also provide an algorithm to compute these equilibria. In any such equilibrium proposal power is endogenously limited compared to the case of no reconsideration. The general model is then applied to various policy environments, including a model with spatial preferences. In the context of a public goods environment we can show that lack of commitment increases policy efficiency.Legislative bargaining, reconsideration, evolving default, proposal power, lack of commitment, distributive politics, public goods, spatial model.

Voting Power in the EU Council of Ministers and Fair Decision Making in Distributive Politics

We analyze and evaluate the different decision rules describing the Council of Ministers of the EU starting from 1958 up to date. All the existing studies use the Banzhaf index (for binary voting) or the Shapley-Shubik index (for distributive politics). We argue that the nucleolus can be considered an appropriate power measure in distributive situations and an alternative to the Shapley-Shubik index. We then calculate the nucleolus and compare the results of our calculations with the conventional measures. In the second part, we analyze the power of the European citizens as measured by the nucleolus under the egalitarian criterion proposed by Felsenthal and Machover (1998), and characterize the first best situation. Based on these results we propose a methodology for the design of the optimal (fair) decision rules. We perform the optimization exercise for the earlier stages of the EU within a restricted domain of voting rules, and conclude that Germany should receive more than the other three large countries under the optimal voting rule.

A model of protocoalition bargaining with breakdown probability

This paper analyses a model of legislative bargaining in which parties form tentative coalitions (protocoalitions) before deciding on the allocation of a resource. Protocoalitions may fail to reach an agreement, in which case they may be dissolved (breakdown) and a new protocoalition may form. We show that agreement is immediate in equilibrium, and the proposer advantage disappears as the breakdown probability goes to zero. We then turn to the special case of apex games and explore the consequences of varying the probabilities that govern the selection of formateurs and proposers. Letting the breakdown probability go to zero, most of the probabilities considered lead to the same ex post pay-off division. Ex ante expected pay-offs may follow a counterintuitive pattern: as the bargaining power of weak players within a protocoalition increases, the weak players may expect a lower pay-off ex ante

Laboratory Experiments in Political Economy

Most of the laboratory research in political science follows the style that was pioneered in experimental economics a half-century ago by Vernon Smith. The connection between this style of political science experimentation and economics experimentation parallels the connection between economic theory and formal political theory.

Dynamic Legislative Policy Making

We prove existence of stationary Markov perfect equilibria in an infinite-horizon model of legislative policy making in which the policy outcome in one period determines the status quo in the next. We allow for a multidimensional policy space and arbitrary smooth stage utilities. We prove that all such equilibria are essentially in pure strategies and that proposal strategies are differentiable almost everywhere. We establish upper hemicontinuity of the equilibrium correspondence, and we derive conditions under which each equilibrium of our model determines a unique invariant distribution characterizing long run policy outcomes. We illustrate the equilibria of the model in a numerical example of policy making in a single dimension, and we discuss extensions of our approach to accommodate much of the institutional structure observed in real-world politics.

Bargaining one-dimensional policies and the efficiency of super majority rules

We consider negotiations selecting one-dimensional policies. Individuals have single-peaked preferences, and they are impatient. Decisions arise from a bargaining game with random proposers and (super) majority approval, ranging from the simple majority up to unanimity. The existence and uniqueness of stationary subgame perfect equilibrium is established, and its explicit characterization provided. We supply an explicit formula to determine the unique alternative that prevails, as impatience vanishes, for each majority. As an application, we examine the efficiency of majority rules. For symmetric distributions of peaks unanimity is the unanimously preferred majority rule. For asymmetric populations rules maximizing social surplus are characterized