Legislative Bargaining and Coalition Formation

Norman, Peter

doi:10.1006/jeth.2001.2846

Cited by 48 publications

(24 citation statements)

References 10 publications

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“…24,25 Proposition 3. Given an SSPE with immediate agreement, the partition of the player set into the sets L, M and H uniquely determines the equilibrium values of y, z and µ.…”

Section: A3 Equilibria With Immediate Agreementmentioning

confidence: 99%

“…In a no-delay equilibrium, the proposer offers z i to q − 1 other players (the ones with the q − 1 lowest values of z i ) and 0 to the remaining players. 26 24 We are not (yet) claiming that the no-delay equilibrium is unique, just that other no-delay equilibria would lead to different values of L, M and H. 25 It is a known feature of legislative bargaining models that a given vector of equilibrium expected payoffs may be supported by several strategy combinations (see e.g. Eraslan and McLennan, 2013).…”

Section: A3 Equilibria With Immediate Agreementmentioning

confidence: 99%

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Legislative Bargaining with Heterogeneous Disagreement Values: Theory and Experiments

2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We study a legislative bargaining game in which failure to agree in a given round may result in a breakdown of negotiations. In that case, each player receives an exogenous 'disagreement value'. We characterize the set of stationary subgame perfect equilibria under all q-majority rules. Under unanimity rule, equilibrium payoffs are strictly increasing in disagreement values. Under all less-thanunanimity rules, expected payoffs are either decreasing or first increasing and then decreasing in disagreement values. We conduct experiments involving three players using majority and unanimity rule, finding support for these predictions. Terms of use: Documents in

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“…24,25 Proposition 3. Given an SSPE with immediate agreement, the partition of the player set into the sets L, M and H uniquely determines the equilibrium values of y, z and µ.…”

Section: A3 Equilibria With Immediate Agreementmentioning

confidence: 99%

Section: A3 Equilibria With Immediate Agreementmentioning

confidence: 99%

Legislative Bargaining with Heterogeneous Disagreement Values: Theory and Experiments

2015

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“…Norman (2002) first pointed out that the way in which ties are broken could exert a significant effect on the equilibrium outcomes. Indeed, in the finite-session version of the BF model he proved a folk-style theorem: a continuum of divisions of the dollar is supportable as subgame perfect equilibria as long as there are three or more sessions.…”

Section: The Modelmentioning

confidence: 99%

“…This is because strong players in the next session are more expensive to buy, so they have higher probabilities of being excluded from the coalition formation in the current session, which makes them weak. Second, Norman (2002) found that this logic implies that proposals typically do not converge in a perturbed version of the BF model with complete information. We also obtain equilibria that are non-stationary for similar reasons.…”

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confidence: 99%

On Majoritarian Bargaining with Incomplete Information

Tsai

Yang

2008

SSRN Journal

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[Abstract] This paper studies a finite horizon version of Baron and Ferejohn's (1989) majoritarian bargaining with incomplete information. Our devised model essentially blends Spence's signaling and the coalition formation of majoritarian bargaining.The main findings include: (i) oversized coalitions may arise in equilibrium and allowing for delay can be optimal for a proposer; (ii) whether being regarded as a high type makes a player better or worse off is not predetermined a priori but depends on two conflicting concerns: the "offer" concern à la Spence's signaling (the higher the type, the higher the offer) and the "coalition" concern in majoritarian bargaining (the higher the type, the lower the probability of being a member of the majoritarian coalition); (iii) players take action to distinguish themselves via delay; however, separating equilibria often fail to exist due to the incapability or unprofitability of exercising separation; (iv) separating equilibria, if they exist, can have a "no-envy" property, and pooling equilibria may coexist with the "least-cost" separating equilibrium even after refining the equilibrium set by the intuitive criterion; and (v) equilibria may be non-stationary and exhibit the novel feature that pooling proposals arise if a game lasts an even number of sessions, but not if there is an odd number of sessions.JEL classification: C78, D72, D82.

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“…Note that the BF model violates strict superadditivity when viewed as a transferable utility game. Norman (2002) studies a finite horizon version of the BF model and shows for the case with at least five players that any interior division of the surplus can be supported as a subgame perfect equilibrium outcome if players are sufficiently patient and there are sufficiently many rounds of bargaining. He also shows indeterminacy of the equilibrium outcome whenever there are at least three players and at least three bargaining rounds.…”

Section: Introductionmentioning

confidence: 99%

Subgame perfect equilibria in majoritarian bargaining

Herings¹,

Meshalkin

Predtetchinski³

2018

Journal of Mathematical Economics

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We study the division of a surplus under majoritarian bargaining in the threeperson case. In a stationary equilibrium as derived by Baron and Ferejohn (1989), the proposer offers one third times the discount factor of the surplus to a second player and allocates no payoff to the third player, a proposal which is accepted without delay. Laboratory experiments show various deviations from this equilibrium, where different offers are typically made and delay may occur before acceptance. We address the issue to what extent these findings are compatible with subgame perfect equilibrium and characterize the set of subgame perfect equilibrium payoffs for any value of the discount factor. We show that for any proposal in the interior of the space of possible agreements there exists a discount factor such that the proposal is made and accepted. We characterize the values of the discount factor for which equilibria with one-period delay exist. We show that any amount of equilibrium delay is possible and we construct subgame perfect equilibria such that arbitrary long delay occurs with probability one.

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Legislative Bargaining and Coalition Formation

Cited by 48 publications

References 10 publications

Legislative Bargaining with Heterogeneous Disagreement Values: Theory and Experiments

Legislative Bargaining with Heterogeneous Disagreement Values: Theory and Experiments

On Majoritarian Bargaining with Incomplete Information

Subgame perfect equilibria in majoritarian bargaining

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