Legislative bargaining with heterogeneous disagreement values: Theory and experiments

Abstract

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

Recognition probability in legislative bargaining

“…Other experimental studies consider asymmetric disagreement value or voting weight. Diermeier and Gailmard (2006) and Kim and Kim (2022) show that a high disagreement value might induce unfavorable offers from other agents, which can result in lower expected payoffs (Miller et al 2018). Maaser et al (2019) find that inexperienced subjects' bargaining behavior is sensitive to the nominal differences in voting weights, when there is no difference in real bargaining power defined by pivotality.…”

“…Despite the large number of BF bargaining experiments, to the best of our knowledge, no existing study addresses the potentially negative value of recognition probability or provides a suitable setup to test that hypothesis. A majority of BF bargaining experiments focus on infinite-horizon cases (McKelvey, 1991;Fréchette et al, 2003Fréchette et al, , 2005aFréchette et al, , 2005bFréchette et al, , 2005c2009;Miller et al, 2018), which are irrelevant to the negative value prediction. Our baseline treatment considers the minimal number of periods within finite multi-period bargaining (i.e., two-period) to minimize dynamic inconsistency caused by a longer horizon (J. G. Johnson and Busemeyer, 2001).…”

Respecting entitlements in legislative bargaining: A matter of preference or necessity?

“…Overall, the two "others" are treated symmetrically by the dictator, which reflects their similar position from the dictator's point of view.12 When subjects do not earn entitlements but are assigned disagreement payoffs, the observed number of all-way splits is smaller(Merkel and Vanberg 2019a). In a similar setting,Miller et al (2018) find most subjects aim for minimum winning coalitions.…”

Communication in Multilateral Bargaining with Joint Production

“…The BF model of multilateral bargaining is one of the most widely-studied models in Economics and Political Science both theoretically and empirically. 5 Several experiments (Fréchette et al, 2005a,b;Diermeier and Morton, 2005;Miller et al, 2018) have documented that, when bargaining to divide an exogenous surplus, the proposer typically holds a payoff advantage and modal allocations are those in which only the minimum number of voters required for approval receive a positive share.…”