Communication in Collective Bargaining

We analyze how institutions shape communication incentives in a Romer–Rosenthal agenda-setting model with private information and private values. An agenda-setter faces multiple voters who are privately informed about their ideal points in a one-dimensional policy space. We consider two institutions. In one setting, cheap-talk communication precedes a take-it-or-leave-it agenda-setting game. The second involves sequential agenda setting where the setter can revise the proposal only when the first one fails to gain enough support. The latter institution requires the setter to commit to a policy as a screening technology. The commitment fosters information disclosure from strategic voters and thus results in efficiency gains over straw polls, where the setter is not constrained in how she reacts to revealed information. In addition, we also find voters’ sabotage incentive that may discount the informativeness of political communication. Specifically, when a voter preferring the status quo cannot directly block less preferred policies, he could have an incentive to induce an extreme reform proposal and expect it to fail. With numerical examples, we identify the sabotage phenomenon in nonmonotonic equilibrium, where the types of voters that sufficiently prefer and dislike the status quo send one signal, and the intermediate types send another one.