IDEAS home Printed from https://ideas.repec.org/p/ecl/riceco/14-001.html
   My bibliography  Save this paper

Some Unpleasant Bargaining Arithmetic?

Author

Listed:
  • Eraslan, Hulya

    (Rice University)

  • Merlo, Antonio

    (Rice University)

Abstract

It is commonly believed that, since unanimity rule safeguards the rights of each individual, it protects minorities from the possibility of expropriation, thus yielding more equitable outcomes than majority rule. We show that this is not necessarily the case in bargaining environments. We study a multilateral bargaining model a la Baron and Ferejohn (1989), where players are heterogeneous with respect to the potential surplus they bring to the bargaining table. We show that unanimity rule may generate equilibrium outcomes that are more unequal (or less equitable) than under majority rule. In fact, as players become perfectly patient, we show that the more inclusive the voting rule, the less equitable the equilibrium allocations.

Suggested Citation

  • Eraslan, Hulya & Merlo, Antonio, 2014. "Some Unpleasant Bargaining Arithmetic?," Working Papers 14-001, Rice University, Department of Economics.
  • Handle: RePEc:ecl:riceco:14-001
    as

    Download full text from publisher

    File URL: http://economics.rice.edu/rise/working-papers/some-unpleasant-bargaining-arithmetic
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Baron, David P. & Ferejohn, John A., 1989. "Bargaining in Legislatures," American Political Science Review, Cambridge University Press, vol. 83(4), pages 1181-1206, December.
    2. Merlo, Antonio & Wilson, Charles A, 1995. "A Stochastic Model of Sequential Bargaining with Complete Information," Econometrica, Econometric Society, vol. 63(2), pages 371-399, March.
    3. Tasos Kalandrakis, 2006. "Proposal Rights and Political Power," American Journal of Political Science, John Wiley & Sons, vol. 50(2), pages 441-448, April.
    4. Yildirim, Huseyin, 2007. "Proposal power and majority rule in multilateral bargaining with costly recognition," Journal of Economic Theory, Elsevier, vol. 136(1), pages 167-196, September.
    5. Huseyin Yildirim, 2010. "Distribution of Surplus in Sequential Bargaining with Endogenous Recognition," Working Papers 10-17, Duke University, Department of Economics.
    6. Eraslan, Hülya & McLennan, Andrew, 2013. "Uniqueness of stationary equilibrium payoffs in coalitional bargaining," Journal of Economic Theory, Elsevier, vol. 148(6), pages 2195-2222.
    7. Winter, Eyal, 1996. "Voting and Vetoing," American Political Science Review, Cambridge University Press, vol. 90(4), pages 813-823, December.
    8. Baron David & Kalai Ehud, 1993. "The Simplest Equilibrium of a Majority-Rule Division Game," Journal of Economic Theory, Elsevier, vol. 61(2), pages 290-301, December.
    9. Tasos Kalandrakis, 2010. "Minimum winning coalitions and endogenous status quo," International Journal of Game Theory, Springer;Game Theory Society, vol. 39(4), pages 617-643, October.
    10. Olivier Compte & Philippe Jehiel, 2010. "Bargaining and Majority Rules: A Collective Search Perspective," Journal of Political Economy, University of Chicago Press, vol. 118(2), pages 189-221, April.
    11. Mariagiovanna Baccara & Ronny Razin, 2007. "Bargaining Over New Ideas: The Distribution of Rents and the Stability of Innovative Firms," Journal of the European Economic Association, MIT Press, vol. 5(6), pages 1095-1129, December.
    12. S Nageeb Ali & B Douglas Bernheim & Xiaochen Fan, 2019. "Predictability and Power in Legislative Bargaining," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 86(2), pages 500-525.
    13. Huseyin Yildirim, 2010. "Distribution of surplus in sequential bargaining with endogenous recognition," Public Choice, Springer, vol. 142(1), pages 41-57, January.
    14. Kalandrakis, Anastassios, 2004. "A three-player dynamic majoritarian bargaining game," Journal of Economic Theory, Elsevier, vol. 116(2), pages 294-322, June.
    15. Avinash Dixit & Gene M. Grossman & Faruk Gul, 2000. "The Dynamics of Political Compromise," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 531-568, June.
    16. Eraslan, Hulya & Merlo, Antonio, 2002. "Majority Rule in a Stochastic Model of Bargaining," Journal of Economic Theory, Elsevier, vol. 103(1), pages 31-48, March.
    17. John Sutton, 1986. "Non-Cooperative Bargaining Theory: An Introduction," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(5), pages 709-724.
    18. Banks, Jeffrey s. & Duggan, John, 2000. "A Bargaining Model of Collective Choice," American Political Science Review, Cambridge University Press, vol. 94(1), pages 73-88, March.
    19. Harrington, Joseph E, Jr, 1990. "The Role of Risk Preferences in Bargaining When Acceptance of a Proposal Requires Less than Unanimous Approval," Journal of Risk and Uncertainty, Springer, vol. 3(2), pages 135-154, June.
    20. Eraslan, Hulya, 2002. "Uniqueness of Stationary Equilibrium Payoffs in the Baron-Ferejohn Model," Journal of Economic Theory, Elsevier, vol. 103(1), pages 11-30, March.
    21. B. Douglas Bernheim & Antonio Rangel & Luis Rayo, 2006. "The Power of the Last Word in Legislative Policy Making," Econometrica, Econometric Society, vol. 74(5), pages 1161-1190, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Evdokimov, Kirill S., 2023. "Equality in legislative bargaining," Journal of Economic Theory, Elsevier, vol. 212(C).
    2. Miettinen, Topi & Vanberg, Christoph, 2020. "Commitment and Conflict in Multilateral Bargaining," Working Papers 0679, University of Heidelberg, Department of Economics.
    3. Kawamori, Tomohiko, 2022. "Coalition-then-allocation legislative bargaining," Journal of Mathematical Economics, Elsevier, vol. 99(C).
    4. Agustín Casas & Martín Gonzalez-Eiras, 2021. "Cooperation and Retaliation in Legislative Bargaining," Working Papers 95, Red Nacional de Investigadores en Economía (RedNIE).
    5. Li, Shuwen & Houser, Daniel, 2022. "Stochastic bargaining in the lab," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 687-715.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zapal, Jan, 2020. "Simple Markovian equilibria in dynamic spatial legislative bargaining," European Journal of Political Economy, Elsevier, vol. 63(C).
    2. Cho, Seok-ju & Duggan, John, 2009. "Bargaining foundations of the median voter theorem," Journal of Economic Theory, Elsevier, vol. 144(2), pages 851-868, March.
    3. Andrzej Baranski & Ernesto Reuben, 2023. "Competing for Proposal Rights: Theory and Experimental Evidence," Working Papers 20220085, New York University Abu Dhabi, Department of Social Science, revised Mar 2023.
    4. Tasos Kalandrakis, 2007. "Majority Rule Dynamics with Endogenous Status Quo," Wallis Working Papers WP46, University of Rochester - Wallis Institute of Political Economy.
    5. Duggan, John & Kalandrakis, Tasos, 2012. "Dynamic legislative policy making," Journal of Economic Theory, Elsevier, vol. 147(5), pages 1653-1688.
    6. Imai, Haruo, 2024. "Bargaining and rent seeking: Asymmetric equilibria with two investment levels," Economics Letters, Elsevier, vol. 240(C).
    7. Kim, Duk Gyoo, 2019. "Recognition without replacement in legislative bargaining," Games and Economic Behavior, Elsevier, vol. 118(C), pages 161-175.
    8. Agranov, Marina & Cotton, Christopher & Tergiman, Chloe, 2020. "Persistence of power: Repeated multilateral bargaining with endogenous agenda setting authority," Journal of Public Economics, Elsevier, vol. 184(C).
    9. Kalandrakis, Tasos, 2015. "Computation of equilibrium values in the Baron and Ferejohn bargaining model," Games and Economic Behavior, Elsevier, vol. 94(C), pages 29-38.
    10. Hakan Genc & Serkan Kucuksenel, 2019. "Bargaining in legislatures over private and public goods with endogenous recognition," Public Choice, Springer, vol. 181(3), pages 351-373, December.
    11. James M. Snyder Jr. & Michael M. Ting & Stephen Ansolabehere, 2005. "Legislative Bargaining under Weighted Voting," American Economic Review, American Economic Association, vol. 95(4), pages 981-1004, September.
    12. Eraslan, Hülya & McLennan, Andrew, 2013. "Uniqueness of stationary equilibrium payoffs in coalitional bargaining," Journal of Economic Theory, Elsevier, vol. 148(6), pages 2195-2222.
    13. Yves Breitmoser, 2011. "Parliamentary bargaining with priority recognition for committee members," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 37(1), pages 149-169, June.
    14. Tasos Kalandrakis, 2006. "Regularity of pure strategy equilibrium points in a class of bargaining games," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 28(2), pages 309-329, June.
    15. Ali, S. Nageeb, 2015. "Recognition for sale," Journal of Economic Theory, Elsevier, vol. 155(C), pages 16-29.
    16. Yildirim, Mustafa, 2018. "Legislative bargaining with a stochastic surplus and costly recognition," Economics Letters, Elsevier, vol. 163(C), pages 102-105.
    17. P. Jean-Jacques Herings & Harold Houba, 2022. "Costless delay in negotiations," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 74(1), pages 69-93, July.
    18. Montero, Maria, 2017. "Proportional Payoffs in Legislative Bargaining with Weighted Voting: A Characterization," Quarterly Journal of Political Science, now publishers, vol. 12(3), pages 325-346, October.
    19. Herings, P. Jean-Jacques & Predtetchinski, Arkadi, 2010. "One-dimensional bargaining with Markov recognition probabilities," Journal of Economic Theory, Elsevier, vol. 145(1), pages 189-215, January.
    20. Ma, Zizhen, 2023. "Efficiency and surplus distribution in majoritarian reputational bargaining," Journal of Economic Theory, Elsevier, vol. 210(C).

    More about this item

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecl:riceco:14-001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/dericus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.