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Endogenous Limits on Proposal Power

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  • Daniel Diermeier
  • Pohan Fong

Abstract

We present a dynamic model of legislative bargaining in which policy making proceeds until the proposer has no more incentive to make a new proposal to replace the previously approved policy. We characterize stationary Markov perfect equilibria for the game and show that in all pure-strategy equilibria, a majority of voters without proposal power have an incentive to protect each others' benefits to secure their own long-term bargaining positions in the legislature. As a consequence, the value of proposal power is constrained.

Suggested Citation

  • Daniel Diermeier & Pohan Fong, 2009. "Endogenous Limits on Proposal Power," Discussion Papers 1464, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    • Handle: RePEc:nwu:cmsems:1464
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    References listed on IDEAS

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    Cited by:

    1. John Duggan & Tasos Kalandrakis, 2011. "A Newton collocation method for solving dynamic bargaining games," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 36(3), pages 611-650, April.
    2. Anesi, Vincent, 2010. "Noncooperative foundations of stable sets in voting games," Games and Economic Behavior, Elsevier, vol. 70(2), pages 488-493, November.
    3. Paulo Reis Mourao, 2019. "The effectiveness of Green voices in parliaments: Do Green Parties matter in the control of pollution?," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 21(2), pages 985-1011, April.
    4. 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.
    5. Daniel Diermeier & Pohan Fong, 2011. "Legislative Bargaining with Reconsideration," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(2), pages 947-985.

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    More about this item

    Keywords

    Parliamentary democracy; proportional representation; government formation; policy dynamics; lack of commitment; inefficiency.;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • H1 - Public Economics - - Structure and Scope of Government

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