When do conflicting parties share political power? An experimental study

We conduct a laboratory experiment to study the incentives of a privileged group to share political power with another group when the two have conflicting interests. There are two groups of participants, the "yellows" and the "blues". The yellows collectively choose the voting rule for a general election: a simple-majority rule that favors them, or a proportional rule. In two control treatments the blues can use a costly punishment option: they can punish the yellows after the outcome of the election, or after the choice of the electoral rule, but before the election. We find that the yellow group shares power voluntarily only to a small extent, but is more inclined to do so under the threat of punishment, despite the fact that punishment is not optimal in the continuation game. The blue group conditions punishment both on the voting rule and the electoral outcome: They are more inclined to punish an unfavorable outcome under the proportional rule. The evidence suggests that power sharing arises from the (suboptimal) willingness of the minority to punish selfish behavior.