Rhetoric in Legislative Bargaining with Asymmetric Information

Theoretical Economics (Impact Factor: 0.87). 01/2010; DOI: 10.3982/TE821
Source: RePEc

ABSTRACT In this paper we analyze a legislative bargaining game in which parties privately informed about their preferences bargain over an ideological and a distributive decision. Communication takes place before a proposal is offered and majority rule voting determines the outcome. When the private information pertains to the ideological intensities but the ideological positions are publicly known, it may not be possible to have informative communication from the legislator who is ideologically distant from the proposer, but the more moderate legislator can communicate whether he would "compromise" or "fight" on ideology. If instead the private information pertains to the ideological positions, then all parties may convey whether they will "cooperate," "compromise," or "fight" on ideology. When the uncertainty is about ideological intensity, the proposer is always better off making proposals for the two dimensions together despite separable preferences, but when the uncertainty is about ideological positions, bundling can result in informational loss which hurts the proposer.

  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: In this paper we consider a dynamic model of government formation in parliamentary democracies that accounts for the following phenomena: (1) minority and surplus governments; (2) cabinet reshuffles; (3) cabinet terminations due to replacement or early elections; (4) the relative instability of minority governments. Journal of Economic Literature Classification Numbers: D72, H19, C73.
    Journal of Economic Theory 09/2000; · 1.24 Impact Factor
  • Source
    [Show abstract] [Hide abstract]
    ABSTRACT: For two districts or countries that try to internalize externalities, I analyze a bargaining game under private information. I derive conditions for when it is efficient with uniform policies across regions—with and without side payments— and when it is efficient to prohibit side payments in the negotiations. While policy differentiation and side payments allow the policy to better reflect local conditions, they create conflicts between the regions and, thus, delay. The results also describe when political centralization outperforms decentralized cooperation, and they provide a theoretical foundation for the controversial "uniformity assumption" traditionally used by the fiscal federalism literature. (JEL C78, D72, D82, H77)
    American Economic Review 06/2007; 97(3):871-889. · 2.69 Impact Factor
  • Source
    Econometrica 02/1982; 50(6):1431-51. · 3.50 Impact Factor


Available from