# Bargaining in legislatures over private and public goods with endogenous recognition

- 34 Downloads

## Abstract

This paper studies a sequential model of multilateral bargaining under majority rule in which legislators make decisions in both private and public good dimensions via an endogenous recognition process. Legislators can expend resources to become the proposer and to make proposals about the allocation of private and public goods. We show that legislators exert unproductive effort to be the proposer and make proposals in both dimensions depending on legislative preferences. Effort choices in equilibrium depend mainly on preferences in both distributional and ideological dimensions as well as the patience level of legislators and the legislature’s size. We also show that in a diverse legislature it may be possible to observe distributive policies when the majority of legislators have collective-leaning preferences, or vice versa.

## Keywords

Legislatures and legislative processes Majority rule Public goods## JEL Classification

C71 C78 D72## Notes

### Acknowledgements

We thank the editors and reviewers for extensive comments that substantially improved the paper. All remaining errors are ours.

## References

- Austen-Smith, D., & Banks, J. (1988). Elections, coalitions, and legislative outcomes.
*American Political Science Review*,*82*(2), 409–422.CrossRefGoogle Scholar - Banks, J., & Duggan, J. (2000). A bargaining model of collective choice.
*American Political Science Review*,*94*(1), 73–88.CrossRefGoogle Scholar - Baron, D. (2019). Simple dynamics of legislative bargaining: Coalitions and proposal power.
*Economic Theory*,*67*, 319–344.CrossRefGoogle Scholar - Baron, D., & Ferejohn, J. (1989). Bargaining in legislatures.
*American Political Science Review*,*83*, 1181–1206.CrossRefGoogle Scholar - Battaglini, M., & Coate, S. (2008). A dynamic theory of public spending, taxation, and debt.
*American Economic Review*,*98*(1), 201–236.CrossRefGoogle Scholar - Binmore, K., & Eguia, J. X. (2017). Bargaining with outside options. In G. Caballero & N. Schofield (Eds.),
*State, institutions and democracy: Contributions of political economy*(pp. 3–16). Berlin: Springer.CrossRefGoogle Scholar - Bowen, R., Chen, Y., & Eraslan, H. (2014). Mandatory versus discretionary spending: The status quo effect.
*American Economic Review*,*104*(10), 2941–2974.CrossRefGoogle Scholar - Bradfield, A. J., & Kagel, J. H. (2015). Legislative bargaining with teams.
*Games and Economic Behavior*,*93*, 117–127.CrossRefGoogle Scholar - Cho, S.-J. (2014). Three-party competition in parliamentary democracy with proportional representation.
*Public Choice*,*161*, 407–426.CrossRefGoogle Scholar - Debreu, G. (1952). A social equilibrium existence theorem.
*Proceedings of the National Academy of Sciences*,*38*, 886–893.CrossRefGoogle Scholar - Eraslan, H. (2002). Uniqueness of stationary equilibrium payoffs in the Baron–Ferejohn model.
*Journal of Economic Theory*,*103*, 11–30.CrossRefGoogle Scholar - Fan, K. (1952). Fixed-point and minimax theorems in locally convex topological spaces.
*Proceedings of the National Academy of Sciences USA*,*38*, 121–126.CrossRefGoogle Scholar - Fudenberg, D., & Tirole, J. (1991).
*Game theory*. Cambridge: MIT Press.Google Scholar - Glicksberg, I. L. (1952). A further generalization of the Kakutani fixed point theorem, with applications to Nash equilibrium points.
*Proceedings of the American Mathematical Society*,*3*, 170–174.Google Scholar - Jackson, M., & Moselle, N. (2002). Coalition and party formation in a legislative voting game.
*Journal of Economic Theory*,*103*, 49–87.CrossRefGoogle Scholar - Kim, D. G., & Kim, S. H. (2019).
*Multilateral bargaining with proposer selection contest*. Working Paper, Department of Economics, University of Mannheim.Google Scholar - Mayhew, D. (1974).
*Congress: The electoral connection*. New Haven: Yale University Press.Google Scholar - McKelvey, R. D. (1991). An experimental test of a stochastic game model of committee bargaining. In T. R. Palfrey (Ed.),
*Contemporary laboratory research in political economy*. Ann Arbor: University of Michigan Press.Google Scholar - Merlo, A., & Wilson, C. (1995). A stochastic model of sequential bargaining with complete information.
*Econometrica*,*63*, 371–399.CrossRefGoogle Scholar - Miller, L., Montero, M., & Vanberg, C. (2018). Legislative bargaining with heterogeneous disagreement values: Theory and experiments.
*Games and Economic Behavior*,*107*, 60–92.CrossRefGoogle Scholar - Miller, L., & Vanberg, C. (2013). Decision costs in legislative bargaining: An experimental analysis.
*Public Choice*,*154*, 373–394.CrossRefGoogle Scholar - Rubinstein, A. (1982). Perfect equilibrium in a barganing model.
*Econometrica*,*50*, 97–109.CrossRefGoogle Scholar - Szidarovszky, F., & Okuguchi, K. (1997). On the existence and uniqueness of pure Nash equilibrium in rent-seeking games.
*Games and Economic Behavior*,*18*(1), 135–140.CrossRefGoogle Scholar - Tullock, G. (1980). Efficient rent seeking. In J. Buchanan, R. Tollision, & G. Tullock (Eds.),
*Toward a theory of rent seeking society*(pp. 3–16). College Station: Texas A&M University Press.Google Scholar - Volden, C., & Wiseman, A. (2007). Bargaining in legislatures over particularistic and collective goods.
*American Political Science Review*,*101*, 79–92.CrossRefGoogle Scholar - Yildirim, H. (2007). Proposal power and majority rule in multilateral bargaining with costly recognition.
*Journal of Economic Theory*,*136*, 167–196.CrossRefGoogle Scholar - Yildirim, H. (2010). Distribution of surplus in sequential bargaining with endogenous recognition.
*Public Choice*,*142*, 41–57.CrossRefGoogle Scholar