The emergence and persistence of oligarchy: A dynamic model of endogenous political power

Jee Seon Jeon and Ilwoo Hwang

Journal of Economic Theory, 2022, vol. 201, issue C

Abstract: We study an infinite-horizon multilateral bargaining game in which the status quo policy, players' recognition probabilities, and their voting weights are endogenously determined by the previous bargaining outcome. With players not discounting future payoffs, we show that the long-run equilibrium outcome features the concentration of power by one or two players, depending on the initial bargaining state. If the players' initial shares are relatively equal, they successfully prevent tyranny, but a two-player oligarchy nevertheless emerges and persists. The same results are obtained with payoff discounting, provided that the players' shares are not too small. Our results highlight the importance of the initial power distribution and discounting of future payoffs in the long-run development of power configuration.

Keywords: Dynamic bargaining; Endogenous political power; Endogenous institution; Markov perfect equilibrium; Oligarchy (search for similar items in EconPapers)
JEL-codes: C73 C78 D71 D72 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022053122000278
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:201:y:2022:i:c:s0022053122000278

DOI: 10.1016/j.jet.2022.105437

Access Statistics for this article

Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell

More articles in Journal of Economic Theory from Elsevier
Bibliographic data for series maintained by Catherine Liu ().