Delegation in Veto Bargaining

Navin Kartik, Andreas Kleiner () and Richard Van Weelden

American Economic Review, 2021, vol. 111, issue 12, 4046-87

Abstract: A proposer requires a veto player's approval to change a status quo. Proposer is uncertain about Vetoer's preferences. We show that Vetoer is typically given a non-singleton menu, or delegation set, of options to pick from. The optimal set balances the extent of compromise with the risk of a veto. We identify conditions for certain delegation sets to emerge, including "full delegation": Vetoer can choose any action between the status quo and Proposer's ideal action. By contrast to expertise-based delegation, Proposer gives less discretion to Vetoer when their preferences are more (likely to be) aligned.

JEL-codes: D72 D82 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (7)

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DOI: 10.1257/aer.20201817

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