 Dynamic legislative bargaining with veto power: Theory and experimentsGames and Economic Behavior, 2021, vol. 126, issue C, 186-230 Abstract: In many domains, committees bargain over a sequence of policies and a policy remains in effect until a new agreement is reached. In this paper, I argue that, in order to assess the consequences of veto power, it is important to take into account this dynamic aspect. I analyze an infinitely repeated divide-the-dollar game with an endogenous status quo policy. I show that full appropriation by the veto player is the only stable policy when legislators are sufficiently impatient; and that, irrespective of legislators' patience and the initial division of resources, there is always an equilibrium where policy eventually gets arbitrarily close to full appropriation by the veto player. In this equilibrium, increasing legislators' patience or decreasing the veto player's proposal power makes convergence to this outcome slower and the veto player supports reforms that decrease his allocation. The main predictions of the theory find support in controlled laboratory experiments. Keywords: Dynamic legislative bargaining; Distributive politics; Standing committees; Endogenous status quo; Veto power; Markov perfect equilibrium; Laboratory experiments (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:126:y:2021:i:c:p:186-230 DOI: 10.1016/j.geb.2020.11.006 Access Statistics for this article Games and Economic Behavior is currently edited by E. Kalai More articles in Games and Economic Behavior from Elsevier |
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