Formal versus informal legislative bargaining

Adrian de Groot Ruiz, Roald Ramer and Arthur Schram

Games and Economic Behavior, 2016, vol. 96, issue C, 1-17

Abstract: We study how the formality of a bargaining procedure affects its outcome. We compare a formal Baron–Ferejohn bargaining procedure to an informal procedure where players make and accept proposals in continuous time. Both constitute non-cooperative games corresponding to the same bargaining problem: a three-player median voter setting with an external disagreement point. This allows us to study formality in the presence and absence of a core and provides a natural explanation for the effects of preference polarization. Our results show that polarization hurts the median player and that formality matters. The median player is significantly better off under informal bargaining.

Keywords: Legislative bargaining; Formal bargaining; Informal bargaining; Polarization; Median voter; Core; Uncovered set; Experiment (search for similar items in EconPapers)
JEL-codes: C71 C72 C91 D71 D72 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:96:y:2016:i:c:p:1-17

DOI: 10.1016/j.geb.2016.01.004

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