Fully absorbing dynamic compromise

Michael Richter

Journal of Economic Theory, 2014, vol. 152, issue C, 92-104

Abstract: I consider a repeated divide-the-dollar voting model with rejections leading to the implementation of the previous period's allocation (see Kalandrakis [14]). I show that if proposals can be non-exhaustive, then equal division can be achieved as an absorbing steady state from any initial allocation given a large enough discount factor as a part of a Markov Perfect equilibrium. This result is robust to changes in voting thresholds and persistence in proposal power outside of unanimity or total persistence.

Keywords: Dynamic legislative bargaining; Markov perfect equilibria (search for similar items in EconPapers)
JEL-codes: C73 D72 (search for similar items in EconPapers)
Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:152:y:2014:i:c:p:92-104

DOI: 10.1016/j.jet.2014.03.013

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