Cooperation and Retaliation in Legislative Bargaining

Agustin Casas () and Martin Gonzalez-Eiras

No 95, Working Papers from Red Nacional de Investigadores en Economía (RedNIE)

Abstract: We study a legislative-bargaining divide-the-pie game in which some legislators have the ability to a ect the amount of resources to be distributed (positively or negatively). If included in the winning coalition, these legislators cooperate and increase the size of the pie. If excluded, they retaliate and decrease it. Cooperation and retaliation produce significant changes in the equilibrium allocation relative to Baron and Ferejohn (1989): The bargaining position of cooperating and retaliating legislators improves, and thus they are more likely to be included in the winning coalition (which may be larger-than-minimum). Some of these legislators may be excluded from the winning coalition, creating inefficient output losses. Moreover, output losses increase with legislators' patience.

Keywords: Legislative bargaining; non-minimum winning coalitions; spillovers; allocative efficiency. (search for similar items in EconPapers)
JEL-codes: D61 D72 D74 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2021-11
New Economics Papers: this item is included in nep-cdm and nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:aoz:wpaper:95

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