Endogenous Limits on Proposal Power

Pohan Fong and Daniel Diermeier
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Pohan Fong: Northwestern University
Daniel Diermeier: Northwestern University

No 521, 2008 Meeting Papers from Society for Economic Dynamics

Abstract: We present a dynamic model of legislative bargaining in which policy making proceeds until the proposer has no more incentive to make a new proposal to replace the previously approved policy. We characterize stationary Markov perfect equilibria for the game and show that in all pure-strategy equilibria, a majority of voters without proposal power have an incentive to protect each others' benefits to secure their own long-term bargaining positions in the legislature. As a consequence, the value of proposal power is constrained.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed008:521

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