Majority Rule Dynamics with Endogenous Status Quo

Tasos Kalandrakis

No WP46, Wallis Working Papers from University of Rochester - Wallis Institute of Political Economy

Abstract: We analyze a stochastic bargaining game in which a new dollar is divided among committee members in each of an infinity of periods. In each period, a committee member is recognized and offers a proposal for the division of the dollar. The proposal is implemented if it is approved by a majority. If the proposal is rejected, then last period’s allocation is implemented. We show existence of equilibrium in Markovian strategies. It is such that irrespective of the initial status quo, the discount factor, or the probabilities of recognition, the proposer extracts the entire dollar in all periods but the initial two. We also derive a fully strategic version of McKelvey’s (1976), (1979) dictatorial agenda setting, so that a player with exclusive access to the formulation of proposals can extract the entire dollar in all periods except the first. The equilibrium collapses when within period payoffs are sufficiently concave. Winning coalitions may comprise players with high instead of low recognition probabilities, ceteris paribus.

JEL-codes: C73 C78 D72 (search for similar items in EconPapers)
Pages: 39 pages
Date: 2007-05
New Economics Papers: this item is included in nep-cdm, nep-gth, nep-mic and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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