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Cooperation and Retaliation in Legislative Bargaining

Author

Listed:
  • Agustín Casas

    (CUNEF)

  • Martín Gonzalez-Eiras

    (University of Copenhagen)

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.

Suggested Citation

  • Agustín Casas & Martín Gonzalez-Eiras, 2021. "Cooperation and Retaliation in Legislative Bargaining," Working Papers 95, Red Nacional de Investigadores en Economía (RedNIE).
    • Handle: RePEc:aoz:wpaper:95
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    File URL: https://rednie.eco.unc.edu.ar/files/DT/95.pdf
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    References listed on IDEAS

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    Cited by:

    1. Evdokimov, Kirill S., 2023. "Equality in legislative bargaining," Journal of Economic Theory, Elsevier, vol. 212(C).

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    More about this item

    Keywords

    Legislative bargaining; non-minimum winning coalitions; spillovers; allocative efficiency.;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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