Communication in legislative bargaining

Abstract

We investigate the Baron-Ferejohn (The American Political Science Review 83(4): 1989) model of legislative bargaining with cheap talk between the designated proposer and potential coalition partners. Communication results in substantially increased proposer power close to the stationary subgame perfect equilibrium prediction. This is achieved primarily through voters competing with each other to get the proposer to include them in the winning coalition, while arguing for a zero allocation for redundant voters. Voters typically follow through on their stated reservation shares, but proposers often fail to partner with voters making excessively low offers, as these are more likely to be reneged on.

Delegated bargaining in a competitive agent market: an experimental study

“…For example, requiring agents to send only binding commitments of what they intend to propose or to reveal prior proposals they have made could potentially affect principals' selection decisions and the resulting proposals and outcomes. This would contribute to other recent research investigating how the nature of communication interacts with features of a bargaining context to influence outcomes (Kriss et al 2013;Baranski and Kagel 2015).…”

Power illusion in coalitional bargaining: An experimental analysis

“…7 However, Agranov and Tergiman (2014) and Baranski and Kagel (2015) show that allowing subjects to engage in (cheap-talk) communication before a proposal is submitted brings experimental results much closer to the theoretical prediction. Kagel et al (2010) find that adding veto rights substantially augments proposer power.…”

Majoritarian Bargaining over Budgetary Divisions and Policy

“…Our experiment is also related to the experimental investigations of the Baron and Ferejohn (1989) model over the division of a …xed budget. For example, Diermeier and Morton (2005), Fréchette, Kagel and Morelli (2005), and Baranski and Kagel (2015) all report minimum winning coalitions (that is, coalitions formed with the exact number of votes required for passage) to be modal allocations. Laroze, Hugh-Jones and Leininger (2020) investigate behavior in a 3-player majoritarian variant of the game where subjects' self-reported ideological stances are publicly revealed (but there are no policy choices to be made, only a budgetary split).…”

“…Knez and Camerer (1995) extended the ultimatum game to two recipients who make independent acceptance choices and each of whom has di¤erent positive outside options. 2 Our design shares the latter feature in that subjects'outside options are determined by the status quo policy in case of rejection, with the caveat that outside options were negative for some subjects when the status quo did not match their preferred policy. Knez and Camerer (1995) elicited recipients' willingness to accept (WTA) prior to disclosing the proposers'o¤ers, a design feature that we adopted as well.…”