Asymmetric Legislative Bargaining
Jernej Copic*
Last modified: 2017-04-18
Abstract
We characterize the equilibrium payoffs in general legislative bargaining environments, where agents differ in discounting and in power to make proposals (recogni- tion probabilities). Our key observation is that under minor restrictions each member of the approving majority must obtain the same share. An approver’s share depends on the average interest rate but not on recognition probabilities or approval quota. In contrast with bargaining in markets, an agent’s expected rent decreases with patience and is independent of recognition probabilities. Our insight provides a simple closed form, a method for the unrestricted case, and extends to risk aversion and more general settings.