eprintid: 31117
rev_number: 19
eprint_status: archive
userid: 3114
dir: disk0/00/03/11/17
datestamp: 2022-01-13 12:49:26
lastmod: 2024-07-27 08:35:35
status_changed: 2022-01-13 12:49:26
type: workingPaper
metadata_visibility: no_search
creators_name: Piazolo, David
creators_name: Vanberg, Christoph
title: Legislative bargaining with private information: A comparison of majority and unanimity rule
subjects: ddc-330
divisions: i-181000
abstract: We present a three-person, two-period bargaining game with private information. A single proposer is seeking to secure agreement to a proposal under either majority or unanimity rule. Two responders have privately known "breakdown values" which determine their payoff in case of "breakdown". Breakdown occurs with some probability if the first proposal fails and with certainty if the second proposal fails. We characterize Bayesian Equilibria in Sequentially Weakly Undominated Strategies. Our central result is that responders have a signaling incentive to vote "no" on the first proposal under unanimity rule, whereas no such incentive exists under majority rule. The reason is that being perceived as a "high breakdown value type" is advantageous under unanimity rule, but disadvantageous under majority rule. As a consequence, responders are "more expensive" under unanimity rule and disagreement is more likely. These results confirm intuitions that have been stated informally before and in addition yield deeper insights into the underlying incentives and what they imply for optimal behavior in bargaining with private information.
date: 2021-12
id_scheme: DOI
id_number: 10.11588/heidok.00031117
schriftenreihe_cluster_id: sr-3
schriftenreihe_order: 0708
ppn_swb: 1786339536
own_urn: urn:nbn:de:bsz:16-heidok-311177
language: eng
bibsort: PIAZOLODAVLEGISLATIV202112
full_text_status: public
series: Discussion Paper Series / University of Heidelberg, Department of Economics
volume: 0708
place_of_pub: Heidelberg
pages: 33
citation:   Piazolo, David ; Vanberg, Christoph  (2021) Legislative bargaining with private information: A comparison of majority and unanimity rule.  [Working paper]     
document_url: https://archiv.ub.uni-heidelberg.de/volltextserver/31117/7/Piazolo%26Vanberg_2021_dp708.pdf