title: Legislative bargaining with private information: A comparison of majority and unanimity rule
creator: Piazolo, David
creator: Vanberg, Christoph
subject: ddc-330
subject: 330 Economics
description: 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. If the first period proposal fails, the game ends immediately with an exogenously given “breakdown” probability. Two responders have privately known disagreement payoffs. We characterize Bayesian equilibria in stagewise 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: 2024-07
type: Working paper
type: info:eu-repo/semantics/workingPaper
type: NonPeerReviewed
format: application/pdf
identifier: https://archiv.ub.uni-heidelberg.de/volltextserverhttps://archiv.ub.uni-heidelberg.de/volltextserver/35195/13/Piazolo_Vanberg_2024_dp753.pdf
identifier: DOI:10.11588/heidok.00035195
identifier: urn:nbn:de:bsz:16-heidok-351956
identifier:   Piazolo, David ; Vanberg, Christoph  (2024) Legislative bargaining with private information: A comparison of majority and unanimity rule.  [Working paper]     
relation: https://archiv.ub.uni-heidelberg.de/volltextserver/35195/
rights: info:eu-repo/semantics/openAccess
rights: http://archiv.ub.uni-heidelberg.de/volltextserver/help/license_urhg.html
language: eng