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Predictability and Power in Legislative Bargaining

S Nageeb Ali, B Douglas Bernheim, Xiaochen Fan

The Review of Economic Studies · 2019 · Volume 86 · Issue 2

DOI: 10.1093/restud/rdy013

Abstract

The rules and procedures of legislatures often provide legislators with information bearing on the identities of upcoming proposers. For a broad class of legislative bargaining games, we establish that Markovian equilibria necessarily deliver all economic surplus to the first proposer whenever the information structure permits the legislators to rule out some minimum number of proposers one round in advance. This result holds regardless of the recognition process and even if players vary in patience and risk aversion. It raises the possibility that procedures adopted in the interest of transparency may contribute to the imbalance of political power.

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