Bargaining in Legislatures

TLDR

Bargaining in legislatures follows formal rules that specify who may propose and how decisions are made, and outcomes depend on these rules and the legislature’s structure, yet social choice theory does not endogenize agenda formation or account for institutional structures. The study develops a theory in which legislators act noncooperatively to serve their districts while considering the sequential nature of proposal making and voting. The model explicitly incorporates legislators’ strategies in response to the sequential proposal and voting process. The model characterizes a legislative equilibrium that reflects institutional structure and enables analysis of structural choices where standard social choice theory fails to yield an equilibrium.

Abstract

Bargaining in legislatures is conducted according to formal rules specifying who may make proposals and how they will be decided. Legislative outcomes depend on those rules and on the structure of the legislature. Although the social choice literature provides theories about voting equilibria, it does not endogenize the formation of the agenda on which the voting is based and rarely takes into account the institutional structure found in legislatures. In our theory members of the legislature act noncooperatively in choosing strategies to serve their own districts, explicitly taking into account the strategies members adopt in response to the sequential nature of proposal making and voting. The model permits the characterization of a legislative equilibrium reflecting the structure of the legislature and also allows consideration of the choice of elements of that structure in a context in which the standard, institution-free model of social choice theory yields no equilibrium.