Rhetoric in Legislative Bargaining with Asymmetric Information

Posted: 8 Jun 2011

See all articles by Ying Chen

Ying Chen

Johns Hopkins University - Department of Economics

Hulya Eraslan

Rice University

Date Written: June 8, 2011

Abstract

We analyze a three-player legislative bargaining game in which legislators privately informed about their preferences bargain over an ideological and a distributive decision. Communication takes place before a proposal is offered and majority rule voting determines the outcome. When ideological intensities are private information but ideological positions are publicly known, it is not possible for all legislators to communicate informatively. Furthermore, the legislator who is ideologically more distant from the proposer may not communicate informatively, but the closer legislator can communicate whether he would "compromise" or "fight" on ideology. If instead ideological positions are private information, then all legislators may convey whether they will "cooperate," "compromise," or "fight" on ideology. When the uncertainty is about ideological intensity, the proposer is always better o making proposals for the two dimensions together despite separable preferences, but when the uncertainty is about ideological positions, bundling can result in informational loss which hurts the proposer.

Keywords: legislative bargaining, multilateral bargaining, multi-issue bargaining, cheap talk, communication

JEL Classification: C78, D72, D82, D83

Suggested Citation

Chen, Ying and Eraslan, Hulya, Rhetoric in Legislative Bargaining with Asymmetric Information (June 8, 2011). Available at SSRN: https://ssrn.com/abstract=1860088

Ying Chen

Johns Hopkins University - Department of Economics ( email )

3400 Charles Street
Baltimore, MD 21218-2685
United States

Hulya Eraslan (Contact Author)

Rice University ( email )

Department of Economics MS-22
Rice University P.O Box 1892
Houston, TX Texas 77251-1892
United States
7133483453 (Phone)

HOME PAGE: http://he6.web.rice.edu/

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