Communication in Collective Bargaining
66 Pages Posted: 21 Mar 2014 Last revised: 13 Apr 2020
Date Written: March 26, 2020
We analyze how institutions shape communication incentives in a Romer-Rosenthal agenda-setting model with private information and private values. A setter faces multiple voters, who are privately informed about their ideal points in one-dimensional policy space. We consider two institutions. In one setting, cheap-talk communication precedes a take-it-or-leave-it agenda-setting game. The second involves sequential agenda setting in which the setter can revise the proposal only when the first one fails to gain enough support. The latter institution requires the setter to commit to a policy as a screening technology. The commitment fosters information disclosure from strategic voters and thus results in efficiency gains over straw polls, where the setter is not constrained in how she reacts to revealed information. In addition, we also identify voters' possible sabotage as a source to discount the informativeness of political communication. Under simple majority rule, no voter has absolute veto power against undesired policies. Therefore, a voter who dislikes reform could have an incentive to induce an extreme reform proposal and can benefit from its failure. Under unanimity rule, however, any voter can directly block less preferred policies, and thus has little incentive to fool the setter in the deliberation.
Keywords: agenda setting, cheap talk, political communication, commitment
JEL Classification: D72, D83
Suggested Citation: Suggested Citation