Communication in Collective Bargaining

66 Pages Posted: 21 Mar 2014 Last revised: 13 Apr 2020

See all articles by Jidong Chen

Jidong Chen

Tsinghua University - School of Public Policy and Management

Date Written: March 26, 2020

Abstract

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

Chen, Jidong, Communication in Collective Bargaining (March 26, 2020). Available at SSRN: https://ssrn.com/abstract=2411761 or http://dx.doi.org/10.2139/ssrn.2411761

Jidong Chen (Contact Author)

Tsinghua University - School of Public Policy and Management ( email )

Beijing, 100084
China

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