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Games 2015, 6(2), 39-56; doi:10.3390/g6020039

A Model of Protocoalition Bargaining with Breakdown Probability

School of Economics, University of Nottingham, University Park, NG7 2RD Nottingham, UK
Academic Editors: Jon X. Eguia and Gergely Ujhelyi
Received: 1 January 2015 / Revised: 16 March 2015 / Accepted: 23 March 2015 / Published: 22 April 2015
(This article belongs to the Special Issue Political Economy and Game Theory)
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Abstract

This paper analyses a model of legislative bargaining in which parties form tentative coalitions (protocoalitions) before deciding on the allocation of a resource. Protocoalitions may fail to reach an agreement, in which case they may be dissolved (breakdown) and a new protocoalition may form. We show that agreement is immediate in equilibrium, and the proposer advantage disappears as the breakdown probability goes to zero. We then turn to the special case of apex games and explore the consequences of varying the probabilities that govern the selection of formateurs and proposers. Letting the breakdown probability go to zero, most of the probabilities considered lead to the same ex post pay-off division. Ex ante expected pay-offs may follow a counterintuitive pattern: as the bargaining power of weak players within a protocoalition increases, the weak players may expect a lower pay-off ex ante. View Full-Text
Keywords: coalition formation; legislative bargaining; apex games coalition formation; legislative bargaining; apex games
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. (CC BY 4.0).

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Montero, M. A Model of Protocoalition Bargaining with Breakdown Probability. Games 2015, 6, 39-56.

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