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Commitment timing in coalitional bargaining

Published online by Cambridge University Press:  14 March 2025

Aaron Kamm  and
Simon Siegenthaler Open the ORCID record for Simon Siegenthaler [Opens in a new window]
Aaron Kamm*
Affiliation:
Faculty of Business and Economics, University of Melbourne, 3010 Carlton, VIC, Australia
Simon Siegenthaler*
Affiliation:
Naveen Jindal School of Management, University of Texas at Dallas, 75080 Richardson, TX, USA
*
[email protected]
[email protected]
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Abstract

Most multilateral bargaining models predict bargaining power to emanate from pivotality—a party’s ability to form different majority coalitions. However, this prediction contrasts with the empirical observation that negotiations in parliamentary democracies typically result in payoffs proportional to parties’ vote shares. Proportionate profits suggest equality rather than pivotality drives results. We design an experiment to study when bargaining outcomes reflect pivotality versus proportionality. We find that commitment timing is a crucial institutional factor moderating bargaining power. Payoffs are close to proportional if bargainers can commit to majority coalitions before committing to how to share the pie, but pivotality dictates outcomes otherwise. Our results help explain Gamson’s Law, a long-standing puzzle in the legislative bargaining literature.

Keywords

ExperimentBargaining powerCoalition formationCommitmentGamson’s LawEquality

JEL classification

C78: Bargaining Theory • Matching Theory C71: Cooperative Games D70: General C92: Laboratory, Group Behavior
Type
Original Paper
Information
Experimental Economics , Volume 27 , Issue 1: Special Issue in Honor of John H. Kagel , March 2024 , pp. 130 - 154
Copyright
Copyright © The Author(s), under exclusive licence to Economic Science Association 2023

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